Canadian event planners who are in the process of planning foreign incentives trips, retreats, and other corporate events are facing a new challenge this year. The value of the Canadian $ against the US$ has declined steadily since the beginning of last summer and sharply in recent months.
This trend is expected to continue until the summer. (The Canadian $ is affectionately called "the Loonie" because a loon has been pictured on the Canadian $1 coin since 1987.)
For American companies, this means that they can stretch their budgets by selecting Canada as a destination for foreign events.
For Canadian companies, the impact is the reverse. When foreign exchange rates are declining or fluctuating, it can be challenging for companies to budget. Companies may end up paying 10% or even 15% more for their trip than they budgeted by the time foreign exchange differentials are calculated.
Here are strategies for event planners to try. They will work for any event planners organizing foreign events in any countries in which the currency is facing pressure.
- Select a destination where the foreign exchange rate is in your favour.
For example, look to Japan ,UK, or European destinations if your dollar is strong against the Japanese Yen, Pound Sterling and Euro. Remember the Euro is also accepted in parts the Caribbean (e.g. Guadeloupe, Martinique, St. Barts, Sint Maarten. Sites like the xe.com on Canadian Forex and poundsterlinglive can be helpful. View long term trends (1 year and 5 year) to get an idea of where the foreign exchange rates sit.
- Determine if your preferred venue will draw up the contract and accept payment in your currency.
This is the best hedge against foreign exchange fluctuations but hard to find.
- Determine if your preferred venue will draw up the contract and accept payment in the local currency.
Recently, I have found that some Mexican resorts are willing to do this.
- Small groups with tight budgets may find that boutique hotels, inns and villas can be more flexible in terms of the currency they are able to accept.
- Closely monitor foreign exchange rates close and take advantage of upward swings.
Foreign exchange rates are dynamic. Even during periods of overall decline, there will be days when a currency is stronger.
- When foreign exchange rates fluctuate in your favour, even if it is just briefly, take advantage of the upswing to:
- pay the next installment identified on your contract, even if this means paying early
- purchase the required foreign currency and save it so that, you'll be prepared in case rates are lower when payments are due.
While there are no quick fixes, some of these strategies may pay-off and help organizations manage their foreign event budgets more effectively.
I offer other tips for planning budgets for foreign events: Currency Fluctuations Open Door for Corporate Event Savings, 6 Ways to Stretch Your Meeting Budget in Canada and Flexible Foreign Itineraries Stretch Corporate Event Budgets
Photo Credit: Sharon Drummond