A strong rupee has made international holidays cheaper by around 10 per cent. Enjoy it...
Summer holidays have become cheaper. Last year, a 17-day European tour was costing Rs 209,000. This year, the package is going for Rs 190,000, costing by 10 per cent less. Similarly, a 16-day US tour package costing Rs 242,000 is cheaper by 7.4 per cent.
In the past year, the rupee has been strengthening against major currencies such as the US dollar, the euro and the British pound. A year ago, the exchange rate for the dollar was Rs 49.67. At present, it is Rs 44.44, a rise of 10.52 per cent. Similarly, the rupee has appreciated 10.47 per cent against the Chinese renminbi, 10.67 per cent against the Hong Kong dollar, 8.43 per cent against the euro and 7.96 per cent against the pound.
The strengthening of the rupee against the dollar is a key reason. Many currencies, such as the Hong Kong dollar, the Saudi rial and the UAE dirham are pegged to the dollar. When the dollar depreciates, so do these currencies.
No wonder outbound travellers are looking at longer destinations. "Due to the strong rupee, we are seeing an increased interest in long-haul destinations like Europe and the US," said Anand Kandadai, vice-president, outbound tours, Makemytrip.com.
A typical long-haul destination is one in which the air-ticket cost is around 30 per cent of the total expenses. Examples of such destinations are the US, Europe, Australia and Mauritius. Kandadai said though there had been an increase in air fares by around 5 per cent compared to last year, as fuel prices had risen, a traveller could easily save an additional 10-12 per cent due to reduction in hotel and other costs.
The top five destinations: The destinations that have benefited the most from the currency appreciation are the US, Europe, Thailand, Singapore and Malaysia. "If one goes by the number of bookings at the start of the season, there has been an increase of 20 per cent for Europe," said Kandadai.
Most tour operators take a portion of the money in the rupee. The major chunk is pegged to the US dollar, the euro, the pound or the Australian dollar, though the payment is in rupees. Take the example of an African package called African Grandeur. The 15-day tour is for Rs 79,000 and $2,650 (Rs 117,766 at an exchange rate of $1=Rs 44.44). This helps operators deal with currency fluctuations.
While exchange rates are one big factor, a person also needs to consider what the rupee can buy in the destination he is visiting. If the dollar has weakened against the rupee but inflation is high in the US, exchange rate gains will be wiped out.
Other destinations: That's not all. Saurabh Jaiswal, a Nagpur-based businessman who travels frequently to Europe for work, is planning to take his family to Greece during the summer vacation. "During my recent visit, I discovered that hotel rooms are available at huge discounts. In addition, the rise of the rupee against the euro saves me quite a sum," Jaiswal said.
With traditional tourists from the US or Europe cutting down on international travel due to the economic crisis of 2008 and 2009, many destinations such as Singapore and Malaysia have become cheaper this year. A seven-day package to Singapore and Malaysia is 20 per cent less this year as compared to last year.
Travel advice: If a foreign destination is on your mind, travel advisors say you should rush to do the booking. "The exchange rate benefit is available for visitors booking their travel at least a month in advance. Else, air fare and last-minute hotel bookings can nullify the gains," said Veena Patil, managing director, Kesari Tours.
SOURCE: Business Standard
By Tinesh Bhasin
Date - April 16, 2010
Location - Mumbai
Thursday, April 15, 2010
Monday, April 12, 2010
Going on a summer holiday?
Travel loans are easily available, affordable to help you and your family unwind.
Summer vacations are fast approaching and tour operators are leaving no stones unturned to advertise attractive tour packages for various domestic and foreign destinations. There are tour packages for every pocket. Many must have already planned their vacation. But if you are not taking a break due to budget constraints, here's how you can quickly plan a vacation -
Remember, when planning a vacation, do not do away with funds saved for meeting unforeseen expenses.
Work out your budget, first and then evaluate how much extra funds you have to help sponsoring the holiday. If you cannot spare enough from the savings and you still owe a holiday to your kids, a travel loan can rescue you.
Typically, a travel loan is nothing but a personal loan. But with increased awareness and marketing by the travel sector, many banks now a days, offer special travel loans. Some of these special schemes are - State Bank of India's Easy Travel Loan, Bank of India's Star Holiday Loan Scheme and Bank of Baroda's Desh Videsh Yatra Loan.
Travel loans promoted by banks are a good way of meeting all your travelling expense like ticket cost, lodging, visa, various taxes and many more.
While the loan amount may vary according to your income and repayment capacity, banks mostly offer a minimum of Rs 20,000 to as high as Rs 10 lakh as loan amount.
Travel loans are supposed to be repaid over a span of four years and can be easily obtained. Repayment policy for this loan varies from banks-to-banks in terms of the rate of interest levied on the loan availed. On an average the rate of interest is around 14-16 per cent.
When you apply for a travel loan, you are required to submit a copy of your passport for travelling overseas, rail/bus/air tickets, visas, residence proof, consolidated invoice of ticket, insurance costs and passport size photograph. Some banks may ask for some additional documents, but that is bank specific.
Salaried individuals need to submit a copy of the latest salary slip and Form 16. Self-employed individuals and working professionals will be required to submit a copy of Income Tax returns for last two financial years and a residence proof.
You need to fill an application form available with banks. A nominal processing fee is charged by banks, which may sometimes be waived off.
Banks offer some other benefits with travel loans like low processing charges, no administrative charges and security. And, minimal documentation and no prepayment penalties is what all customers look for.
Another option is to obtain a loan of maximum Rs 5 lakh only in case long-term saving instruments like National Savings Certificate (NSC), Indira Vikas Patra (IVP), Kisan Vikas Patra (KVP), policy from Life Insurance Corporation (Surrender Value), are provided as collateral security equal to at least 50 per cent of the sanctioned loan amount. Loan worth Rs 10 lakh is also sanctioned by submitting the same collateral security but the collateral amount should be equal to 100 per cent of the loan amount.
As personal loans are unsecured loans, the rate of interest levied is higher. But, if you are mortgaging long-term saving instruments, you can get a better rate of interest.
So, no matter which profession you belong to, whether you are salaried, working professional, self-employed, high net worth individual, agriculturist or pensioner, you are eligible for travel loans.
In short, travel loan is a financially smart decision as it will not only improve your credit score with good payment history but will also help you take a break from work by allowing a monthly payment of the expense you incurred on the long cherished vacation.
SOURCE: Business Standard
By Bienu Vaghela
Summer vacations are fast approaching and tour operators are leaving no stones unturned to advertise attractive tour packages for various domestic and foreign destinations. There are tour packages for every pocket. Many must have already planned their vacation. But if you are not taking a break due to budget constraints, here's how you can quickly plan a vacation -
Remember, when planning a vacation, do not do away with funds saved for meeting unforeseen expenses.
Work out your budget, first and then evaluate how much extra funds you have to help sponsoring the holiday. If you cannot spare enough from the savings and you still owe a holiday to your kids, a travel loan can rescue you.
Typically, a travel loan is nothing but a personal loan. But with increased awareness and marketing by the travel sector, many banks now a days, offer special travel loans. Some of these special schemes are - State Bank of India's Easy Travel Loan, Bank of India's Star Holiday Loan Scheme and Bank of Baroda's Desh Videsh Yatra Loan.
Travel loans promoted by banks are a good way of meeting all your travelling expense like ticket cost, lodging, visa, various taxes and many more.
While the loan amount may vary according to your income and repayment capacity, banks mostly offer a minimum of Rs 20,000 to as high as Rs 10 lakh as loan amount.
Travel loans are supposed to be repaid over a span of four years and can be easily obtained. Repayment policy for this loan varies from banks-to-banks in terms of the rate of interest levied on the loan availed. On an average the rate of interest is around 14-16 per cent.
When you apply for a travel loan, you are required to submit a copy of your passport for travelling overseas, rail/bus/air tickets, visas, residence proof, consolidated invoice of ticket, insurance costs and passport size photograph. Some banks may ask for some additional documents, but that is bank specific.
Salaried individuals need to submit a copy of the latest salary slip and Form 16. Self-employed individuals and working professionals will be required to submit a copy of Income Tax returns for last two financial years and a residence proof.
You need to fill an application form available with banks. A nominal processing fee is charged by banks, which may sometimes be waived off.
Banks offer some other benefits with travel loans like low processing charges, no administrative charges and security. And, minimal documentation and no prepayment penalties is what all customers look for.
Another option is to obtain a loan of maximum Rs 5 lakh only in case long-term saving instruments like National Savings Certificate (NSC), Indira Vikas Patra (IVP), Kisan Vikas Patra (KVP), policy from Life Insurance Corporation (Surrender Value), are provided as collateral security equal to at least 50 per cent of the sanctioned loan amount. Loan worth Rs 10 lakh is also sanctioned by submitting the same collateral security but the collateral amount should be equal to 100 per cent of the loan amount.
As personal loans are unsecured loans, the rate of interest levied is higher. But, if you are mortgaging long-term saving instruments, you can get a better rate of interest.
So, no matter which profession you belong to, whether you are salaried, working professional, self-employed, high net worth individual, agriculturist or pensioner, you are eligible for travel loans.
In short, travel loan is a financially smart decision as it will not only improve your credit score with good payment history but will also help you take a break from work by allowing a monthly payment of the expense you incurred on the long cherished vacation.
SOURCE: Business Standard
By Bienu Vaghela
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