Money Guru | It’s become cheaper to go to Europe

Money Guru | It’s become cheaper to go to Europe

What impact has the global crisis had on Indian travellers?

We didn’t see a slowdown in our outbound holidays, but we didn’t see a spurt in growth that we were anticipating. So if I were to look at 2009 and 2010 summers, we have seen a growth across three years. But the growth that we actually should have seen last year cascaded somewhere in 2009-10. So 2010 has been a very good year.

The European crisis is upon us. Is Europe becoming more affordable for Indians?

Europe has definitely become a cheaper destination as a result of the weakening of the euro. A year ago, the euro was around Rs74, today it is at around Rs56. It has enabled us to ensure that the prices of our products are down.

Has the number of travellers to the continent increased?

Yes, if you look at our summer bookings, we have seen growth in excess of 25%. We saw similar growth in 2007-08.

Spain and Portugal are said to be the nerve centres of the European crisis. Are they promoting tourism in any way?

Indians have historically gone to Greece in large numbers and it continues to be an attractive destination. Spain and Portugal are recent discoveries when it comes to the Indian market. India is now being recognized as a major market by all tourism boards. Spain has been advertising in this market for a while, the Portugal and Greece have not.

Have the rates of the packages to these destinations gone down? By how much? Have you introduced any offers, discounts to cash in on the crisis?

This season (2010) we have already introduced budget holidays. So, we are unlikely to add anything else. However, we have thrown in add-ons, such as complementary two nights and three days at Spain or Portugal. No doubt we have been able to offer this because hotel rates have come down.

We have seen a substantial reduction in cost and that may have been driven by the fact the the euro has weakened. But to put a finger on it now is too early because the actual crash happened only a few months ago and the effects are only beginning to work into our system now. We are renegotiating terms and redoing the costs and we are seeing a greater willingness on their part, something which we didn’t see last year.

In the coming season, it should be interesting to see what happens. This year, our season is almost over.

So would next year be good to travel abroad?

We will have to look at the tariffs and fares when we start building our packages for the coming season. Right now it is still too early to say. Oil prices are going up and this will increase airfares and I don’t know whether we will mange to cover up these prices with the depreciation.

So what components of the travel costs will now reduce?

If you are talking about hotels, coaches and shopping for local stuff, it will become cheaper and the euro zone being large what they import may not really be relevant to a tourist.

The only point where the tourists will detect the depreciation is the package cost and the shopping money available to him and these benefits will become more obvious in the coming season if airfare doesn’t play spoiler.

Madhavan Menon is managing director, Thomas Cook (india) Ltd

Harshada Karnik