The rupee hit a record low of 90.7 against the dollar on Monday. Six months ago, it was around 86.5, and a year ago about 85. In just 12 months, the currency has depreciated roughly 6.25% against the dollar.
The impact, however, is far from uniform. While some markets are seeing sharper price increases, others remain relatively insulated due to local-currency pricing and strong domestic tourism demand.
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Packages cushion pain
Airfares and hotel tariffs in most countries are dollar- or euro-linked, making currency movements a direct cost factor for Indian travellers. The effect varies sharply between those booking packaged holidays and do-it-yourself (DIY) travellers.
For holiday packages, the impact is cushioned as travel companies contract inventory 6–12 months in advance at fixed rates. “These are negotiated rates for bulk inventories, which cushions travellers from sudden currency swings,” said Karan Agarwal, director, Cox & Kings, a tour operator brand.
As a result, existing season-long packages are unlikely to be repriced overnight, though new bookings will reflect higher costs.
Moreover, the increase in costs will also not be sudden or steep, largely because the rupee has been weakening gradually over the past year. According to Manjari Singhal, chief growth and business officer at Cleartrip, most international trips are booked two to three months in advance, which allows travellers to secure their rates before fresh currency movements start reflecting in prices.
Advance contracting benefits both large and small travel companies, though not equally. “Large operators absorb a part of the forex movement to keep packages competitive,” Agarwal said. Smaller agencies, operating on thinner margins, have far less room to do so.
Agarwal explains how this works: “When we contract inventory 6–12 months in advance, we lock rates with our global partners, but no travel agency can lock the currency exchange rate for an entire year. So if the rupee moves from 85 to 89, the industry typically manages this difference through a mix of hedging, forward bookings, and optimization of margins at our end and a calibrated portion is passed on to new bookings, so the impact on the traveller remains marginal rather than abrupt.”
Large travel companies can do this through scale-based sourcing, giving them better buffer mechanisms. But, for smaller companies, the impact is greater.
Amar Kedia, founder of TravelBluez, a boutique travel agency catering to premium travellers, says forex movements alone have pushed up costs by 8–15% over the last year. “The impact on USD-denominated markets is about 7–8%. As a travel advisor, it is now difficult to hold bookings without payment because of the risk of sudden and sharp currency depreciation.”
Are DIY travellers better off?
Travellers booking flights and hotels directly through online travel aggregators (OTAs) are not spared, even though prices are displayed in rupees.
“OTAs display fares in INR, but backend settlements for airlines and many international hotels are still done in foreign currency,” Agarwal said. Currency movements, therefore, eventually make their way into final prices.
Airlines feel this pressure more sharply because many of their operating costs, such as fuel, aircraft leasing, maintenance and navigation fees, are dollar-linked. As these inputs become costlier, fare buckets are revised. The extent of this revision varies by route, explained Abhishek Daga, founder of Thrillophilia, a tour package company.
“For short-haul routes in Asia, the pass-through is small, around 0–3%. But for long-haul routes to the US, Europe or Australia, it can be 5–8% over a quarter when the rupee weakens sharply. The OTA price may look stable in INR, but the backend fare construction reflects dollar-linked costs.”
Hotel bookings show an even more varied pattern depending on the currency in which the property contracts are issued. In destinations like Vietnam, Thailand, Indonesia and Singapore, most hotel contracts are in local currencies, so OTAs pass on only minor adjustments. “But in markets like the Maldives, Europe, the UAE and across global premium chains, contracts are USD-based. In those cases, OTAs typically revise INR rate bands every 30–60 days to account for currency movement,” Daga said.
Tourists who make their bookings directly, instead of buying packages through travel companies, are likely to feel the currency fluctuations heat more. This is mainly because individual bookings are more prone to real-time pricing, while travel companies benefit from advance contracting.
“For cross-border hotel inventory on OTAs, dynamic pricing picks up currency changes faster. Similarly, airlines reprice fares over time due to rise in input costs. But, in both cases, the impact is moderate and spaced out, not overnight,” said Agarwal.
Where it hurts more
The story doesn’t end with the dollar. Indian travellers are also feeling the impact of the rupee’s sharper fall against other major currencies. According to Kedia, the biggest pain points this year are markets where the rupee has weakened more steeply–the euro, pound, Swiss franc, and Thai baht.
“Because of higher depreciation against these currencies, roughly 12–16%, travel to the EU, the UK and even parts of Southeast Asia has become more expensive,” he said. The euro now trades around ₹106, up from about ₹88.7 a year ago.
While travel costs are rising across most destinations, the impact is uneven. In Europe, USD-linked components such as aviation fuel, combined with euro-denominated hotel contracts, create a double blow for Indian travellers. In the Maldives, where luxury resorts are almost entirely USD-pegged, costs are expected to rise 5–8% even before factoring in peak-season demand, according to Daga.
Turkey stands out as an exception. Despite the lira’s (Turkey’s currency) sharp fall, many hotels and suppliers price in euros to protect revenues, limiting any benefit Indian travellers might have expected from a weaker local currency.
Relative safe zones
On the other hand are destinations where dollar dependence is lower. Parts of Southeast Asia, Sri Lanka, Malaysia, and Singapore continue to offer relative stability. Daga notes that countries like Vietnam and Thailand have strong domestic tourism markets, which act as a buffer.
“Hotels and experiences there are priced mainly for local demand, so rate cards reset in local currencies rather than in USD,” he said.
That said, the rupee has also weakened against many of these local currencies, which means travel costs will still rise for Indian travellers, though the impact is likely to be milder than in dollar-heavy markets.
“Shopping, dining, local transport, and experiences abroad become slightly more expensive when converted at the destination, since those spendings are always at the live FX rate,” said Agarwal.
“Indian travellers are perhaps safe in countries where the local currency has fallen more than the rupee, but there are very few such cases, perhaps only Nepal. Even Turkey has been insulated because they price in EUR,” Kedia said.
A weaker rupee doesn’t mean cancelling foreign holidays, but planning smarter. Booking flights early (3-4 months), locking in package rates and choosing destinations with lower dollar dependence can help contain costs. For those booking directly, keeping travel plans flexible and being mindful of on-ground spending will matter more than ever.
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