Loonie troubles turn foreign getaways into Canadian staycations
Canadian dollar slid to its lowest level since 2003 earlier this week, sliding below 71 cents US
Canada's sliding loonie, which recently hit its lowest level in more than a decade, means those wanting a quick getaway south of the border may have to rethink their travel plans.
The Canadian dollar was trading at 70.67 cents US at mid-day Friday, and has spent much of the close of 2015 declining in value.
That means travellers looking to spend time in the States, or any nation abroad on par with the U.S. dollar, will find their money worth roughly 30 per cent less.
That math makes staying put in the Great White North all the more attractive, and staycations, as they are called, look to be more popular options for many Canadians who can make their loonies go further at home than abroad.
People are still travelling, but they're looking for more value.- Allison Wallace, Flight Centre Canada
"Lots of people are starting to stay in Canada, which is great because the market is perfect," says John Lelis, a travel counsellor with Edmonton-based Real Canadian Travel agency.
"Canada: it's beautiful and it's huge."
The New York Times even listed B.C.'s Southern Gulf Islands and Toronto as among the top travel destinations for 2016.
The year of staycations?
Last year, Canadian travel within the country increased by 2.8 per cent, partly because of the weak dollar, according to a report by the Conference Board of Canada.
Canadians were also enticed into local travel by major sporting events around the country, like Toronto's Pan Am Games.
The conference board predicts Canada's overnight domestic travel will continue to grow over the next few years, increasing by 2.4 per cent this year thanks to both the low loonie and low gas prices. More visitors are expected to head to Halifax, Quebec City, Montreal, Ottawa-Gatineau, Toronto, Winnipeg, Calgary, Edmonton and Vancouver this year, according to the board.
Lelis says his agency has seen an increase in demand for condo rentals near in picturesque Alberta ski towns such Canmore and Banff. All the travel agency's available condos in the area are already booked up for this month, he says.
Whistler Blackcomb, a B.C. ski resort, recorded 90,000 more visits for the fiscal year ending Jan. 3, 2016 than for the same time period the year before, according the company said. This is partly due to the low Canadian dollar, wrote Chelsea Moen, a public relations supervisor, though she also attributes it to other factors, like plenty of snow for the downhill enthusiasts.
This summer, Banff tourism was also booming thanks to the already low dollar.
Not only will a local vacation cost less, because travellers won't be dinged by the current U.S. exchange rate, says Lelis, but staying closer to home can also reduce travel costs.
"If you can eliminate the flight, you [are] already saving a lot of money," he says.
That's significant savings for those Canadians who have significantly reduced their vacation budgets this year in the wake of growing financial fears.
In previous years, many of Lelis's middle-class clients frequently told him they had roughly $4,000 to spend on a vacation. Now, he says, most seem to have a hard limit of about half that.
Sun destinations can still be affordable
Despite smaller budgets, some vacationers are still looking to head beyond Canada's borders on a budget.
"People are still travelling, but they're looking for more value," wrote Allison Wallace, Flight Centre Canada's director of media and communications.
- Spending tips for taking an American vacation on the low Canadian dollar
- Travel tips to help your loonie go further
Flight Centre Canada noted a 10 per cent increase in all-inclusive vacation package bookings recently when compared to last year. That's a similar trend to when the dollar dropped several years earlier, she says.
All-inclusive packages are a popular choice during harder financial times because people don't have to budget much extra money for food and drinks, she says, plus they can pre-pay for most of the trip.
Canadians are also being drawn to places where there is "bigger bang for your buck," Lelis says. He's recently been booking more and more trips to Honduras, for example.
But for those heading abroad, trips also seem to be getting shorter.
Before the loonie's troubles, most people booked vacations in two-week stints, says Lelis. Over the past several months, he's noticed people have shortened their getaways to one week.
Canadians also booked fewer multi-week trips over the summer, adds Flight Centre Canada's Wallace. Instead, they booked more shorter trips, like over the span of a long weekend, she says.
Of course, there are some people whose plans will go unaffected by the limping loonie.
"The luxury market is still good," says Lelis. "The people who really have money to go on holidays and then spend a lot of money, they're still doing it."