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October 12, 2008

Canadian exchange rate impact strengthens local economy

Regional market feels boom from increased spending

Even in tough financial times, the region's proximity to Canada and a strong Canadian dollar have led to increases in Canadian spending locally.

Joan LaPier, marketing director at Champlain Centre, said the mall tracks Canadian business through traffic counts. Those numbers continue to rise steadily, as they have since 2005. In 2006, the traffic count increased almost 400 percent, followed by a 50 percent increase in 2007 and a 27 percent increase so far this year.

Those numbers are expected to increase dramatically next month, when Target opens Sunday, Oct. 12. That coincides with Canadian Thanksgiving, which is Oct. 13.

Mall staff are taking calls and receiving e-mails every day from Canadians who want to know when the store will open.

"I ran into a (Montreal) woman who was shopping at Christopher Banks," LaPier said. "She told me, You do know all of Canada is aware Target is coming.'"

The proximity to the border can help in uncertain economic times, such as the current financial crisis, she said.

"I think we're in the right place at the right time," LaPier said.

She receives e-mails from Canadian shoppers who say they're coming for the weekend, rather than a day.

"It means they're booking hotels and eating in our restaurants," LaPier said. "It's good for the whole area."

Plattsburgh-North Country Chamber of Commerce Vice President - Marketing Michele Powers said it's a growing trend.

"Canadians have always been day-trippers. It looks like they're coming more often and staying longer," she said.

Car counts at the Champlain border crossing are up about 4 percent, about 80,000 visitors. Bus counts are also up, Powers said, and more of those buses are full.

The chamber continues to market the region and the airport to a Montreal audience, including at the upcoming International Tourism and Travel Show in October, the Montreal Home and Trends Show and Golf Expo Montreal, both in March and the Montreal Outdoor Festival, which will be a first for the chamber.

"I think that will be a great show for us," Powers said.

The chamber's new travel guide will be bi-lingual for the first time. Powers said that is very appreciated by French-Canadians.

She is looking forward to next year, because of the stronger Canadian dollar and the occupancy tax recently approved for Clinton County.

"We now have more money to market to those people and bring them down here," she said.

International Currency Exchange is temporarily located next to the Service Desk at Champlain Centre, in front of the interior entrance to Dick's Sporting Goods.

Co-owner Nadim Dergham said he changes money for both local businesses and individuals.

"Business has increased with most retail stores," he said. "It has also increased with Canadian consumers who exchange money."

International Currency Exchange exchanges Canadian and U.S. dollars and also Euros.

On Sept. 24, its exchange rate for a Canadian dollar was 94 cents U.S. and a U.S. dollar was worth $1.02 Canadian.

He said some former customers are having trouble finding the shop in its new location, after the former location at the corner of Smithfield Boulevard and Route 3 was torn down. The shop will have its own space between D & D Unisex salon and the food court starting Oct. 1

Malone Golf Club General Manager Derek Sprague said the number of Canadian golfers at the club has increased slightly this summer, in spite of high gas prices.

"The price of gas has impacted our business more than the dollar," he said. "The Canadian dollar has helped make it easier for people to come across the border to spend money."

Sprague said the Canadian dollar weakened during the summer, to a low of 93 cents on Aug. 8 and 92 cents on Sept. 11 and Sept. 17. It had risen to almost 97 cents on Sept. 24.

In May, the Canadian dollar was worth more than its U.S. counterpart. It peaked at $1.01 on May 29.

The club gets its exchange rate information from www.x-rates.com.

He said the club's market extends about 75-100 miles across the border, and includes the greater Montreal and Ottawa areas. A round trip from those areas can mean up to $30 in fuel, which has to be factored in when a Canadian golfer decides to play Malone.

The club offers its golf and motel package rates at par to take advantage of that market, Sprague said. It also advertises in both regions, mainly print advertising in the Ottawa area and through whichever local television channel is carrying golf coverage.

Comfort Inn co-owner Terry Meron said the resurgence of Canadian business late in 2006 came after a lengthy tough spell that began in 1991. It carried through the close of Plattsburgh Air Force Base and a severe drop in the Canadian dollar, which dropped below 63 cents at times in 2001 and 2002.

Meron said as a whole, the hotel industry in Plattsburgh operated at break-even or a slight loss. Information from Smith Research, a firm that provides data on hotel occupancy rates and room rates to hotel owners, shows that resurgence.

In the Plattsburgh market, occupancy rates went from 60.9 percent for 2006 to 68.5 percent in 2007 and 73.3 percent through August in 2008. The latter figure is likely to drop by the end of the year, as September and October are usually strong only during leaf-peeper season and November and December are traditionally the slowest months of the year, he said.

A rating in the low 60s is at the break-even point, while the 2007 and 2008 rate is evidence of a strong market.

"This speaks volumes to how the Canadian market affects us. The (Plattsburgh) market is in the black as a whole," Meron said.

He said the biggest impact is seen on weekends, mainly Saturday nights.

"A larger percentage (of Canadians) come down Saturday morning, stay Saturday night and leave sometime Sunday," he said.

It also has impacted the Perkins restaurant at the Comfort Inn. He didn't have figures, but said the number of customers that speak French or have French accents has increased noticeably.

"Unlike most of the country, we have experienced gains in customer counts," Meron said. "In general, customer counts in the restaurant business have been down across the country."

Liquor and Wine Warehouse owner Steve Carpenter said Canadian sales were strong this summer.

"We had an 80 percent increase in Canadian business over the summer," he said. "This last summer was right off the books."

The two main reasons were the strength of the Canadian dollar and high gas prices, Carpenter said. The latter possibly had more people staying closer to home, which makes Plattsburgh an attractive short-travel destination from Montreal.

French wine sales are up about 300 percent, Carpenter said, possibly because Quebec residents are loyal to their heritage.

Things have now slowed, as marinas and campgrounds close with the end of summer.

"The (Canadian) currency coming in has dropped drastically," he said.

Carpenter said it will be interesting to see the effect of the new Target store and how many Canadians come down for holiday shopping.

"Will they come across?" he asked.

The store took Canadian money at par when the two currencies were level and even when it was 3 or 4 cents on the dollar. It is now charging 10 percent because its bank is charging 9.8 percent.

Carpenter said 10 percent is just too much to cover with the store's mark-up on liquor. If Liquor and Wine Warehouse continued to take Canadian at par, he also runs the risk of offending local customers.

He has noticed a trend toward more family visits, which used to happen 15-20 years ago. Carpenter said other business owners share his experience.

"In talking with other business owners, they told me they (Canadians) saved our summer, by far," he said.

dheath@pressrepublican.com

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