Canadian dollar is flying high, often migrating to U.S. resorts
________________________________________________________
THE ASSOCIATED PRESS
OLD ORCHARD BEACH, Maine - With Canada's currency at a 28-year high against the U.S. dollar, business owners on this side of the border are getting ready for an influx of tourists from the north.
The Canadian dollar has jumped more than 40 percent in the past four years and reached heights this month not seen since 1978, giving visitors more bang for the loonie, the popular name of Canada's $1 coin that features a loon.
Old Orchard Beach has been a popular vacation spot for French-speaking Canadians for years, but business dropped off with the Canadian dollar on the skids. Now, it's coming back.
Pierre Janelle, a third-generation motel owner, remembers when Canadians accounted for 80 percent of the customers during the peak months of July and August. In recent years, Canadians have made up barely 5 percent of his clientele.
"Now we're hearing from people who say, 'We haven't been there in 10 or 12 years, and we're coming back,'" said Janelle, the owner of The Edgewater motel.
In the 1950s and briefly in the 1970s, the Canadian dollar was worth more than its American counterpart. But it has been in the dumps for nearly 30 years, giving Canadians diminished buying power when they visit the United States. It bottomed out in 2002, when it was worth just 62 U.S. cents, meaning it took $1.60 in Canadian money to buy $1 in U.S. currency.
Since then, the Canadian dollar has been growing. In May it broke the 90-cent level for the first time since 1978. Economists said that the loonie is getting stronger because of a solid Canadian economy and high prices for oil, gas, lumber and other commodities from Canada.
That's good news for such resort towns as Old Orchard Beach that rely on Canadians.
Here, Canadian flags fly outside many businesses, French-language Canadian newspapers are found in motel lobbies, and fries with gravy and cheese - a Canadian favorite - are served. For people in Quebec, Old Orchard offers the closest sand beaches a half day's drive away.
When the loonie was weak - it was worth less than 70 U.S. cents from 1998 into 2003 - a lot of Quebecers who previously came to Maine for vacation chose instead to go to New Brunswick or Ontario, said Guy Dagenais of Beloeil, Quebec. Others switched to cheaper motels or came in the off-season when the rates were lower.
Canadians' travel patterns are now changing, Dagenais said as he ate a slice of pizza in Old Orchard Beach last week with his girlfriend. "After visiting there for a few years, people are coming back to the United States with the stronger dollar," he said.
Crossborder shopping and travel is up along the entire U.S.-Canada border, said Manny Witt, the director of the New England Tourism Office in Montreal, which promotes tourism to the six-state region. Retailers from Maine to Washington are reporting strong sales to Canadians, he said.
"People are saying they haven't seen this happening since the early '70s," Witt said.
Canadian visits to the United States fell earlier this decade as the Canadian dollar hit bottom. But visits have slowly increased the past few years in tandem with the dollar's rise. In the first three months of the year, the number of Canadians traveling to the United States rose more than 5 percent from 2005, according to Statistics Canada.
A couple of weeks ago, Witt's local bank ran out of U.S. currency because so many people had bought it up for trips across the border. On one recent day, his office received nearly three times the number of requests from Canadians for tourism brochures to Maine than on the same day last year, he said.
Besides the increased buying power of the loonie, the United States is an attractive destination because taxes are lower and gas is cheaper than in Canada, Witt said. Some of the New England hot spots for Canadians this summer are Old Orchard Beach; Hampton Beach, N.H.; Boston; Cape Cod and Newport, R.I.
At the Beau Rivage Motel in Old Orchard Beach, desk clerk Danielle Coombs took French lessons over the winter in anticipation of an increase in French-Canadians.
"It's come in handy," she said, "since most of our reservations are Canadian right now."
Still, no matter how strong the loonie gets, it's unlikely that Old Orchard Beach or any Maine resort will experience the Canadian boom of decades past when families came year after year.
"People got out of the habit of doing that," said Charles Colgan, a professor at the University of Southern Maine. "It doesn't seem like, even with the Canadian dollar up, people will re-establish those travel patterns." |
