How exchange rate is impacting travel business — operators

The recently introduced flexible exchange rate is taking its toil on foreign travels. Naira-Dollar Nigerians, who hitherto, love travelling are begining to adjust to the  reality of  high cost of travelling abroad. Bankole Bernard, a travel consultant, said the travel and tourism sector is, by nature, an international business. Although your company will conduct transactions using the dollar, payments for overseas  trips will involve foreign currencies, the values of which today is  fluctuating sharply. He said most Nigerians would have loved to travel for summer as schools will be  closing soon, but will not be able to do so as the cost of tickets  has gone up. “The current exchange rate is not favourable to doing business as the country currency is so weak  and that makes travel very expensive now.” Most Nigerians believe that the  floating exchange rate system introduced recently by the Central Bank of Nigeria, which allows the  Naira value  to fluctuate in accordance with the foreign-exchange market, has impacted travel business greatly. Mrs. Lami Opawale, a travel consultant, said  when  your currency is strong, it means you can buy much more  currency to spend  in the country  you like to spend your vacation. The managing Director of Ule Travel & Tours said  with strong Naira that Nigerians can afford to travel  as doing so  becomes much more cheaper, “your willingness to travel to other countries will increase.” But she regretted that the weak Naira to the Dollar has made travelling more  expensive now , “ can you imagine that tickets to major destinations from Nigeria are three times  what they used to be in the past. Mrs. Opawale said airline tickets that used to sell for N180, 000 are now in the range of N300, 000 depending on the airline. “Airline like Air Rwanda that used to be in the range of N150,000 – N180, 000 now sell for N290,000 plus.” She said British Airways, which most Nigerian elites love travelling with , now has its economy class  as high as N700, 000 and above . The Managing Director , Aviator Tours,  Mrs. Tinuke Nwakohu, corroborated this , saying most airlines in the country have removed cheaper fares on their bookings leaving just the high fares, adding that the local airlines flying international are doing same too. Throwing light on the exchange rate, Lami Opawale said the International Air Transport Association (IATA)  sanctioned rate is N199 to one American dollar, but by the last check on Monday , it was N250 to one American dollar. “Some airlines charge in dollars, but since the warning from the government that they should not do so, some of the airlines have stopped charging in dollars. “I have to tell you that lots of Nigerians are not buying tickets. I had some clients whose kids were to graduate in London but with the high exchange rate that made the air fare high they ended up not travelling. Another tour operator, Folashade Lawal, said the weak exchange rate is Nigeria loss but the gains of  travel business in Europe and the US as most Nigerians now asked their family members and friends to buy them tickets overseas as they are cheaper there. She said this would have been the best of time to attract tourists to Nigeria from the US and other European countries  taking  advantage of the strong dollar to visit various attractions here .But, she regretted that the country’s tourism attractions are not properly package by those involved in selling the country as a destination. “So,  if you are involved in luring travellers to the Nigeria., you are likely to see diminished numbers of foreign visitors booking through your agency.” The National President of the National association of Nigeria Travel Agencies (NANTA), Bankole Bernard , explained that  the present exchange rate has made it difficult for those who want to travel  to do so as they do not have the luxury of different airlines to choose from as most airlines are currently taking their operations out of Nigeria due to the exchange rate. “Low value of Naira and the inability of foreign carriers to repatriate their revenues have forced United Airlines and others to withdraw services to Nigeria.” He said those still operating from Nigeria are not running at full capacity, “” Ethiad Airways used to operate  two flights  from Lagos and one from Abuja, but because of the capacity issue they have reduce the number  of flights they operate from the country. “Iberia  decision to leave Nigeria was in response to the difficult times and the inability of the airline to record high load factor as it used to do, as economic crunch bedevilling the nation had depleted the finances of those who otherwise would travel out of the country on business, tourism or leisure. Bernard added that with each airline leaving the country or those reducing their flights or  the aircraft they use , “it translates to job lost in the country.”
SOURCE:Vanguardnews,graciousgist.com