Exchange rate impacts Canadian traffic

On Monday, Canadian George Van Bostelen celebrated his 80th birthday in an unlikely spot — the Kalispell Costco store. 

“It’s a fun place to be. You can wander around in there and have lunch with all the freebies,” Van Bostelen said with a laugh.

Van Bostelen, a native of Alberta, traveled to the Flathead Valley with his children, grandchildren and great-grandchildren — 28 in all.

They make the trip about three times a year, he said, to enjoy the outdoor recreation and shop at stores such as Costco. Oftentimes the Van Bostelen family tallies as much as $1,000 in purchases when heading back to Alberta through the border crossing at Roosville. Last week they stayed at the Meadow Lake Resort in Columbia Falls.

Over the past year, the Canadian dollar has been decreasing in value, diminishing Canadians’ purchasing power in the United States.

The loonie, Canada’s dollar, is currently worth 72 cents against the U.S. dollar, the lowest it’s been in 10 years. A dramatic decline in oil demand from Canada’s oil producers is one of the biggest factors driving the loonie’s decline in value. Meanwhile, Montana businesses are feeling the pinch as fewer Canadians make their way to the Flathead Valley.

Van Bostelen is well aware of the exchange rate when he plans a trip to the Flathead Valley.

“It makes a big difference what you’re going to spend here,” he said. “People are definitely taking a second look at coming down to the states.”

BY THE NUMBERS

In December, 18,626 people came into Montana through the Port of Roosville north of Eureka, the fewest during any December in the last five years. By comparison, 25,549 people came through Roosville in December 2014, the most during that same period of time.

July was the only month in 2015 that beat out 2014 numbers for people coming through the port. In the late summer and early fall, wildfires kept many visitors away.

It’s difficult to illustrate how many Canadians are in the Flathead Valley at any given time.

“In general, it’s hard to determine,” said Lisa Jones, a spokeswoman for the Whitefish Convention and Visitor Bureau. “We measure our success by our bed tax and resort tax, but those don’t break down where people come from, so it’s really anecdotal.”

Jones said she talks with local businesses about how the Canadian dollar value affects things such as lodging reservations. One hotel owner, who Jones didn’t want to name, said he is down roughly 25 percent on reservations.

“Whatever [the decrease percentage] was, he totally attributed it to Canadians,” she said.

Lakeshore Rentals, a different business than Jones was referring to, began offering an exchange-equivalent discount to Canadian guests on Jan. 7. This “at par” discount for Canadians is currently 28 percent, roughly the difference between the U.S. and Canadian dollar.

In Kalispell, the Holiday Inn Express has begun to consider offering its own discount to Canadian travelers this winter.

“We’re only entertaining the idea because of what’s going on” with the Canadian currency, said Beth Higgason, manager at the Holiday Inn Express. She said the hotel is considering a 10 percent discount to ease the cost for Canadian tourists.

Higgason said she has noticed a drop in Canadian reservations around popular Kalispell events such as the Pond Hockey Classic and the Three Blind Refs soccer tournament. Weekend vacancy rates have been climbing since the holiday season, she said.

“Especially weekends,” Higgason said. “Around hockey tournaments we’d usually have three or four teams staying here. Now we have only one or two.”

PLAN B IS THE U.S.A.

Dylan Boyle, director of the Whitefish Convention and Visitor Bureau, said the loonie started falling a few months ago, when it was worth about 75 cents to the dollar. Now, he’s reading predictions from Canadian economists such as David Doyle, Bloomberg’s top-ranked forecaster for the Canadian dollar, who believes the loonie could fall to 59 cents by the end of 2016. Doyle speculated the Canadian dollar could “stay depressed through the end of 2018.”

Boyle has taken Doyle’s forecast into account in determining where the bureau’s budget would be best spent.

“When I look at something like that, it reaffirms that we need to hit our domestic markets even harder,” Boyle said. “If that trend does follow form, we’re going to see an even bigger decrease in Canadian visitation.”

Last fall Boyle shifted gears for the Whitefish Convention and Visitors Bureau’s marketing strategy, pulling all advertising from the Canadian market and redirecting resources toward its four biggest domestic target markets: Seattle, Portland, Chicago and Minneapolis. Many of these travelers arrive via Amtrak’s Empire Builder passenger train that brings travelers from all four markets to Whitefish.

WHITEFISH MOUNTAIN

Riley Polumbus, media relations representative for Whitefish Mountain Resort, said she’s noted an increase in traffic from those key domestic markets.

“Over Christmas week we did see an increase in Minnesota and Washington,” Polumbus said. “Overall the numbers were good. A lot of our markets that come here are drive markets. With the price of fuel being so low right now, that could be helping us.”

Polumbus said the resort hasn’t entirely pulled the plug on Canadian advertising, but like the Whitefish Convention and Visitor Bureau it has found other markets are beginning to look more promising in the near future.

Boyle hasn’t severed the Canadian cord completely. He believes Canadian tourists will return and in big numbers.

He drew that contention from data as recent as 2014, when the state bed tax in Whitefish reached $807,446, the highest year on record. Flathead County had the same result in 2014, the highest year on record, with $3,377,318 in bed tax collections; that total includes the Whitefish collections. The statewide bed tax is a 4 percent tax on overnight lodging that helps fund the state’s tourism departments and contributes to state parks, historic sites and visitor bureaus across the state.

“When you look at those numbers, that was the biggest year we’ve ever had. The airport broke their boarding record, the park broke their visitation record and Flathead County overtook Gallatin County in nonresident spending,” Boyle said. “We’ve never beaten out Gallatin County before.”

Whitefish bed-tax collections were down from July through September 2015 by 3 percent compared to the previous year. However, 2015 was still a strong year in terms of the bed-tax collections. July through September 2014 was the only collection period larger than 2015 since the bed tax was installed in 1987.

That’s why Boyle and Jones remain optimistic.

“This illustrates that although we are currently experiencing a decrease in Canadian visitation, our tourism economy is very robust and our numbers are still not that far off from our record year of 2014,” Boyle said.

Despite the hard fall suffered by the Canadian dollar, Van Bostelen said his family will keep coming back this year.

“It’s beautiful with the snow and the trees; we really enjoy every minute of it,” he said, adding that most of the family went skiing earlier in the week at Whitefish Mountain Resort.

“We’ll definitely come back again.”

Reporter Seaborn Larson may be reached at 758-4441 or by email at slarson@dailyinterlake.com.