LOONIE’S SLIDE BOOSTS TOURISM
International arrivals in Calgary up nine per cent, says Travel Alberta
The summer of 2015 has so far been an exceptional one for Laggan’s Mountain Bakery, a popular pastry shop in Lake Louise.
With lines longer than ever out the front door, the bakery has stepped up its game. That’s meant baking more cookies, more brownies, and adding more staff working extra hours.
“I would say we’ve almost doubled as far as sweets go,” said manager Lori Mackay. “This year seems to stand out to me. It’s by far the busiest and a lot earlier to be busy. Usually it wouldn’t be this busy until the end of August.”
The bakery has added three new positions this summer to keep up with its sales, which are expected to continue growing.
Like Laggan’s, many Alberta businesses have benefited from an influx of tourists to the province as the value of the Canadian dollar continues to sink. The loonie continued to fall on Thursday, closing at 76.69 cents US, its lowest value since September 2004 for the second day in a row.
University of Calgary economist Michal Moore said investment in Canada has cooled because enthusiasm in Canada’s resources has dropped.
“The reason it’s fallen is because our fundamental groups are resource-oriented,” he said.
“Our ability to get new goods out to market via pipelines or wires is compromised right now. The future for exports is, at least, challenged.”
But the exchange rate has been a boon for Alberta’s tourism industry. International travel to Canada has become more affordable as foreign visitors seek to take advantage of Canada’s weaker currency, relative to their own.
“One week at the beginning of July, we decided as a team just to start watching the licence plates around town,” said Leslie Bruce, president and CEO of Banff Lake Louise Tourism. “Within one week alone we saw licence plates from over 33 different states in the U. S., as far away as Florida and Hawaii, and as near as Washington State, Montana.”
International arrivals in Calgary are up nine per cent this year, and 16 per cent in Edmonton, says Royce Chwin, CEO of Travel Alberta. This has provided a boost to national parks such as Banff and Jasper, which have seen an 11 and eight per cent rise, respectively, in leisure travel.
Historical sites and museums in the province have similarly seen a 7.5 per cent boost in visitors, while occupancy at resorts is up four per cent.
“That U. S. market, for us, is very powerful,” Chwin said. “What we feel is the work we’ve been doing in northern and southern California and Texas over the last five years, very specifically to target those markets, is really beginning to pay off as the dollar has fluctuated.”
Bill Keeling of Wilson Mountain Sports, a sporting goods store in Lake Louise, said he started noticing more American customers in the store around May. Higher end clothing and equipment, such as watches, have been in high demand ever since.
“We’ve had maximum staffing levels for sure because business is healthy,” Keeling said.
Leisure travel to Calgary was up four per cent from 2014 during the first quarter of this year, according to Tourism Calgary. Recent events such as the Calgary Stampede have been strong indicators of the continuation of this trend. Advanced ticket sales rose by two to three per cent among all international visitors, led by U. S. tourists, from last year.
“With the dollar being where it’s at right now, Canada essentially looks like it’s on sale,” said Stampede spokesperson Jennifer Booth.
Chwin said Alberta is better positioned than it’s been in five years to take advantage of the currency fluctuation because net airline seats in the province are up 17 per cent since 2010.
Banff Lake Louise Tourism’s marketing is in large part focused on Canadian regions right now such as the Greater Toronto Area, as Canadians look to cheaper vacation options than travelling abroad. While the exchange rate has meant an influx of international tourists to Canada, it’s cut into Canadians’ travel plans elsewhere.
Fifty- eight per cent of Albertans indicated they would vacation in other parts of the country rather than the U. S. this year, according to an Insights West survey, about nine per cent higher than the Canadian average. Fifty- five per cent of the province said the falling Canadian dollar had a significant or medium impact on their travel plans over the next 12 months.
The sentiment was felt this past winter in Whitefish, Montana, a resort town not far from the American border, where more than a third of visitors come from Alberta. There were 10 per cent less Albertan tourists in Whitefish between January- March compared to the same period last year.
“Where we see it most is in the lodging component. There are quite few Canadian residents specifically from Alberta who either own a second residence in Whitefish or have friends or family that do,” said Dylan Boyle, executive director of the Whitefish Convention and Visitors Bureau.
Lesley Keyter, head of The Travel Lady Agency in Calgary, says she’s seen a difference in the type of travel they sell for the past six months, and especially less family vacations.
“Certainly travel to the U. S. and in particular places like Hawaii have dropped off somewhat,” Keyter said. “They’re definitely concerned about going down and then having to pay in U. S. dollars. If you’re going out for a meal and charging to your credit card, when you come back, you’ve actually spent a lot more than you thought. It comes as a bit of a nasty surprise.”
Canada’s exchange rate could hover close to its current level until winter, said Moore, adding that he thought the Bank of Canada would intervene if it fell much further.
Travel Alberta is operating in the belief the Canadian dollar won’t return to 80- 85 cents US anytime soon, Chwin said. If it remains weak until the end of 2015, it would present Albertan resorts and ski facilities with further opportunities. But Moore said he hasn’t seen the tourism industry trying to take advantage.
“This is bold stuff because nobody wants to be using a phrase like ‘ come here because our dollar’s depressed,’” he said.
Bruce said Banff Lake Louise Tourism would look to increase marketing efforts leading up to winter in certain key U. S. regions, such as California, Texas, New York, Illinois and New Jersey, but its messaging won’t focus on the exchange rate.
“One thing we’re very conscious of is that we don’t want to be pushing this as ‘ hey, this is cheap, cheap, cheap.’ We don’t want to take a short- term positioning on something that could hurt our long game,” she said. “It’s tempting to say ‘ come now because it’s cheaper’ but we’re keeping the long game in mind and building a brand.”