One of Canada's major discount travel operators says prices for hotel packages will rise as early as Saturday to counter the impact of the slumping Canadian dollar.

"Sunquest will be increasing prices next week due to the drop in the Canadian dollar," Sunquest said in a statement on its website Thursday.

Only hotel packages will be affected, not flights, the company said.

"It's a commercial decision made to protect margins," spokesperson Kerry Sharpe said. "The price increase only affects the hotel side of the package."

In contrast to flights, Sunquest says most of the revenues on the hotel side of its business — which focuses on the U.S., Caribbean and Costa Rica — are priced in U.S. dollars. So the company feels the hit when the loonie doesn't go as far.

CANADA DOLLAR

The loonie has trended lower in recent weeks and is now worth almost 8 per cent less than the U.S. dollar. ( Patrick Doyle/Bloomberg )

After spending much of the last four years roughly at par with the U.S. dollar, the Canadian dollar has been trending lower for several months. It slipped as low as 92 cents US on Wednesday, its lowest level since late 2009.

The company says price increases for hotel packages will vary depending on the hotel.

"The higher end hotels will see a greater increase than the less expensive ones," Sharpe said.