Interest Rates, Currency Exchange, and Covid. 

Interest Rates, Currency Exchange, and Covid. 

For those of you who take an interest in “useless but important information” (thank you Jimmy Buffet), here is some insight from one of Canada’s top five banks – “Snowbird Travel is Alive and Well”

Snowbird migratory flights south have not been deterred by rising inflation costs, higher interest rates, and higher exchange rates!  

Snowbird travel: interest rates, currency exchange and Covid

Over the last year, the Foreign exchange rate for the US Dollar to the Canadian dollar has gone from 1.28 to 1.36.  Almost an 9% increase in one year.  Add on inflation between the two countries ranging from 6 to 10% and it is easy to see the cost of going south has soared.  Lets not forget Canadians who might have US mortgage loans on US properties.  Having to pay the mtg loan or paying monthly rent in USD is suffocating.  The result is that budgets prepared based on last year’s financial world picture went flying out of the window.

Canadian golfers are having somewhat of a financial jolt.  Golfing is a big time sport for wintering seniors.  Golf communities abound across the southern USA.  Unfortunately, most clubs have mandatory minimum monthly bar and membership fees.  This obligation is year round and subject to all of the financial vagaries of Central Bank decisions.     

Rising interest rates have also caused somewhat of a Canadian/US conundrum for those who have purchased property.  On the one hand with the rising US dollar your property is worth more.  On the other hand the Real Estate market is in the doldrums because of higher borrowing costs.  With the exception of some parts of South Florida, the result has been a decrease in demand for property and the devaluation of property values.  Therefore for those who had the idea of downsizing their current vacation home for something more affordable or just outright selling have had to delay any decision.

Snowbirds though, are very adaptable, have pretty deep pockets and are  employing a number of strategies to fight back.  The main one is the cutting back on restaurants and other non-essential spending.  Happy Hours remain in great demand – it is always 5 o’clock somewhere, and retirees seem to be great Coupon savers.  Shopping trips to Costco and Target for food and beverages are great ways to keep expenses down.  Most seniors are fully vaccinated and have travel medical insurance.  Interestingly, US gas prices have not been a factor.  Gas is drastically less expensive when compared to Canada, regardless of the exchange rate.    

The Bank recently uncovered some other interesting trivia about snowbirds. For example, 89% take only one (lengthy) trip throughout the year.  The United States is the top destination for 56%.  The major Caribbean Islands – Jamaica, The Bahamas etc., make up an additional 23%. 

In descending order – the favourite U.S. spots are: Florida, Georgia, South Carolina, Arizona, Texas, California and Nevada.  It is also suggested a majority of Snowbirds are “Parrot Heads”.  Most drive and/or rent a car when arriving at their destination.  Due to proximity, some BC and Alberta residents head to Hawaii as their winter retreat. 

Remember, should a problem arise call the Snowbird Help Line –  

Regardless of these challenges Canadian Snowbirds and US Snowbirds are travelling, at an all time high.  With the waning of Covid, vaccinations, Medical Travel insurance, and some financial strategies to reduce costs, the Birds are not letting anyone or anything deter them from their quest to head south.  They remain united in the fact that winter snow is meant to be a thing of their past.