Now, a Dollar (Canadian) Is Really Worth a Dollar (U.S.)
By PATRICK McGEEHAN
Published: October 1, 2007
New Yorkers, like most Americans, pay precious little attention to what happens in Canada, that large, sparsely populated region with the chronically inferior currency.
Check that last part. Now that the Canadian dollar, known as the loonie, has flapped its way to parity with the American dollar (formerly known as the almighty), Canada suddenly looks like a proud nation of 33 million people whose cross-border purchasing power has grown by more than half in five years.
Tourism officials in New York have taken notice. They acknowledge that they took Canadian visitors for granted in the past, but now they are drawing up plans to lure more of them to the state and New York City.
The state is running ads in Toronto newspapers and on Canadian Web sites, inviting Canadians to spend fall weekends in northern and western New York. The cityâ€™s tourism agency, NYC & Company, is rushing to open an office in Toronto, which would be its first in Canada. â€œThis seems like sort of a psychological opportunity,â€ said George A. Fertitta, the chief executive of NYC & Company, referring to the parity of the two currencies.
The Canadian dollar, nicknamed for the image of a loon that it bears, passed its American counterpart on Friday, when it hit a new 31-year high of almost $1.01. In early 2002, it was worth about 62 cents.
Back then, the flow of visitors from Canada to New York City was in a post-9/11 swoon. The number of visitors dropped to 693,000 in 2003, from 920,000 in 2000, a decline of almost 25 percent. By last year, it had rebounded to 840,000, making Canada the No. 2 foreign source of visitors, behind Britain, according to NYC & Company.
Now, with Canadians brandishing their reinvigorated loonies, tourism officials have stopped ignoring them and started encouraging them to join the parade of bargain-hunting foreigners flooding into New York. When it comes to shopping, little prodding seems to be required.
â€œFriends will be coming to town and theyâ€™ll say, â€˜We need one day to shop,â€™â€ said Jeff Breithaupt, an Ontario native who coordinates cultural activities for the Canadian Consulate in Manhattan and is an editor of a newsletter titled The Upper North Side. For Canadians, said Mr. Breithaupt, the advent of parity between the currencies has become both a point of pride and a spur to travel. His own parents had been â€œon the fenceâ€ about a trip to the city later this year, he said, but they told him last week that they would come, citing the exchange rate as a deciding factor.
Mr. Breithaupt, who also organizes a series of concerts by Canadian musicians at Joeâ€™s Pub in Greenwich Village, said he expected more Canadians to venture south next month to hear the Tragically Hip, a rock band that sells out arenas in Canada, perform in the more intimate venue of the Grand Ballroom in Manhattan and other clubs around New York.
The shopping and spending habits of Canadians are not markedly different from those of American tourists, Mr. Fertitta said. He estimated that the typical Canadian visitor might spend slightly more than the $370 the typical American visitor spends in the city, but far less than the estimated $1,400 that the typical visitor from overseas spends. That gap explains why the city has focused its 2007 tourism promotion on Europe, including ads portraying New York as a bargain for foreigners, he said.
But officials at the Empire State Development Corporation, a state agency that promotes business, decided to strike while the loonie is hot. They spent about $1 million on ads aimed at the potential visitors in the Toronto area this summer and plan to spend an equal amount trying to attract them this fall, said Thomas Ranese, chief marketing officer for the agency.
â€œI think Canadaâ€™s a significant market for us that New York State has never fully optimized,â€ Mr. Ranese said Thursday, speaking by phone from Chautauqua, near Lake Erie. He said he had just left a resort, Peekâ€™n Peak, about 90 miles southwest of Buffalo, where he said about half of the cars in the parking lot bore Ontario license plates.
Mr. Ranese said incoming traffic from Canada had risen in recent weeks, much of it headed for shopping malls. The trick, he said, would be to convert more of those day-trippers, like Mike and Jennifer Fields of Hamilton, Ontario, into overnight guests.
The Fieldses, who were bound yesterday afternoon for a duty-free store on the American side of Rainbow Bridge near Niagara Falls, said they were lured by the Canadian dollarâ€™s achieving parity, combined with the local sales-tax rate of 8 percent, compared with 14 percent in Ontario.
â€œItâ€™s so cheap over here,â€ Ms. Fields said. â€œThis is the first time Iâ€™ve come over in a long time â€” more than 10 years.â€
For those who stay overnight, there is an added bonus: They can bring back $400 in purchases without paying duty at the border, as opposed to $50 for day-trippers.
Joseph Sanelli, the general manager of the Four Points by Sheraton hotel near Niagara Falls State Park, said he was not sure the tax savings would motivate visitors to stay longer, but the exchange rate shift had provided a late-summer boost. Occupancy was 92 percent in the past month, up from 72 percent in September 2006, he said. â€œUsually after Labor Day, you can just about lock the doors,â€ he said.
For Canadian visitors, the cold shower on their newfound pride comes on the way out. At the border bridges operated by the Niagara Falls Bridge Commission, the fare can be paid with $3 American or $3.50 Canadian â€” a far cry from parity.
Drivers are complaining to toll takers, â€œGee, our dollars are about at par, why is the toll so different?â€ said Tom Garlock, the commissionâ€™s general manager.
Lately, he said, more of them have been holding on to their loonies and paying in United States currency. The commission, which raised the toll last spring from $2.50 American (the Canadian rate did not change), is considering another adjustment to account for the exchange-rate shift, Mr. Garlock said, but first it wants more evidence that parity is here to stay.
David Staba contributed reporting.