Talked to an outfitter about a bighorn hunt. $30k worth of bighorn hunt. Then it hit me - what's the exchange rate?
I figured that if I gave $25k for the hunt that would equal $30k in Canadian $$.
If I gave $30k for it, it would be like $35k b/c I'd be paying American money.

Now I haven't seen big dropoffs on what outfitters are charging. Many seem to be staying where they were last year. But last year the exchange rate was almost even.

So by paying the same American money as last year the outfitters would essentially be getting a raise.

Am I reading this wrong? Comments?

Let me also state for the record, I love Canada. Beautiful country, great people. My post isn't meant to be a dig on Canada. More on the fundamentals of economics.

Nope, not getting a raise, just getting a fair wage again. Most outfitters have their current rates based on the exchange being similar to what we have right now. A lot of them have been really hurting the last couple of years when the rate was at par or even higher. I know as a guide, I was used to making 20-25% extra when I changed my US tips at the end of the season. Last year I lost money on the exchange, only 94 cents Canadian for every US dollar. Makes a big lifestyle change when your income drops 30% in a year!!!!

Bushman,
You just made my point. Everyone is showing up this year with less money. But because of the exchange rate, the outfitters who are charging the same as last year can effectively add an add'l 20+% when they sell a hunt to an American who uses dollars.

Bluefin,
Your missing the point that the year before 08 the exchange rate was what it is today. So last year they took a 30% hit and are now getting back to 07 levels not including inflation.

Bluefin

Most outfitters in Canada quote their rates in US dollars. This is because 97% of their business is from USA clients./ FS

Even without the drop in the Canadian dollar, the deals were going to be out there this year. I am sure bookings are down across the board but especially in the realm of high end sheep and such. How may sheep hunters are big money guys who are gonna go no matter what the economy is doing? Maybe (BIG MAYBE) half? So that leaves half the slots filled with guys who save for years to go sheep hunting. It's not like this guy who saves up for years is gonna drop 15-20K on his sheep hunt this year if his job is insecure or if he has the option of clearing other debt. It just ain't gonna happen. Ask me how I know.

quote:

Originally posted by tendrams:
Even without the drop in the Canadian dollar, the deals were going to be out there this year. I am sure bookings are down across the board but especially in the realm of high end sheep and such. How may sheep hunters are big money guys who are gonna go no matter what the economy is doing? Maybe (BIG MAYBE) half? So that leaves half the slots filled with guys who save for years to go sheep hunting. It's not like this guy who saves up for years is gonna drop 15-20K on his sheep hunt this year if his job is insecure or if he has the option of clearing other debt. It just ain't gonna happen. Ask me how I know.

How do you know?

When the exchange rate was at parity with the US $20K US gave the outfitter $20K CAD. At today's exchange rates the $20K US gives the outfitter ~$25K CAD. Things are better for the outfitter at today's and earlier exchange rates.

Johnny,

I know because I am one of those guys who saves for a year (or two or three) to go on a good hunt and I am NOT hunting this year unless a REALLY great deal comes along. I have no rational reason to fear this crappy economy (good job security) but that doesn't mean I am not just that little extra bit cautious these days. I think most top end hunt sellers are going to be facing this for a season or so. Some I've talked to were actually facing it a year or more ago interestingly enough and saw this whole economic debacle coming.

The recent exchange rate reversals would definitely help Canadian outfitters except for the fact that what we have recently seen is effectively a return to normalcy. Most have been suffering to avoid raising prices in response to the relatively inflated Canadian dollar for the last few years. Finally, they have some relief in that regard but the cause of that relief was economic circumstance that is going to kick the hell out of demand for luxury goods (like hunts). Most are in a tough spot I think and the only rational response is to reduce costs where at all possible and reduce prices to prop up demand. Lots of outfitters are going to be guiding their own hunters this year I think.

JMHO

For years and years the American buck was worth more than the Canadian buck, so it was a cost savings to come here. Then our buck rose above the Americans and it cost them more for a couple years (only) now that we've sunk back down it's not an increase for the Canadian outfitters, or at least not in the long term sense.

the chef

Couple of years try a few months our dollar was par or above USD. But don't worry I see the US dollar is dropping again.

Calgarycef is right. For a long time the CDN cost US travelers between 90 cents and $1...when they were used to paying .75. That's been a multi-year proposition. As I said, the current situation is a return to normalcy, not a windfall for the outfitter. Further, where do you think a good many outfitters shop for their gear? I know a guide right now struggling to buy a big boat motor he contracted for in August but watched increase in price by 20% before delivery. A strong CDN helps buying fixed capital, but it sure as hell hurts demand for output or effectively increases variable costs. Further, if the US dollar dramatically declines these days, it will be because they have pumped so much money into the system to save the failing economy. That might hurt Canada more than it helps her.

Isn't this a funny world? The US position in the global economy ensures that, the weaker her economy is perceived as being, the more people flock to dollar denominated assets because they know what's bad for the US economy is much worse for everyone else. If that's true, more fiscal and monetary policy from the US almost generates it's own demand for US dollars.

i might be wrong (and i'm sure i'll hear about it if i am) but i can't remember when canadian outfitters on things like sheep big bear or the like quoted in canadian dollars, even when i started sheep hunting back in the mid-early 70'2 they quoted us dollars

quote:

Originally posted by butchloc:
i might be wrong (and i'm sure i'll hear about it if i am) but i can't remember when canadian outfitters on things like sheep big bear or the like quoted in canadian dollars, even when i started sheep hunting back in the mid-early 70'2 they quoted us dollars

seems like everyone on the planet quotes in USD