Will slumping Canadian economy keep snowbirds away from Florida this winter?

Economists worry that a troubled Canadian economy and strong U.S. dollar will keep tourists away from Florida this winter.
Evie Barber, left, of Minnesota and Grace Yaremko of Canada wait their turn at shuffleboard in Pass-a-Grille in 2014. Liberte Management Group of Pinellas Islands, which manages vacation rental properties, says Canadians booked about 26 percent of its winter rentals last year. LARA CERRI   |   Times
Evie Barber, left, of Minnesota and Grace Yaremko of Canada wait their turn at shuffleboard in Pass-a-Grille in 2014. Liberte Management Group of Pinellas Islands, which manages vacation rental properties, says Canadians booked about 26 percent of its winter rentals last year.LARA CERRI | Times
Published September 11 2015
Updated September 11 2015

The Florida tourism industry has an affectionate relationship with Canadian snowbirds. The retirees from Canada who flock here for the winter months have helped build a year-round, bustling tourism season.

But some economists worry that the usual influx of Canadians — who own property here, spend weeks in seaside vacation rentals and camp out in RVs across the state — may rethink their travel plans this year as their economy slumps and the U.S. dollar remains strong.

"What very well could dampen Canadian visitation this winter is how their economy contracted during the first six months of this year," said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida. "The good thing is it's still cold and snowy up there, which could still drive people here. But they face some significant headwinds for their economy."

Canada is having a rough year. The country's unemployment rate was 7 percent in August, continuing a spiral that's steadily grown for more than six months. Canada is facing an impending housing bubble. The loonie, or the Canadian dollar, is currently worth about 76 cents when compared with the U.S. dollar, which is about the highest rate of depreciation for Canadians since 2009.

"The Canadian dollar depreciation means they're paying more for every hotel rate or theme park ticket. That's a big jump in prices for Canadians who are already facing a weak economy," Snaith said.

On top of that, while low gas prices are great for many Americans, it has also caused Canada's fuel-dependent economy to sputter.

After two quarters of what some economists are calling a real recession, tourism boosters are preparing for what that could mean for Florida's busy winter tourism season.

"When we have room rates that are going up in price and the value of their currency is dropping, that could definitely be a double whammy," said David Downing, executive director of Visit St. Pete-Clearwater, Pinellas County's tourism marketing agency. "The last time we saw a fluctuation like this was in 2009, but it wasn't as pronounced because the U.S. wasn't doing so well, either."

Canadians made up 20 percent of all international travelers who visited Tampa in 2014 and are Tampa's largest international demographic, said Patrick Harrison, vice president of marketing and communications for Visit Tampa Bay, Hillsborough County's tourism arm.

Harrison's concerns were more muted.

"We tend to see more affluent travelers from Canada than the middle-class traveler, so they are less affected by these fluctuations," Harrison said. "But they do tend to be frugal travelers overall, so it's definitely something we're keeping an eye on."

Flights to St. Pete-Clearwater International Airport from cities like Toronto, Halifax and Ottawa on Sunwing Airlines were up 22 percent this year over 2014, according to data from the Pinellas County airport. The seasonal flights to and from Canada resume in November, but airport officials did not have predictions for the next season.

There's been a lot of noise around the state of the economy, said Evan Rachkovsky, director of research and communications of the Canadian Snowbird Association based in Toronto, but his association hasn't seen much to suggest the worst.

"We're resilient travelers. We don't just spend just a week in Florida," Rachkovsky said. Many own property in the state, buy cars and keep them here, and have bank accounts set up here, he said. "Rather than being driven by just economic factors, the snowbird market is dependent on lifestyle choices. Despite the slumping loonie, we will continue to travel to the Sunbelt," Rachkovsky said.

Dennis DiTinno, whose company manages seven vacation rental properties from Belleair to Pass-a-Grille, isn't worried, either. Last year, about 26 percent of his winter rentals were booked by Canadians, he said.

"The currency exchange value will affect less than 1 percent of the travelers who have made vacation plans to come here," said DiTinno, who owns and operates the Liberte Management Group of Pinellas Islands. "We still expect our usual entourage from Canada to come down and are projected to finish the year strong and think 2016 to be even better."

DiTinno said his company may increase marketing in Canada and add some incentives to drive previous renters to return.

"But I think we'll be so busy this winter that we won't be able to keep up with the demand."

Visit St. Pete-Clearwater will continue to market to Canadians as planned, but will watch the situation closely, Downing said. "When in crisis, the first thing to go for Americans is a vacation. But for Canadians and Europeans, they still travel but might not spend as much when the euro or pound is in decline," Downing said.

Contact Justine Griffin at jgriffin@tampabay.com or (727) 893-8467. Follow @SunBizGriffin.

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