Slumping Canadian dollar means big loss for Haines, Skagway

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The Canadian dollar continues to hover around $0.72 U.S. That means locals in Haines and Skagway might not see as many Yukon license plates this summer. With the lagging loonie comes the loss of Canadian business for local shops and tour operators, who are now trying to figure out how to cope.

The Canadian dollar has been in a steady decline for years. It reached its lowest point in more than a dozen years last month, and, depending who you ask, it’s going to worse before it gets better. Haines and Skagway are already feeling the effects of our friendly neighbor’s slumping dollar, and the summer tourist season is still months away.

Mountain Market in Haines has been serving Canadian guests for 25 years. Owner Mary Jean Sebens says the business from Yukoners is a large part of the market’s income.

“I guess I would say that we didn’t have a bad year last year, we had a good year, but if the Canadian dollar had been stronger, we would have had that much more of a good year,” she says.

Sebens says she thinks the big holiday weekends, and events like the Chilkat Kluane International Bike Relay and BeerFest, will still lure Canadians, but when the dollar was stronger, Haines and Skagway saw an influx of visitors almost every weekend, all year long.

“We were seeing a lot of Canadians almost every weekend just a few years ago, so, yeah, I think it’s a concern for Haines.”

Places like Mountain Market, that sells food and groceries might have a slight advantage as the dollar threatens to bottom out at around 60 cents. People need to eat, after all. And so, elective activities like tours might feel the pinch even more.

“It’s going to be noticed a lot in Haines and Skagway this summer, the downturn in them visiting,” says Alison Jacobson, the CEO of Alaska Fjordlines. The tour business offers scenic boat rides between Juneau, Haines and Skagway and has been on the water for 25 years. It’s one of many tour businesses and shops in the Upper Lynn Canal that relies heavily on summer Canucks. Jacobson says she’s still considering the business’ tradition of taking Canadian money at par during the slower times of the season.

“But we probably won’t do it for as long because it’s really hard for us to take that hit. I think it’s still possible for us to get those folks in Haines and Skagway if we run some specials.”

Jacobson says her bookings are filling up at a good rate, though there are noticeably fewer Canadian customers.

Haines Borough Tourism Director Leslie Ross says a lot of people here take the Canadian contingent for granted. That is, until they stop coming.

“With the cruise ships, we kind of know those numbers and we can anticipate what’s going to happen. With the Yukon tourism, we kind of just expect it to be there,” Ross says. “It is something that people are watching now. Just the few businesses that I’ve spoken to, they’ve seen a significant loss already.”

Last week, the Tourism Industry Association of the Yukon canceled its annual convention slated to be held in Haines. That event lasts a few days and brings in around 150 visitors in April, typically a slower month. Ross says it’s a huge disappointment.

“We won the bid this year for hosting and just in the last two weeks, they’ve called and canceled that. Mainly due to the low Canadian dollar and a push for them to spend locally, which is very understandable.”

Blake Rogers is the director of the association in Whitehorse. He says they just couldn’t take the risk of the dollar sinking even lower. Now, he says, Canadians are being encouraged to stick closer to home.

“Canadian destinations are seeing a bit more of an opportunity to try and encourage more Canadians to do domestic travel and visit places in Canada that they may not have visited before, but also opportunities to try and encourage Americans to come to Canada,” Rogers says.

Rogers says despite having to cancel the event in April, he’s looking forward to continuing the symbiotic relationship with both Haines and Skagway.

“It was disappointing for all of us, but we haven’t seen the last of Haines, let’s just say that. We will come in full force in the years to come.”

Haines tourism director Ross says she’s hearing from tour operators that bookings are down overall while Canadians wait to see if the dollar will rebound. The weak dollar is attributed to several factors including plummeting oil prices. But, Ross says it’s not all bad news. Low fuel prices are likely to bring in more Alaskans on road trips, and more RV travelers from the Lower 48. Fjordlines’ Jacobson also tries to look on the bright side. She says offering cash at par or other discounts will solidify the strong relationship between Haines, Skagway and Whitehorse.

“I know that it will be so popular that the word will spread fast up in Whitehorse if you can offer any kind of a special rate,” Jacobson says.

There is no way to predict exactly what the Canadian dollar will do next, but according to the long term outlook from the National Bank of Canada, it’s supposed to hold steady before slowly creeping up in the fall. However, a forecaster at the global investment bank Macquarie told the CBC last month he expects the loonie to reach an all-time low of 59 cents by the end of the year. For now, Ross says, all we can do is wait it out.