As USD/CAD approach parity, Canadian travel to the U.S. is swelling
July 18th, 2007 by Helen Sarkanova
The number of Canadian tourists visiting the United States is increasing as the Canadian dollar approaches parity with the U.S. dollar. Strong currency has encouraged Canadians to travel to the States already last summer when the loonie, as Canada’s currency is called after the loon in the back of the dollar coin, reached its 28-year high against the US dollar. But while the loonie was worth 90 U.S. cents back then, the deal is even better for Canadians now. Currently, the loonie is being traded for 95 U.S. cents. Considering that a Canadian traveler would receive no more than some 62 U.S. cents for one Canadian dollar five years ago, this is a dramatic change. As a result, Canadian travel to the USA has increased by 23 percent within the past five years. Reportedly, some Canadian banks even had to dip into their reserves after running out of the green bills as more and more Canadians exchange their loonies for their trips south across the boarder.
New York, Florida and Washington are among the U.S. destinations that attract Canadian visitors the most. Another popular vacation spot is Old Orchard in Maine, which offers 7 miles of a sandy beach and is just a few hours of driving away from Quebec. And with gas being roughly one dollar cheaper in the United States than in Canada, those few hours behind the wheel are well worth it. Not even lengthy wait times at boarder crossings or chilly waters of the North Atlantic can discourage Canadians from enjoying an affordable vacation.
In accordance with the overall trend, the number of overnight trips from Canada to the U.S. has also been rising. Analysts conclude that strong currency has apparently helped Canadians to overcome concerns over the war in Iraq and the SARS scare that was haunting Canadian travelers three years ago.
According to currency strategists, the trend of the Canadian dollar approaching parity with its U.S. counterpart is likely to continue for a number of years. If the future is to prove the prognosis correct, we can expect Canadian travel to the United States to rise further.
