With rupee plunging, where can you holiday this summer?

Bad news for those of you hoping to travel abroad either for leisure or higher studies: the cost of foreign travel has increased by at least 20 percent in recent weeks, according to a report in The Economic Times.

The rupee’s alarming depreciation against the US dollar (it tumbled past the 54 mark recently) and a pilots’ strike at Air India and Kingfisher Airlines are to blame for this painful hike in costs. With the spending budgets of most middle-class families thrown into disarray, most of them are now bypassing relatively expensive tours to Europe and America in favour of the cheaper Far East as well as local destinations, the report said.

A recent Business Line report confirmed that view, noting that travel agents from across India had reported a decline in demand and that there was a 30 percent drop in booking enquiries compared with last year.

So what are Indian travellers doing?

Well, as we said before, most of them are opting to either sample local tourist delights over international ones. In other words, Kashmir and Himachal Pradesh suddenly look a lot more appealing (and within budgets) to Indian travellers than London or Paris.

“This year, domestic travel has g one up by 25 percent to 35 percent, ” Neeraj Dev, head of outbound products, Yatra, told Times of India. An official from Globotel also confirmed that domestic travel has gone up by 30 percent, especially in hilly areas like Kashmir, Manali, Simla, and Himachal Pradesh.

Of course, note that the cost of local travel has also increased. The ongoing pilots’ strike at Air India and Kingfisher, lower flight capacity from Kingfisher, as well as higher airport charges in some key airports (Delhi, Mumbai, Chennai and Kolkata) have raised the price of air tickets by 25-30 percent across major metros and tourist destinations during high season.

If you’re still insistent about travelling abroad, the most popular options currently are Asian destinations like Malaysia, Thailand, Macau and Mauritius, according to travel agents.

Of course, as a holiday traveller, you have the option of changing your dates of travel to adjust to higher/lower prices. Not so for Indian students planning to study abroad. Most of them have no choice but to travel late August to join courses that begin in September.

For them, there’s no denying that costs will soar. “The average spend for a two-year MBA course in the US and Spain was around Rs 50 lakh till recently,” India Forex Advisors founder and CEO Abhishek Goenka told Business Today. “It has spiralled to Rs 80 lakh, with the rupee moving to the 54-level from 44 two years ago. The cost of a one-year MBA course in the UK has increased to Rs 40 lakh from Rs 25 lakh during the corresponding period.”

Sounds bad? Here’s the really bad news: the rupee’s slide shows no sign of halting.