Eichhorst Says Canadian Cruise Sales Strong Despite Dollar
The rise of the U.S. dollar in concert with the fall of the Canadian dollar was cited as a factor in late 2015 and early 2016 for lowered cruise business from the Canadian market.
A year later, the U.S. dollar remains strong -- its ratio to the Canadian dollar hasn't changed substantially since the end of Wave Season 2016 -- but Canadian cruise bookings, like those in the U.S., are strong year to date.
Because about 2/3 of Vancouver-based Expedia CruiseShipCenter's stores are in Canada, Cruise Week asked President Matthew Eichhorst for perspective.
"Canadians look for stability in the dollar," he said. "They don't mind that the [Canadian] dollar isn't on par with the U.S dollar, but they don't like it moving, especially if it is falling."
Back in January 2016, he recalls that Canadians had to deal with a 70-cent dollar: "It stabilized at the end of March 2016 in the mid-70s and we've been at 75 cents for about a year." That stability, he said, is really good for cruise business: "Now the Canadians know what they're going to get for their dollar."
That's in contrast to bookings back when the Canadian dollar was falling. "All of a sudden you could find yourself buying a cruise that cost more than before, especially with companies who didn't sell in Canadian dollars," said Eichhorst. "So that was difficult. But with the stability, people don't cancel."
After the U.S. elections, there had been talk about the U.S. dollar becoming less strong, and while the Euro is now at a five-month high against the dollar following this week's French presidential election, the CAD/USD ratio hasn't changed substantially.
This week it dropped off due to a trade dispute, but still finished at 74 cents at day’s end Tuesday. "I think we'll bounce around in the 70s for the next year," predicted Eichhorst.
He also said the strong U.S. dollar combined with a stable economy is making it a good time for ship orders for U.S. brands, pointing to the recent example of Viking Ocean ordering yet two more ships.
Eichhorst's comments come as business signs continue reasonably well, on the heels of a solid first quarter/Wave Season. "March was off the charts," he noted. "But it was a bit of a fake success. Last year we had Easter in March."
This year Easter fell in April. "I would say a portion of our success in March is because those comps included Easter. We're going to take it on the chin a little bit in the first couple of weeks of April with Easter. We're still at nice growth, but it's nothing like March."
Europe sales year over year, he says, continue strong: "It has been fantastic since last July," despite recent geopolitical incidents in Stockholm, St. Petersburg, and Paris.
However, overall business trends continue strong. "After 2016 the whole industry deserves a good year," he remarked. "Short of somebody making poor decisions geopolitically, I think we'll have nice steady economic growth in 2017."