BT explainer: What is a staycation — and why it may be the only practical holiday option this summer

The 2026 summer holiday season is being reshaped by geopolitics. The Iran-linked conflict in West Asia has disrupted critical oil supply routes, particularly through the Strait of Hormuz, pushing crude prices sharply higher. This has had a direct knock-on effect on aviation turbine fuel (ATF), the single largest cost component for airlines.

Fuel typically accounts for 25–40% of an airline’s operating costs, but recent spikes have pushed that share closer to 50–60% for some carriers. As crude surged—rising over 45% month-on-month in March 2026—ATF prices followed, especially for international operations where price caps are limited. In India, while domestic ATF hikes were partially capped, international fuel costs jumped steeply, with prices rising from around $87 per barrel to over $235 per barrel in a short span.

Airfares surge

Airlines have responded by increasing fares and introducing or sharply raising fuel surcharges. These surcharges now account for 30–50% of total ticket prices on several international routes.

According to various news reports, return fares on the Delhi–Ho Chi Minh route have surged to around ₹40,000–₹46,000, while tickets from Delhi to Bangkok are currently priced between ₹34,000 and ₹53,000. On several international routes, fuel surcharges alone are now contributing nearly half of the total ticket cost.

Carriers such as IndiGo and Air India have raised surcharges multiple times since March. IndiGo, for instance, increased fuel charges on Southeast Asia routes to as much as ₹3,500–₹5,000 depending on distance, while Air India raised surcharges to $100 per passenger on select routes.

Adding to this is a capacity constraint. With travellers avoiding West Asian hubs like Dubai and Abu Dhabi due to safety concerns, demand has shifted toward Southeast Asia. However, airlines have not significantly expanded seat capacity, resulting in 25–30% fare inflation across key leisure destinations.

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Rupee weakness and package inflation

The pressure is compounded by currency depreciation. The rupee has weakened from around ₹84 to nearly ₹94 against the US dollar, making international travel inherently more expensive. At the same time, higher insurance costs, longer flight paths due to airspace restrictions, and elevated operating expenses are pushing up overall travel budgets.

Even policy relief has had limited effect. The government’s reduction in Tax Collected at Source (TCS) on overseas packages has been offset by a 20–25% rise in package costs, leaving travellers with little net benefit.

What is a staycation?

In this high-cost environment, the concept of a staycation is gaining relevance. A staycation, combining “stay” and “vacation”, refers to taking time off within one’s own city, nearby destinations, or even at home, focusing on rest without long-distance travel.

Rajiv Mehra, General Secretary, Federation of Associations in Indian Tourism & Hospitality (FAITH), explains: “Staycation means choosing to relax and indulge within your city or nearby. The purpose of a holiday is to rejuvenate, and that should not burn a hole in the pocket.”

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Why staycations are becoming the default choice

Beyond cost savings, staycations address a deeper issue—travel fatigue. Traditional holidays often involve rigid itineraries, packed schedules, and constant movement. “Many people find these trips hectic and lacking flexibility. Holidays end up being tiring instead of relaxing,” Mehra notes.

Staycations, in contrast, offer complete flexibility. Travellers can move at their own pace, avoid airport stress, and still access high-quality hospitality. There is also a rediscovery angle—many people are now exploring nearby destinations they had previously overlooked.

For instance, short getaways from metro cities to nearby hubs — such as Delhi to Manesar—offer resort-style experiences without the cost and complexity of international travel.

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A structural shift this summer

With outbound travel demand already down 15–20% this season, the shift toward domestic and short-haul options is becoming more pronounced.

In effect, the Iran conflict has triggered a chain reaction—higher oil prices, elevated ATF costs, rising airfares, and weaker currency — all converging to make foreign holidays significantly more expensive. In this environment, the staycation is no longer just a trend; it is emerging as a practical, cost-efficient and stress-free alternative for summer 2026.