The weak Canadian dollar (CAD) has some economists worried, but tourism sector operators on the Sunshine Coast are optimistic that the loonie’s low exchange rate with the U.S. dollar could prove lucrative.
Sunshine Coast Tour-ism (SCT) president Celia Robben said a weak Canadian dollar encourages U.S. and international tourists to visit Canada, and at the same time encourages Canadian tourists to stay within their own borders.
“If you’ve checked into going south at all right now, everything feels that much more expensive,” Robben said. “So it keeps B.C. residents and Albertans in Canada, because Albertans always want to get to the ocean somewhere – which is why we’re a great location.”
At press time the loonie was at 72 cents on the U.S. dollar (USD). The CAD started at about $0.72 USD when the markets opened on Jan. 1 and dipped to a low of $0.68 on Jan. 20. Last year, the CAD had a high of $0.86 USD and a low of $0.78.
If these trends continue into the summer, Robben said it could attract a bigger slice of the international tourism market.
“That’s still a ways away, but with the way the currency markets are, that’s a good thing for international travellers,” Robben said. “It’s good, too, as Europeans choose to come to North America and they see the price difference between the States and Canada – Canada becomes a lot more affordable.”
According to the Bank of Canada’s exchange rate graph (bankofcanada.ca), between June 1 and Aug. 31 of last year, the CAD hit a low of $0.75 USD on Aug. 26 and a high of $0.82 USD on June 18.
Destination BC recorded a total of 650,000 US tourists who visited B.C. – overnight and day-trip – in June 2015 when the dollar was high, plus almost 125,000 Asian/Pacific overnight visitors and over 60,000 Euro-pean overnight visitors.
In August of the same year – when the dollar was at its summer low – the number of tourists increased to a little over 738,000 total U.S. tourists, over 142,000 Asian/Pacific overnight visitors and over 80,000 European overnight travellers.
Bob Crosbie, owner of the Driftwood Inn in Sechelt, said he sees a clear benefit to the tourism industry.
“There is no doubt that it is a benefit to tourism in two ways – it draws more Americans here and keeps more Canadians home,” Crosbie said. “We found that we had an excellent year last year with strong revenues in both rooms and the restaurant. All indications are that it will be the same in 2016.”
Walter Kohli, CEO of SOFIEN management – which manages the Painted Boat Resort Spa and Marina in Madeira Park – also agreed with Robben’s projections.
“Summer, fall and winter 2015 generated a very positive occupancy increase for Painted Boat Resort Spa and Marina. It looks like the CAD kept more Canadians home exploring domestic destinations, whereas U.S. visitors to Painted Boat Resort increased moderately,” Kohli said.
Klaus Fuerniss, the developer of the George Hotel and Residences in Gibsons, was also optimistic about the coming tourism season.
“The exchange rate is certainly very advantageous to the hospitality industry,” Fuerniss said. “I think we will see an upswing in tourism throughout British Columbia this year.”
However, not everything about a weak dollar is beneficial, Kohli said.
“The CAD – USD currency exchange impacted food prices in grocery stores and restaurants tremendously,” Kohli said. “Particularly during the winter season when little home-grown produce is available.”
Crosbie agreed, saying the high cost of food has forced him to increase his menu prices accordingly.
“The downside of the U.S. dollar’s strength is the increase in food cost; this jumped by a whopping five per cent last year and the end is not there yet,” Crosbie said. “It looks that we will be increasing menu prices by 10 per cent roughly in the next month in order to avoid losing money in the restaurant. It also affects wine prices as many imports are priced in U.S. dollars.”
