After enjoying exchange rates near or above par for the past decade, travelling golfers of Canada are suddenly faced with as much as a 30 per cent depreciation in their buying power when they head to the U.S. The decline is so swift that the real effects aren’t seen yet in many favourite American golf destinations.
“We’ve not experienced diminished Canadian visitors thus far, but we’ll continue to monitor things as they develop and plan accordingly,” said Sue Kanoho, Kauai Visitors Bureau executive director, home to many acclaimed golf courses, including Poipu Bay, Kauai Lagoons, Wailua, Puakea and Makai. The reckoning is coming.
First, the good news. The dollar drop is positive for domestic operators, says Gord Schultz, President at Golf Canada’s West Ltd. “We’re on sale 25 per cent off and we haven’t done a thing to create it,” says Schultz, whose group includes the famed Fairmont Banff Springs, Fairmont Jasper and three excellent Canmore courses. “If history is any indication, this should have significant impact on our traditional markets in the U.S. Southwest and Pacific Northwest.”
Research agrees with Schultz. A 2014 study released by the Conference Board of Canada predicting overnight visits in Canada says they will increase by 2.7 per cent in 2015. “The dollar is down against most major currencies,” Schultz adds. “Golfers in this country are acutely aware of the differences; our research shows they often make their decisions based on how much their dollar will buy, so it’s good news for Canadian operators like us.”
For American golf travel operators who depend on them, any decline in Canadian visitors is serious. While precise numbers are hard to obtain, Canadian golf trips to the U.S. number in the many tens of thousands annually. Many recall that, were it not for Canadian travellers- particularly from western Canada- resorts would have gone out of business during the punishing 2007-08 recession years.
“If it wasn’t for visitors from Alberta and Saskatchewan in those days, the lights might have gone out here,” says David Havens, Director of Golf at Ka’anapali resorts in Maui. “They saved us in those years.”
Some Canadians already pre-booked for the 2015 winter season at a better rate or hedged against a drop in the dollar, so American destinations are still seeing strong Canadian numbers. Myrtle Beach, South Carolina, which sees tens of thousands of Canadians each winter, reports no immediate impact.
“We haven’t seen a decrease in our steady stream of Canadian golfers coming down to escape the cold and play our three courses here in Myrtle Beach,” says Claude Pardue, President and CEO of Mystical Golf. “Even with the recent decline of the Canadian dollar, we think our stay-and-play packages will still offer great value for golf vacations anywhere in North America.”
Hawaii is a mecca for Canadians, particularly from western Canada. Sue Kanoho says they’re in wait-and-see mode. “We’re aware of the [Canadian] exchange rate, as we are for all exchange rates for countries from where we receive a significant number of visitors.”
Mississippi, home to more than 140 golf courses, has six of its casino courses listed among the top 50 in the country by Golfweek magazine.
“The decline of the Canadian dollar, after oil’s collapse, is certainly a subject of concern and empathy for our friends up North,” said Visit Mississippi Golf and Sports Program Manager Janet Leach. “However, our golf resorts and courses are not reporting a decline thus far, which would be of great relevance given the large number of Canadian golfers and snowbirds who visit us each year.”
In the past golf operators in border U. S. states that receive day trips have offered at-par packages for Canadians. It’s too early yet to know if they’ll do so again, but Gord Schutlz thinks “they’ll need to compete at the risk of Canadians simply staying home.”
The dollar drop is also affecting other aspects of the industry. For instance, golf ball reseller Knetgolf, which sources all its used balls in the U.S. for distribution in Canada, was faced with raising prices for Canadian customers or establishing a U.S.- only price. It chose the latter. Canadian credit cards will be charged in USD and the exchange rate will be determined at your bank. Knetgolf said in a letter to customers: “We regret having to do this, however we live in a world marketplace and we must adapt to the economic winds of change.”
Here’s suggesting that they won’t be the only ones in the golf biz dealing with the currency changes.
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This article was originally published in the April 2015 edition of Golf Canada Magazine. To view the full magazine, click the image to the left.