Loonie's plunge killing Canadian discounts at popular resorts
Loonie sinks below 69-cents US, its lowest point in 13 years
The rapidly plummeting value of the Canadian dollar has some U.S. resorts and restaurants rethinking long-standing discounts to their northern neighbours.
Because the volatile loonie often falls below the American greenback, businesses sometimes accept the Canadian cash on par with the U.S. dollar.
Some restaurants in Detroit, Mich. are staying the course with the promotions, but a few popular resorts have had to rethink their deals now that the loonie's value fell below 69-cents US last week.
"We've really prided ourselves in taking the Canadian dollar at par to the American dollar—resort wide," said Jorge Garcia, guest services manager for Jay Peak ski resort in northern Vermont.
For the past 40 years, die-hard Canadian skiers have been able to use their own currency when staying at the lodge, located just south of the international border, without getting gouged by exchange rates.
But accepting Canadian cash at face value for everything from lodging, dining and retail has become too expensive. After four decades, the special promotion is ending.
Guests can still use Canadian money for lodgings when they arrive, but only half the bill will be treated on par with U.S. dollars.
'Not a good business decision'
Other resort owners are making similar changes. Zehnders Splash Village in Frankenmuth, Mich. was one of the resorts that used to treat Canadian cash on par with the U.S. dollar.
Last week, though, CEO Al Zehnder pulled the plug on the promotion.
"It's just not a good business decision for us to discount [that much] on every dollar," he said. "The widening gap between the U.S dollar and the Canadian dollar has really forced us to do that."
These types of discounts go a long way to keep loyal Canadian customers happy when the dollar dips slightly, but eventually it stops making good business sense, Zehnder explained.
"Once it gets north of about 25 per cent we start to look at it really hard," he said.
In an effort to still attract the Canadian customers, Zehnders will now treat the first $100 Cdn as U.S. currency each day. After that, the exchange rate will kick in.
Restaurants staying loyal
Two Mexican restaurants in Detroit have been discounting their menu prices for Canadian visitors for years. Though they plan to continue, they both say they will rethink the promotion if the value of the loonie continues its slide as many analysts predict.
Mexican Village Restaurant accepts Canadian cash at par Monday through Thursday every week.
"We want to continue having their business and showing them that we do appreciate that they were coming to our restaurant even back when the Canadian money was worth more," said Angela Ramos, administrative assistant at the restaurant near downtown Detroit.
If the dollar continues to drop, the restaurant may have to reduce the discount to just a day or two a week, according to owner Connie Bacigalupo.
"We would probably cut the days if we couldn't afford it, but I'd really like to keep them," she said.
"The main point for us is to keep our customers coming back because they have been here for many years."
A similar deal on food will continue a bit further west at Mexican Town Restaurant.
Owner Colleen Dimattia accepts the Canadian dollar at par every Monday and Friday. The rest of the week, she offers a set exchange rate of 80 cents to the dollar.
"It hurts a little bit, but I'm sure it's the same with the Canadians when they come over to use their dollar," she said. "But we ride it out with you guys. Canadians are our customer base and they're loyal to us and we're loyal to them."
While many owners are whittling down their discounts to Canucks, one hotel owner in Maine is just getting started.
Gary Grossman recently announced a similar promotion at his Long Beach Motor Inn. Starting in April, as long as Canadians show up with U.S. currency, he'll discount the guests at whatever rate makes up for the exchange on that particular day.
"It's my way to say thanks," he told CBC News. "At the same time, instead of having an empty hotel room, we may have someone from Canada. It's an opportunity to get something instead of nothing."
Grossman has empathy for the northern visitors because he's a Canadian himself. He and his mother moved from Quebec to Maine and started the business 30 years ago.
"Canadian tourists have supported us year after year after year," Grossman said. "I'm taking this opportunity in 2016 to give back and say thank you for all the years you've supported our area's communities."