The Canadian loonie took flight late in 2013 but over the last four months the dollar has lost serious altitude.
Trading of the Canadian dollar is currently about 89 cents compared to the American dollar (Jan. 28). The last time the currency was trading in the 90-cent range was August of 2009.
Tourism and retail businesses are pleased with the downward trend of the dollar. Most do not watch the dollar comparisons on a daily basis, but everyone experienced how currency values influenced business in Fernie through the 1990s.
There is no doubt the Non-resident visitor and the dollars they spend are an important part of Fernie’s overall success and that is clearly recognized by Fernie’s accommodations businesses.
“Visitors coming here when the US dollar was strong were spending more at our hotel properties as well as at many other businesses in town,” said Scott Gilmet, of Park Place Lodge & Park Vacation Management, of his memories from the 1990s.
“A drop in the Canadian dollar can provide added value for our US, European and South Asian visitors,” said Gilmet. “We have the potential to benefit because a stronger US dollar also makes Fernie more attractive for Canadians who would otherwise consider US vacation destinations.”
Gilmet said currency exchange rates are just one factor affecting consumer decisions.
“It does take some time for people to adjust their habits — a significantly lower Canadian dollar over an extended period of time would be more likely to impact visitor behavior,” he said.Destination visitors powered Fernie’s real estate surge through the 1990s courtesy of a long-term weak Canadian dollar. Canada’s loonie reached a high value of 89 cents in October of 1991 before nose-diving down to a low of 65 cents in November of 1998. From that low point the Canadian dollar started climbing back up until the fall of 2007 when currency values on both sides of the Canada-U.S. border reached par.
Todd Fyfe of the Fernie Real Estate Co. said a weakened Canadian dollar could play a role in real estate decisions.
“We haven’t seen the phone ringing off the hook from the US,” Fyfe said, but he noted that non-resident clients who purchased second homes in Fernie late in the 1990s got very good value for their money.
“It certainly sets the table for a positive discussion going forward,” Fyfe said of the current slide in Canada’s dollar. “At the same time the dollar is falling, of course, credit availability for non-residents has not gotten better.”
While summer tourism continues to grow in Fernie, Fyfe and Gilmet both agree that snow still has the most significant impact on Fernie’s economy. When Fernie has lots of snow tourists come in the winter and business across the entire town picks up.
“The success of the resort as a tourist attraction leads to more interest in real estate in the area,” said Fyfe.
According to Fyfe, the dollar will have to drop at least 10 more cents before it will begin to influence real estate in Fernie. Gilmet is hoping for lots of snow in February and March!
