India Insight

Pricey dollar puts South Africa, Australia on Indian tourists’ maps

August 29, 2013

When Aparupa Ganguly visited South Africa in 2007, the country’s topography and wildlife made such an impression on the communications professional that she couldn’t wait to come back. Ganguly got her wish six years later – thanks to a stable rand.

Foreign-bound Indian travellers such as Ganguly are realizing that holidaying in countries such as South Africa and Australia offers value for money as their currencies have been largely stable in recent weeks and haven’t appreciated as much against the rupee, when compared to the dollar or the euro.

Data shows the South African rand and the Australian dollar have gained around 10 percent since May, compared to a near 30 percent surge in the U.S. dollar which hit a record high above 68 per rupee on Wednesday.

Ganguly, who accompanied her husband on a business trip to South Africa this month, bought the rand at about 6.2 per rupee and travelled across the Garden Route, a scenic tourist area on the country’s south-eastern coast.

“If the rand would have really gone up, I wouldn’t have accompanied him,” said the 35-year-old  who spent around 230,000 rupees ($3,380) on her trip this month.

“When you travel to the U.S. or UK, you are continuously converting (to rupees) as an Indian, so that problem is set free once you reach (South Africa).”

Rising concerns about India’s current account deficit and a slowing economy, coupled with better prospects for the United States as it plans to roll back its stimulus have pushed the dollar to all-time highs, making it tougher for Indians to take foreign trips.

Some have cut vacation costs by reducing the number of travel days or by considering cheaper destinations such as Thailand in Southeast Asia. Many have cancelled foreign travel plans altogether, settling for holiday destinations within India.

But airlines and travel agencies are trying to make the most of relatively stable currencies such as the rand or the Australian dollar to woo travellers planning for the winter break.

South African Airways is planning to announce offers such as special companion fares for business class, the airline’s country manager Sajid Khan told India Insight.

The airline, which operates seven flights out of India each week, has seen a 15-20 percent annual increase in passenger traffic between May and August, mainly because of the currency factor.

“Anything that is a silver lining is always capitalised on … I would like to attract the passengers who were thinking of Europe or USA or Dubai to come and visit South Africa,” Khan said.

Visa application statistics provided by the South African High Commission showed that 12,935 visas have been issued from New Delhi since May, nearly 30 percent more than last year. In August, over 3,200 visas have already been issued.

Australia has also seen a recent spurt in the number of travellers from India. Data from Tourism Australia showed more than 14,000 people visited the country famous for its kangaroos and the Great Barrier Reef in June, a 20 percent increase over the previous year. Visa applications were up 12 percent in the first six months of 2013.

Apart from the rand and Australian dollar, other currencies have also shown similar trends versus the rupee. The Turkish lira is up 11 percent; the New Zealand dollar 16 percent while the Fijian dollar has gained 19 percent in the last four months, but still not as much as the American dollar.

Turkey and Fiji are also doing quite well for us as they are anyhow quite popular with honeymoon couples and the steady currency is helping spur demand,” said Pawan Chandra, marketing head of leisure travel company TUI India.

Having seen an increase in holiday queries for countries with favourable exchange rates, travel portals and agencies such as Thomas Cook, MakeMyTrip and Yatra said they are coming up with new travel packages.

Thomas Cook is offering a free five-day trip to New Zealand along with their nine-day Australia package for 232,800 rupees while MakeMyTrip is planning to introduce new group packages for South Africa.

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