Millenials Now Save For Travel

The 2014 FIFA World Cup left 28-year-old Shoebahmed Shaikh enthralled but broke. An avid sports aficionado, Shaikh invested all his money towards a trip to Brazil. Having learnt a lesson since, Shaikh has been investing a small sum every month for the next World Cup to be held in Russia in 2018.
The growth of solo travelers and double income no kids families is giving rise to the trend of allocating a budget every month or year for travel. Financial advisors and travel companies say travellers target international destinations they have to visit a year or two later and begin earmarking a portion of their income towards that.

“After the 2010 FIFA World Cup, I realised I want to sustain this every 4 years and I need to save in a systematic manner,” said Shaikh who uses Scripbox to invest in mutual funds. From hiking to the Everest base camp to being part of a ‘Cyclathon’ in France, people are planning ahead and saving regularly, says Ashok Kumar, CEO and co-founder, Scripbox. “A goal based approach that Scripbox offers helps them manage their money in a simple fashion,” said Kumar.

With an RD (recurring deposit) choice through bank tie-ups, travel operators see first-time international travellers embrace the option. Travellers can either choose from a set of destinations, depending on the amount they can save every month or set aside some money, based on which the firms will customise the travel plan and destination. Such plans appeal to the salaried class.

Thomas Cook saw a growth from an initial 3,000 passengers in FY 15-16 to 16,500 passengers in FY 16-17. “We encourage people to save every month, partnering with banks on a savings scheme and depending on how much they can put in every month, we can ensure the planned travel happens unaffected by inflation, GST or other surprises that may come their way,” said Abraham Alapatt – president & group head – marketing, service quality, financial services & innovation, Thomas Cook.

While people have always planned their travel, they haven’t actively considered vacation as a financial goal. Amar Pandit, founder & chief happiness officer at HappynessFactory.in says he has seen an 80% jump in the number of people consciously setting aside money for their travel goals in the last 3-5 years besides a 20% increase in the budget towards travel.

SOTC also has the holiday investment plan to help the risk-averse customer. Travellers are also warming up to EMI (equated monthly instalment) options for immediate travel needs. “While it cannot be called savings, the increasing number of takers for the EMI scheme indicates that travel is one of the important sectors millennials are willing to budget for every month and their travel solely does not depend on the disposable income,” said Sharat Dhall, COO, B2C, Yatra.com. The company sees international travellers take EMI options for up to Rs 2 lakh.