How Indian overseas-bound travellers are managing rising summer vacation costs, forex outgo

The rupee depreciation against USD and other major currencies earlier affected several outbound travellers' summer vacation plans. For instance, Sneha Jaggar, a 37-year-old financial advisor from Bengaluru, was keen on a three-week trip to Europe in May with her family of four. However, the rupee fluctuation — in the range of Rs 91–95 against the euro — when she was planning the trip in March, forced her to reconsider vacation plans. “My trip cost shot up by 20 percent purely on account of rupee volatility back then,” she says.

Therefore, she opted for a more budget-friendly destination, Bali, in June. “By reducing this year's travel costs, we will be able to allocate more funds for our next year's trip to Europe, with a larger budget,” she adds. But, like Jaggar and Shukla, several travellers cancelled, postponed, or opted to travel to Southeast Asian countries.

How rupee movements hit international tour packages

"The rupee volatility along with rising air fares and accommodation costs pushed up prices for international tour packages. The costs are estimated to have gone up by 10-15 percent this summer,” says Sangram Ghorpade, CEO of Joy N Crew, a group tour operator.

“Historically, past rupee depreciations (such as in 2013 and 2018) led to temporary hesitation, but travellers adapted by modifying budgets,” says Karan Agarwal, Director at Cox and Kings. This year while some travellers have continued with their planned itineraries to the US and Europe, there is a huge demand for bookings to Southeast Asia and the Middle East, he adds.

Smart currency management to save on costs

Pranav Date, 33, founder of a Mumbai-based fintech firm, embarked on a 25-day multi-country trip with his wife in December 2024. The rupee’s slide against the USD accelerated while he was travelling.

“We mitigated the impact of rupee depreciation by loading US dollars onto our forex card beforehand and carried some US foreign currency before travelling, effectively locking in the exchange rate,” Date says. “Additionally, we used a premium credit card that offered travel-related perks and reward points on foreign transactions, which further helped minimise the effect of the rupee's decline.”

Given the impact of currency movements on travel budgets, international travellers should plan their foreign currency requirement wisely. “The Reserve Bank of India allows forex purchases up to 60 days before travel, so locking in a good rate early can help avoid any future depreciation,” says Sudarshan Motwani, Founder and CEO, BookMyForex.com.

Forex cards to lock in rates

According to Rajiv Mehra, President of IATO, dollar-denominated forex cards are an effective hedge for managing forex needs, as they can save on exchange charges and protect against currency depreciation.

“These prepaid cards lock in exchange rates at the time of loading, ensuring spending remains stable even if the rupee depreciates,” says Motwani. Forex cards also eliminate foreign transaction fees and dynamic currency conversion (DCC) charges, making them a cost-effective alternative to rupee-denominated credit or debit cards, which fluctuate with rupee rates. Traditional money changers and banks charge high mark-ups (2 to 8 percent), so opting for zero-markup forex services is an appropriate choice.

Maximise benefits via loyalty programs, credit cards, and forex deals

Travellers can save money by leveraging airmiles, loyalty programs and discounts.  “Redeeming accumulated airline miles for flights or upgrades can reduce costs. Use of forex cards and offers while purchasing forex can be beneficial,” says Pavan Kavad, Managing Director of Prithvi Exchange (India) Ltd. Travel-oriented credit cards offering points or miles on foreign transactions can also provide rewards.

Additionally, keeping an eye out for forex deals, such as promo codes from foreign exchange firms during the peak holiday season, can help minimise expenses. By taking advantage of these opportunities, travellers can make their foreign trips affordable despite volatility in the rupee.

Also read | How to keep your credit card spending in check and maximise rewards this holiday season

Trim costs with advance booking and group travel

Jaggar had initially planned to book her Europe flights and accommodations in December 2024 for a trip in May, but she delayed the booking to March 2025, expecting prices to remain stable. However, the rupee's depreciation disrupted her family vacation.

“Booking flights and hotels in advance can help reduce travel costs. By doing so, you can negotiate better hotel tariffs and secure cheaper flights,” says Kavad. Additionally, travelling in groups can be cost-effective, as it allows for shared transportation costs and can often lead to discounts on accommodation and other travel-related services.

Also read | Not planned your summer holiday yet? 5 hacks to bring your last-minute travel costs down

If you are flexible with your destination, you can look for destinations where the exchange rate is favourable. “Places where the rupee has a stronger value, such as certain Southeast Asian countries, offer more value for money, allowing travellers affordable accommodations, food, and adventure activities,” says Kavad.