Plan a budget holiday overseas

Vacations are always attractive. The only drawback is the expense involved. Snehal Prakash, a software professional, says she loves vacations. But she can't decide whether or not to go on a vacation this winter, as several big expenses are coming her way. With two weeks left for December, she says she would have to "sell her kidneys" to be able to afford a vacation abroad next month.

"It's unlikely I could take an economical break," she says.

It is better to take winter breaks in early December, as the end of the month accounts for Christmas and New Year and, therefore, prices are high.

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Though Prakash is late in getting a good deal, this may not be the case for all. Here are a few handy tips: Early holiday bookings ensure one gets the best price and a hotel of one's choice. Most tour agents and hoteliers throw in complimentary breakfasts and transfers for early birds. Ensure you ask for such value add-ons.

"To get reasonable airfares and hotel packages, book at least 20 days in advance," says Karan Anand, head (relationships), Cox & Kings. Bulk bookings also help cut costs.

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Madhav Pai, director (leisure travel, outbound), Thomas Cook India, says: "Bulk buying ensures the travel company is able to leverage troughs in pricing with its overseas suppliers, more so in a lean economic environment. Such superior pricing has been passed on to customers for the coming holiday season through special-value pricing."

Bulk buying can cut travel costs 20-25 per cent. Low-cost airlines are integral to economical trips. With the global slowdown in tourism, this is the best time to leverage great deals.

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Low-cost or no-frills carriers are up to 25 per cent cheaper than full-service ones, say travel experts. Therefore, compare various hotel packages before zeroing in on one. Also, consider budget hotels, which typically offer rates 30 per cent cheaper than others.

Cox & Kings' Anand says choosing a hotel not located at the heart of a city may help avail of 20 per cent cheaper room rates. If you have relatives in the city you plan to visit, stay with them. This is because accommodation accounts for a large portion of foreign trip expenses.

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One could also ask relatives in the holiday destination to make bookings, as this would help save on foreign exchange conversion costs. Typically, this helps one save 5-10 per cent. For instance, buying tickets from expedia.com would be cheaper than tickets from expedia.co.in (India website), as is the case with travelocity.com and travelocity.co.in.

Experts say, abroad, one has to pay various charges on air tickets such as transit costs, shifting date costs and fuel surcharges. They, however, add that these lead to only a minor difference in the prices of tickets.

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A tour package, by its very nature, includes sightseeing tours, meals according to plans and airport transfers; everything is pre-arranged and pre-booked. And, you don't miss important sightseeing destinations. In the case of group-travel packages, the prices may be lower.

However, many find such pre-arranged tours hectic, as one has to adhere to the plan of the tour operator/guide. This category of travellers may consider the FIT (free independent traveller) format, in which one has the choice and flexibility to choose sightseeing destinations. A FIT traveller can also choose the airline and the number of days he/she plans to spend at a particular destination.

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"In this case, travel expenses may rise 30 per cent, compared to a group holiday," says Anand. Buying foreign exchange (forex) is another aspect of travel one has to consider carefully. Indian travellers can buy forex only from a Reserve Bank of India (RBI)-licensed company like Cox & Kings, and not from any foreign operator or portal.

According to the Foreign Exchange Management Act, customers have to provide know-your-customer details and compliance documents for availing of this facility. One can take up to $10,000 (Rs 5.50 lakh) of forex a year for personal use.

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Though one can buy forex in cash from an RBI-licensed company and pay as and when required, carrying much cash isn't advisable. The good old travellers' cheque is a good alternative.

If bought from HDFC Bank, it costs one per cent of the rupee value of the travellers' cheque. For transactions of up to $500, the bank charges 0.75 per cent of the rupee value of the cheque. There's also the option of prepaid travel cards. These can be loaded in India and used abroad.

In this case, forex conversion charges would be applicable at the rate prevalent on the day of conversion. One can also use a rupee credit or debit card.

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Here, too, forex conversion charges would apply. Flexi foreign exchange cards, or multicurrency cards, are also popular. These are loaded with more than one currency and can be used across countries. For instance, a card used across Europe in the euro currency can be used in the UK in pounds and in the US in dollars.

For these cards, various currency rates are frozen at the time of the purchase and, therefore, one doesn't need to worry about exchange rate fluctuations. Bankers say if one plans to travel in December, he/she should buy forex now. One may also choose to buy and accumulate forex when the conversion rate is favourable.

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Each holiday season offers both domestic and international options. On the domestic front, this time, western and southern regions such as the Andamans, Kerala, Goa and Rajasthan seem to be the favourites.

Among international destinations, Southeast Asian regions such as Singapore, Malaysia, Thailand, Mauritius, Sri Lanka and Hong Kong-Macau are expected to be top draws.

Thomas Cook's Pai says the Philippines is also emerging as a viable new destination. It is good value for money, he adds. Compared with the US and the UK, one could save 35-40 per cent on tickets to that country.

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Vishal Suri, deputy chief operating officer (tour operating), Kuoni India, says travellers are opting for breaks to places where prices are reasonable.

"For Indians, Southeast Asia has always been a popular destination. The ease of securing visas, proximity and bargain-shopping have attracted Indians to the Far East. These destinations offer an opportunity to enjoy a three- to four-day break without much hassle and planning. On the domestic front, weekend packages for destinations at drivable distances have gained popularity as last-minute getaways," he says.