October 26 1998


October 26 1998

A southern longing


A sagging dollar complicates plans to escape the Canadian winter


John Pelletier wasn’t too surprised when the loonie began its nosedive last summer: the retiree has been keeping a sharp eye on the Canada-United States exchange rate since he and his wife, Mary, began taking extended winter holidays in Florida nine years ago. During that time, Pelletier, 65, has watched the Canadian dollar gradually lose almost 27 per cent of its value. But it was not until this year, when the dollar slid from 70.09 cents in U.S. funds on Jan. 2 to a low of 63.31 cents on Aug. 27, that he began to reconsider his annual vacation plans. Pelletier is now toying with the idea of selling the modest manufactured home he owns in Bradenton, near Sarasota, and has recently stopped his practice of converting lump sums into U.S. dollars prior to the couple’s annual October departure. Pelletier says it is “ridiculous” that he has been receiving only about $675 U.S. dollars for every $1,000 Canadian exchanged over the last five months. With numbers like that, the Pelletiers are concerned their Florida getaways may be coming to an end. “There is a good possibility that

we could stop going,” he says. “We only have so much to live on.”

Welcome to the chilly winter of 1998-1999. With Canada’s dollar trading at historic lows against its U.S. counterpart, many Canadians are wondering whether they can afford a warm-weather getaway this year. Certainly the weak dollar encouraged many to stay home last winter. According to Statistics Canada, Canadian visits to the United States fell by 14 per cent in the first quarter of this year, and 10.2 per cent in the second quarter, compared with the same periods last year. But Canadians are enthusiastic world travellers and many are finding new ways to escape without breaking the bank. Some travel agencies are offering special deals, such as early-booking discounts, specifically aimed at consumers worried about the dollar. Customers are biting and some companies are even reporting sharp increases in travel to destinations such as the Caribbean. “I almost think travelling is written in our constitution,” says Martha Chapman, spokeswoman for Signature Vacations, Canada’s largest wholesaler of package holidays.

It is unusual, Chapman says, for economic factors to divert Canadians from their passion for travel. ‘When the snow falls, people’s feet start to itch,” she says. “I’ve been through crummy dollars, fuel surcharges, you name it. It’s a national fever.” Mark Simone, managing director of the Torontobased Canadian Snowbird Association, puts it another way: “Most snowbirds will do anything to keep going south—they’re addicted.” Simone says he was expecting the anemic dollar to keep more of the association’s 100,000 members at home this year. But a September survey revealed that only about three to five per cent intend to stay put. Three-quarters have no intention of changing their plans to stay the average of four to six months, 12 per cent are going for shorter periods—and nine percent intend to extend their stay in the United States this year.

Snowbirds, however, are deeply concerned about their finances, Simone says. Their average annual income is only $22,000 to $24,000 and they are, as he tactfully puts it, well known for being “very frugal.” This year they are particularly sensitive to basic costs, such as food, fuel and accommodation. Many are already trying to protect themselves from unexpected price hikes. Early sales of the medical plan endorsed by the association—locked in at last year’s prices—are three times higher than in 1997. And in general, Simone says, U.S. retailers can expect more belt-tightening from the estimated 800,000 snowbirds who visit the United States yearly, including more than 500,000 who choose Florida. Many say that they plan to eat at home more often, travel less within the United States, and limit special activities like golf and theme park visits. Anticipating the slowdown, at least one U.S. business is already offering Canadians a deal. Walt Disney World, near Orlando, is selling its seven-day passes at par for Canadians who purchase the tickets in Canada before Feb. 14,1999.

Others are heading for inland U.S. destinations, which can be cheaper than Florida, with its rising prices. Retired Western Canadians, long-time visitors to areas such as inland California, Arizona and Texas, report seeing more travellers from eastern Canada who are passing up Florida in favor of other states. But snowbirds accustomed to wintering in places that some newcomers might think of as bargains are also finding that their costs are rising. Alexander Scott and his wife, Leone, live in Langley, B.C. during the summer months but are dedicated to their winters in Hemet, Calif.,

about 137 km east of Los Angeles. Scott estimates that his usual cost—about $9,000 for a five-month stay—will increase by about $1,000 this year, but he has no doubts about where he will be. A retired businessman who spent most of his life in Calgary, Scott, 69, is determined to escape the cold. “I’ve worked hard all my life,” he says. ‘What are you going to do, sit here, catch a cold, slip on the ice and perhaps break a bone? Or keep up your lifestyle, even if it costs 10 to 12 per cent more this year?” Scott adds that the cost of living in Hemet is so much cheaper than Canada that, even with the dollar’s slump, his expenses are still relatively low.

Short-term vacationers, on the other hand, are avoiding the United States in much greater numbers, although they do not appear to be giving up their annual dose of sun. Transun, a Toronto-based travel agency, says their sunspot bookings are up by an estimated 20 to 30 per cent, especially for less expensive places like Cuba. And while Toronto bookings of Signature’s package holidays to southern destinations, such as the Dominican Republic and Venezuela, are up by 21 per cent this year, the number of customers heading to warm U.S. destinations is down, partly because of the slowdown in the British Columbia economy. Chapman hesitates to give precise figures for competitive reasons, but says such bookings have fallen by several thousand. Signature sells a total of about 1.1 million trips a year.

Unlike other Canadians with only a few weeks for a holiday, snowbirds are less likely to turn their backs on the United States because of currency fluctuations or economic conditions, Chapman says. They often have close ties, such as real estate—75 per cent of Canadian Snowbird Association members own property in the United States—or wellestablished routines in particular communities that keep them going back in bad times as well as good, she says. “Some people have an enormous comfort level in the U.S.,” she notes. “It’s their backyard.”

John Pelletier could hardly put it better. Although he is considering selling his one-bedroom home—which includes a spacious sunroom— nestled in a park among similar homes owned by other Canadians, it is clear that would be a wrenching decision. His four children and seven grandchildren are always welcome there, he says, and their visits are a special occasion. He and his wife enjoy a community life that is almost impossible to duplicate during Canada’s winters. “If s not like going down a street past a lot of houses,” he explains. “It’s a park setting and people stop much more I often to talk and visit.” It is I for reasons like these, often y having more to do with family I and friends than just winter « tans, that many snowbirds are I scrambling hard to keep their ° migration plans intact. □


Even though some destinations may cost more this year because of the sliding loonie, consultants say travellers who keep their eyes out for specials can significantly cut their costs. Among the suggestions:

Some tour operators are offering a so-called “surcharge guarantee” on package holidays: once the trip has been booked and a deposit paid, the price will not change, regardless of currency fluctuations.

The trend in the travel industry is toward shorter booking times, but travellers who pay for their holidays well in advance can often take advantage of early-booking discounts.

UHL Holidays in Cuba are paid for \ M directly in Canadian dollars— unlike many other Caribbean destinations where the U.S. dollar is the standard. That helps keep prices for a Cuban vacation low.

When travelling in the United States, search out so-called “par specials” offered by merchants willing to treat a Canadian dollar as if it had the same face value as a U.S. dollar.

Always carry Canadian identification, such as a driver’s license or passport; otherwise, it can be difficult to take advantage of specials restricted to Canadians.

vTbiià When travelling to the ■pp* United States, check with local tourism authorities. States popular with Canadians, like Florida, Texas, Arizona and California, often offer special deals. Texas, for instance, is promoting a program this year called “Buckaroo Bucks,” a booklet of discounts offered by more than 100 businesses. Deals include par specials at some major hotels and discounts of up to 50 per cent at restaurants and attractions in 14 cities.