Just before 7 a.m. Eastern Time Tuesday, before 4 a.m. locally, the Canadian dollar reached par with the U.S. buck. As historic moments go it wasn't up there with 8:46 a.m. on Sept. 11, 2001 or 8:15 a.m. Aug. 6, 1945. In fact, you probably would have had trouble spending a dollar in Whistler at that time Tuesday morning.
But it caught the attention of Canadians. The first thoughts in many people's minds were this was a good thing - our currency is equal to our American neighbours'. And coming out of a tough recession, let's think about celebrating, maybe by going to the U.S. and spending some at-par dollars.
But a little further reflection reminds us that a Canadian dollar at par with the U.S. dollar, and up 24 per cent against the euro and at a 25-year high against the British pound, is another challenge for Whistler and everyone else in the Canadian tourism business. It makes it more expensive for Americans and Europeans to come to Whistler and cheaper for Canadians to vacation in those countries.
This is not the first time the loonie has reached par with the U.S. dollar. It happened - for the first time in three decades - in the fall of 2007. But that surge was a function of soaring oil prices and a sliding U.S. dollar.
"Everything's aligned for the Canadian dollar to keep appreciating throughout this year and next," Camilla Sutton, a currency strategist at Scotia Capital in Toronto, told the Globe and Mail this week.
Bank of Montreal deputy chief economist Douglas Porter told the Toronto Star, "We have the dollar trading next year between US$1 and US$1.05."
How much influence exchange rates have on people's vacation plans is, of course, worthy of debate. Many people don't even think about it until they get to their vacation destination and discover that this foreign country has its own currency. But exchange rates are reflected in the price of vacation packages sold in other countries. So whether the vacationer knows it or not, the exchange rate does impact the price of their holiday.
Then you add in the harmonized sales tax, which on July 1 adds five per cent to the cost of things previously exempt from the GST like lift tickets, golf passes, ski lessons and restaurant meals, and the challenge becomes a little greater.
Interest rates have also started to climb, which will have an impact on individual families' finances and perhaps an indirect impact on their vacation plans.
The rise of the Canadian dollar is in some ways a corollary to the shakiness of the U.S. economy. America may be working its way out of the recession but there are still millions of Americans who lost their jobs and/or their homes in the last two years. They aren't going on vacation this year.
Americans, of course, make the majority of foreign trips to Canada. And with the Olympics raising awareness of Whistler and Canada, and marketing efforts to capitalize on that Olympic awareness, we should see more American visitors.
But any Olympic boost will come after a decade of declining visits to Canada by Americans. According to the Tourism Industry Association of Canada, visits by U.S. residents have fallen 52.2 per cent, from 42.9 million trips in 2001 to 20.5 million trips in 2009.
These are broad numbers in an industry full of variables specific to individual destinations. Trips to Canada by Americans are not what Whistler is really concerned about; it's trips to British Columbia and Whistler, likely by people from Washington and California.
Still, the trends - in U.S. visits, in the economy, in interest rates and exchange rates - are part of the context as Whistler leaves the Olympics behind and focuses on the future.
Exactly what that focus is or should be remains amorphous. For seven years business plans, marketing strategies, staffing levels, training and other efforts were focused on February 2010 - for a good reason and with good results. But where do we go from here?
The primary organizations in Whistler - the municipality, Tourism Whistler, Whistler Blackcomb and the Whistler Chamber of Commerce - are all working to answer various aspects of that question. And they are looking for input. This week the chamber sent out a survey to its members seeking input as it develops a vision for the Whistler business community. Completing the survey is an important first step in determining where Whistler goes from here in these challenging times.
