A 20-per cent drop in the loonie’s value in the past two years has already helped domestic restaurants, hotels and retailers by keeping more of us locals confined within the country.
Now the loonie’s plunge appears poised to bring back something else: The American tourist.
The number of U.S. visitors hit a four-year high in December, according to Statistics Canada (the latest data available), with the number of U.S. travellers rising by 4.7 per cent versus December 2013.
That compares to an 8 per cent drop in the number of Canadian travellers heading into the United States.
A decade ago, the number of U.S. visitors to Canada and vice-versa was comparable, or at least in the same ballpark. But as the loonie surged against the greenback during the intervening years, the number of American visitors dropped precipitously.
Numbers have remained low since the Great Recession officially ended in 2009.
Start of something?
But Americans could finally be ready to venture north again, experts say. To start, one U.S. dollar now gets you $1.25 in Canada, as of Monday.
On top of the 20 per-cent-plus boost to the American tourist’s purchasing power here, they’re starting to make more. Wage growth is being fanned upward among U.S. workers as the world’s largest economy shows renewed vigour at last.
That’s part of the reason Walmart elected to lift wages for its lowest paid employees last week – the U.S. labour market is on the upswing.
Finally, low gas prices are also encouraging more American motorists to travel longer distances. “We’ll see more Americans on the road,” Sal Guatieri, economist at Bank of Montreal said by phone.
Guatieri quipped that the U.S. tourist has become a “relatively extinct species” in Canada over the past ten years. And he cautioned that one month doesn’t a trend make, and that the December bump shouldn’t necessarily be seen as the start of one.
But the dollar has only weakened since the end of last year, Guatieri noted, and is poised to fall even further.