INDIAN travel firms have fallen out of love with Western Europe, with unfavourable currency exchange rates, new taxes and airfare hikes making this once sought-after destination increasingly untenable.
Kunal Sawhny, vice president – business development, Blue Moon Travels has seen the volume of Indian clients headed to Western Europe plunge by 30 per cent in the past 12 months.
He said: “More and more companies are watching the pennies since the softening of the rupee in the last year. Some are looking to alternative, less expensive destinations in Eastern Europe, such as the Czech Republic, which offers corporate clients something different, while others choose not to hold MICE programmes in Europe altogether. They decide to host an event domestically or in regional destinations such as Thailand and Singapore, which are relatively less expensive.”
New service taxes introduced on July 1, which impose an additional 4.994 per cent administration fee whenever an airline reservation or change to an airline booking is made, have also served to curb demand among Indian firms for Western Europe, particularly for incentive programmes.
Classis Travel & Tour’s director, Rajendra Dhumma, said: “With airfares to Western Europe costing around US$1,000 to US$1,200 at one go, these extra taxes can really pile up, making companies think twice about holding an event in Western Europe."
Meanwhile, airfares in India have been creeping upwards, driven by escalating fuel costs. Based on national news reports, airfares in India have risen by 30 to 40 per cent in the last six months. “These airfare hikes have hurt our India to Western Europe business, which dropped by 10 per cent in the last year,” said Dhumma.
As these debilitating factors continue to take their toll, India to Western Europe MICE traffic is anticipated to fall further in the coming months.
“Looking at the faltering Indian and global economy, we can assume that traffic from India to Western Europe will see little chance of an uplift in 2013. However, the situation might change if airfares dropped and currency exchange rates improved,” said Mitesh Dani, director, Parul Tours & Travel.