Valley First

Silver Lining of a Sagging Loonie

Hospitality, tourism sectors await the silver lining of a sagging loonie

June 29, 2015

PENTICTON, B.C. — While south-of-the-border shoppers cool down in the face of the sub-par exchange rate, Thom Killingsworth is waiting for business to heat up for the Okanagan’s tourism and hospitality industries this summer.

Killingsworth, the general manager of Kelowna’s Sheraton Four Points, has had to stick-handle through some tight times in recent years, as a high Canadian dollar kept tourists away from Canada and his hotel.

“We get a good deal of business from the U.S., Europe and Asia, and the strong dollar over the last several years was a significant challenge,” he says. “We certainly lost a massive amount of business from the U.S.”

The decline in guests turned in to a cycle of shrinking margins and cutting rates.

“It was straight-ahead supply and demand,” says Killingsworth. “We had to drop our rates because less demand meant greater availability and competition around the region.”

Killingsworth, who was recently named GM of the year by Sheraton Canada, wants to see business return to the level of the early 2000s. On the back of a dollar below parity with the U.S. greenback, tourism and hospitality enjoyed a post-Y2K boon.

“The low loonie is always good for those of us in the hospitality industry,” says Killingsworth. “Tourists come in droves and a lot of Canadians stay and play locally, boosting local business and economies. Local economies take a bit of a hit with a strong dollar, because those who do come to Canada spend a lot less.”

Michael Flynn, a senior commercial account manager at First West Credit Union’s Valley First division, is expecting local businesses to get a much-needed boost from residents on staycation this summer.

“Tourism is a primary industry in the Okanagan, so a weaker dollar has a positive influence,” he says. “It not only attracts dollars from outside Canada, but dollars from Canadians staying at home. That’s a win-win for local businesses.”

Killingsworth has seen a bit of a lift in recent months as the dollar continues to flirt with the high 70-cent range, but says it’s too early to tell whether business is poised for a return to heady days.

“Obviously we’re a business that’s affected by seasons and we’re going into summer when business normally picks up,” says Killingsworth. “But historically we’ve always had strong traffic from the U.S. with a difference of 15 cents or more between the dollars.”

About Valley First

Valley First is a premier provider of banking, investment and insurance services for residents and businesses in the Okanagan, Similkameen and Thompson valleys. As a division of First West Credit Union, B.C.'s third-largest credit union with 54 branches and 38 insurance offices throughout the province, Valley First brings innovative products, an extensive branch network and local decision making to the banking experience. For more information on Valley First, visit www.valleyfirst.com.

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