Millennials are availing loans to finance travel to their dream destinations. By Team Viva
More than a perfect house or balcony, it is the number of stamps on passports that milleninals save for today. With India estimated to become the youngest country by 2022, the Indian millennials are majorly influencing the country’s travel trends, which show that travel has become a way of life for many young Indians and they are structuring their work and financial plans to ensure frequent getaways. They don’t share their parents interest of investing in commodities.
Keeping in mind that Indians are travelling more than the global average, Nalini Gupta, head of Costa Cruise, India, says that the trend of travel loans has emerged and now many fin tech companies are offering personal and retail loans for people to sponsor their travel packages. “However, the young Indian and especially the Gen Z, which grew in the midst of the great recession, have also become fiscally conscious travellers, who will pre book to save money and unlike their parents do not make last minute travel decisions,” she says.
According to Karan Anand, head relationships, Cox & Kings, “The trend of taking more than one holiday by milleninals has led to many of them opting for travel loans. These are for destinations such as the Far East and Europe. Even those who take short breaks to Dubai any Abu Dhabi fall in this bracket. These loans have a tenure of 18 to 24 months which make them attractive.”
Heena J Akhtar, co founder, TripXOXO says, “Travel loans have become prevalent in the last three years. Patrons are opting for their dream trips because they can upgrade the trips to international destinations especially for their honeymoons. Travellers are also exploring high-end experiences such as a balloon flight with breakfast and falcon show, a helicopter ride, Abu Dhabi Formula 1 or a skydive which make their holidays memorable. People do pre-bookings for summers before prices increase.”
The cruise industry in India is also expanding rapidly. This is because the cruise product meets many of the requirements of travellers, who want good food, well-planned entertainment activities, Instagrammable experiences and visiting unique ports. Nalini says, “Cruise options provide great value for money propositions and more than anything are hassle-free. Given the growing demand of Indians wanting to cruise, it is estimated they will exceed Chinese cruise passengers soon. The major cruise destinations are Singapore, Europe, Dubai and Maldives.” Since cruises don’t come cheap, finance offers a good option to travellers.
Anand Menon, brand leader, Travel Tours, Leisure Travel Brand of FCM Travel Solutions, points towards the summers as the season for the maximum number of vacations. He says, “There’s an increase in demand and therefore the cost of travel packages is bound to go up due to the rise in airfares and the rate of exchange (ROE). However, the rate of interest (ROI) for travel loans doesn’t fluctuate significantly throughout the year, unlike ROE which can witness fluctuations dramatically.”
For instance, he says, on a given day the rate for one euro could be Rs 80 and after a few months, it could be Rs 87. Thus, the cost of travel packages can only be affected by the ROE. Also, this year, since the holiday season is approaching, we have witnessed an increase in queries by 38 to 39 per cent in March vis-à-vis January and February. Customers who book early always benefit.
People usually take loans between Rs 2.5 lakh and Rs 5 lakh for international destinations. The most common destinations are Europe, Australia and South Africa to travellers who might otherwise choose regular haunts in Goa, Thailand or Sri Lanka.
