The rupee fell past 64 to the US dollar for the first time on Tuesday. Amid this economic turmoil, the Indian tourism industry is expecting a striking profit from the US travelers and other international tourists. Solo trips, shorter travel plans, low hotel prices, cheap destination prospects add to the depreciating rupee as some of the major reasons that make India a favorable tourist destination for US travelers. The rupee slumped as much as 1.6 percent to an all-time low 64.13 to the dollar, but recovered most of its losses to close at 63.25/26.
The speculation that all industries are suffering from this huge depreciation in dollar is not completely true. The Indian tourism is expecting a huge turn over in this economic recession. Industries as broad as hospitality to retail all benefit from international tourism, and the low visitor numbers can’t have helped broader business confidence. But in recent months, since the dollar started to register record highs, it seems it is having a positive effect on the Indian tourism trends.
Economic theory reveals that an appreciation of the dollar will impose transitional costs on the American economy – lowering exports, raising imports, and negatively affecting the global tourism index as a whole. Experts generally predict that the strong American dollar will restrict economic growth both this year as well as in 2014. Experts predicts that the US dollar in comparison to the Indian rupee may touch the 70 mark in a month or two.
However, industry players like Thomas Cook, MakeMyTrip, Gokyo Treks & Expedition said that the declining rupee has in a way affected in a change in the preference of holiday locations. Customers of the company are also going to new emerging and viable options to manipulate the appreciation of dollar in this time span.
Cheap Hotels enhance tourism trends
More than a third of hotel rooms remain unoccupied, with the industry reporting an occupancy level of 60% this year. In the last four to six months alone, occupancy levels at hotels in the metros have dropped by a tenth. To mitigate this growing crisis, hotels have had to reduce room rates by 15%, squeezing margins like never before, even as they continue to bleed at their restaurants and conference facilities.
According to a recent report by the Federation of Hotel and Restaurant Associations of India, hotel occupancies in 2012-13 dropped to the lowest in a decade at 58.3% and average room rates slumped to Rs 6,214, the lowest in six years, smelling trouble for the hotel industry.
To sum up, the depreciating rupee and the drop in the hotel prices have certainly improved the inbound travel trends of the Indian tourism industry. The Indian subcontinent has re-emerged as a feasible option for the foreign tourists. The trend that the tour operators in India are exploiting smartly with their attractively priced domestic portfolio – Kashmir, Kerala, Andaman and Nicobar Islands, Goa, Rajasthan and more.
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