Soaring loonie’s impact being watched closely

Tourism Whistler hopes for strong long-haul markets offset lower U.S. visitations

Kellen Barrett
Special to The Question

The Canadian dollar’s rise toward parity with its U.S. counterpart has certainly affected visitations to Canada, but the continuation of a loonie at or near par isn’t likely to cause major upheaval in the overall number of visitations to Whistler, a Tourism Whistler (TW) official said last week.

“The last time this happened, in late 2007 and early 2008, Whistler saw a mix of reactions,” Jeff McDonald, TW’s manager of corporate communications, said last Thursday (April 8). “We saw travellers in key markets in the U.K., Europe and Australia, whose currencies had also strengthened against the U.S. dollar, choose Canada for their vacations.”

There’s little doubt that a strong loonie — its value edged above that of the U.S. dollar in trading on Wednesday (April 14) — has a negative impact on the number of visitors to Canada, though. The Canadian Tourism Commission’s (CTC) recent Short-Term Competitive Outlook report for the first quarter of 2010 predicted that “the stronger value of the Canadian dollar and a significant year-over-year increase in average airfares to Canada” would likely lead consumers to consider destinations other than Canada.

The cost of Canadian travel products compared to those of their international competitors affects the Canadian tourism industry’s ability to provide a relatively affordable vacation in comparison to other nations. Based on up-to-date statistics, the nation’s Competitive Price Index (CPI) is calculated by comparing airfare, hotels, meals and other costs against those of other destinations.

The same report also states that the U.S. domestic market is Canada’s main competitor “for weekend getaways and mini-break trips made by U.S. travellers” as American travellers choose to spend their dollars at home. Analysis suggests that a four-night hotel stay with airfare, meals and other items at a Canadian destination will cost Americans 12.6 per cent more this year than last.

The Globe and Mail reported last week that in the past year alone, the loonie has risen 24 per cent against the U.S. dollar. At least partly as a result, visits by Americans to Canada — which hit a peak of 42.9 million in 2001 — fell to 20.5 million trips in 2009, the lowest number since the 1970s, the newspaper reported, citing statistics from the Tourism Industry Association of Canada.

The high loonie also means Canadians can afford to travel more inexpensively to other parts of the world, the Globe reported.

McDonald, though, said he doesn’t believe that dollar parity will have as devastating an effect on tourism as some might believe. While the cost of a vacation is certainly the most important factor in planning, McDonald said he doesn’t think hotels will see markedly fewer guests; instead, he’s confident that Whistler offers enough of a competitive edge to ensure that visitors to the community are getting their money’s worth.

“Visitor numbers will be largely determined by the strength of the economy and then a range of other factors.

“The global profile we gained as a Host Mountain Resort for the 2010 Winter Games, our offering great value in the resort, by new products like the Peak 2 Peak Gondola at Whistler Blackcomb and by lots of great snow, which we’ve certainly had this year” are all factors working in the resort’s favour in the short term, McDonald said.

The last time the loonie’s value rose above that of the U.S. dollar, TW officials adopted a policy encouraging local businesses to accept U.S. dollars at par as a way to encourage Americans to visit. TW officials haven’t said whether they intend to bring that policy back if the loonie continues to rise against the greenback.