OLD ORCHARD BEACH, Maine — In the beachside town where nearly every hotel flies the Maple Leaf, people aren’t worried the flagging loonie will put a major dent in tourist traffic this year.
Hotels, business owners and Canadian tourists told the Bangor Daily News Monday they weren’t worried about the Canadian dollar, or “loonie,” affecting tourism at its current level of 92 cents on the U.S. dollar. Economists expect the Canadian dollar to continue declining in value this summer, from 99 cents U.S. one year ago in May and one cent ahead of the U.S. dollar two years ago, however. It’s a number Dan Donovan, co-owner of Friendship Oceanfront Suites on Grand Avenue, keeps an eye on.
“I thought about doing Canadian money on par [with the U.S. dollar],” Donovan said. “Canadian money at par is a good one to throw out: You put it on the marquee, and you get more walk-in traffic like that.”
But until the loonie gets much lower, that measure is on hold. Donovan said his summer bookings — mostly from Canadian tourists — are ahead of last year, but some are planning shorter stays.
“Canadians will still come. But instead of coming for a week, they’ll come for five days,” he said, noting the trend simply requires more bookings, which so far hasn’t been a challenge.
Last weekend, he said, his 78-room hotel was almost entirely booked by Canadian tourists celebrating the long Victoria Day weekend. Tourism from Canada picks up for the summer in mid-July, he said.
Elizabeth Ward, a Quebec City resident at the pier-side Myst restaurant Monday echoed Donovan’s sentiment that a 10-cent exchange rate isn’t a major deterrent, particularly for regular yearly visitors.
“My parents came here and my grandparents before them and my grandchildren are coming here, so we have many generations,” Ward said, adding her trip next July is already on the books.
And when compared with other vacation destinations, Steve Collette, who operates beach parking for George’s Parking, said Old Orchard has other things going for it.
“[Canadian tourists] flock here because this has always been a blue collar, honky-tonk town, and it always will be,” Collette said. “It’s not very expensive, and they love the beach.”
Since last May, the loonie has lost value against the greenback, and it’s forecasted to continue a decline to as low as 85 cents U.S. this summer, according to economists at the Toronto-based TD Bank.
At 80 cents or lower, Donovan said there would likely be vacancies along the beach, but he’s not alarmed about the current eight-cent difference.
“That’s not going to affect business,” he said.
Donovan and his brother bought the business from their parents in 2000, a period when the Canadian dollar was 70 cents U.S. or lower.
James Marple, a senior economist at TD Bank, based in Canada, said the next major shift in the exchange rate between the countries will come with second-quarter job performance figures, due out June 6. In general, he said the bank projects the U.S. economy will outpace Canada’s in the second quarter, partly due to a U.S. housing market he said has more room for growth. That stands to drive the loonie down further.
“A higher U.S. dollar and lower Canadian dollar, I would think, would be a bit of a headwind for retailers on the U.S. side of the border,” Marple said.
Paul Golder, vice president of operations at beachside amusement park Palace Playland, said he doesn’t think the exchange rate hitting those levels will affect visitors, but he suspects it could result in a slight drop in spending.
While the exchange rate is something retailers, hoteliers and summer visitors have their eyes on, all said on the drizzly Monday afternoon the weather is a more powerful force.
“It’s all about the weather,” Shay Dichter, an employee at the clothing shop Zanzibar Seaside, said. “This is the beach life. No sun, no fun, right?”