Home / Money / Personal Finance /  Has pound’s plunge made UK holidays cheaper for Indians?

Are you planning a trip to the UK and wondering whether the crash in the country’s currency will make your holiday cheaper? It will, but only partly.

The British pound crashed to a historical low against the US dollar on Monday. As on 26 September, one Pound sterling (GBP) was valued at 87.84. Six months ago, the value of the rupee against GBP was around 100.61.

Depreciation in GBP will have limited benefit for your overall travel budget to the UK. Fluctuations in exchange rates don’t translate into savings on flight tickets as airlines follow a standard practice of denominating the ticket price in the currency of the origin country.

“Currency fluctuations do not have an impact on airfares as air tickets are priced in Indian rupees," said Indiver Rastogi, president & group head – global business travel – Thomas Cook (India) & SOTC.

Hotel and tour packages priced in GBP will see a decline in prices, but not those denominated in rupee. However, the savings will be marginal as the value of GBP has been falling consistently over the last 7-8 months.

 

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“Going by the recent rupee value against the pound, the fall in hotel prices will be 5-8%," said Ajay Awtaney, founder, LiveFromALounge.com.

Also, remember that you will pay forex markup of 2-3% for payments done in GBP.

Similarly, depreciation in the pound is beneficial to tourists who are already in the UK and will exchange their money in local currency for transportation, shopping and dining.

Visa constraint

Whether you should lock cheaper hotel fares or not now depends on your travel dates.

Currently, the process to get a UK visa takes about two months. So, booking a sweeter deal for November-December may not be a good idea if you are yet to apply for the visa.

“The visa challenges are a major deterrent to a shorter booking window right now," said Rajeev Kale, president & country head, Holidays, MICE, Visa - Thomas Cook (India).

If the visa approval takes longer or gets rejected, you will have to bear the cancellation charges on both airfares and hotel bookings.

“For travelling dates in January or February, one can commit to the fares now. It’s hard to anticipate how long the crash in the pound’s value will last, so booking a pre-paid hotel stay or a travel package denominated in the pound for travel dates after December can help save some money," said Awtaney.

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