What Advisors Should Know About Canadian Dollar Pricing and Canada at Par Trends

A wave of Canadian dollar pricing and even Canada at Par initiatives – especially by luxury cruise lines – is changing the way Canadian travel advisors do business with suppliers and successfully market to their clients. 

Canadian dollar pricing
MSC Cruises created a splash earlier this year as the first major ocean cruise line to open a Canadian office, crucially, with the entire marketing, sales, and booking process in Canadian dollars.

Country Manager Ian Patterson noted the ease and positive impact on Canadian agents booking their clients in Canadian dollars on MSC Cruises. “It’s not a new office. It’s a new Canadian market,” he said.

To Stephanie Bishop, managing director of the Globus Family of Brands, Canada (which includes Avalon Waterways), the idea of a Canadian market is not new. “We’ve been here since the ‘70s, and not as an extension of the U.S. market. Avalon has only been in Canadian dollars,” Bishop said.

“We see more suppliers making Canadian pricing announcements, and we think, should we have been making a bigger deal of this ourselves all along?” she continued. “We took it for granted. It’s quite simple. We’re doing business here. Canadians know what Canadians want. That’s one of the reasons for our success in this market.”

For other cruise lines, Bishop says, yes, U.S. currency is an issue. Luxury cruise lines, in particular, “never thought Canadians had an appetite for luxury. That’s a misconception. It’s smart for them to catch up.”

Commitment to the Canadian market is also how Silversea’s Managing Director for the Americas Mark Conroy, positioned the cruise line’s adoption of Canadian dollar pricing. Silversea started taking reservations in Canadian currency last year, along with producing Canadian editions of marketing materials for Canadian consumers.  

“If you try to tell the market you’re committed to the market, and you’re not selling in their currency, you’re really only half-committed,” Conroy said. 

In addition to perception, Silversea’s Canadian dollar pricing structure is as much as 15% less than the actual exchange rate. And even without the beneficial exchange rate, it removes the need for consumers to “figure out the currency risk” of taking a vacation.

Conroy sees compounding benefits. Avoiding the currency conversion hassle from an advisor and a consumer perspective, it also liberates advisors from talking about the moving target of exchange rates, to talking about value. Because although the luxury line’s prices may appear to be more expensive in Canadian dollars, Conroy points out that when advisors communicate what Silversea includes in the fare, transparent pricing in Canadian currency cements the relationship with consumers, as it eliminates future sticker shock as a result of onboard expenses priced in U.S. dollars.

If using Canadian currency reduces what Conroy calls “friction” while making bookings, there’s one Canadian dollar offer that virtually guarantees sales in Canada.

Canada at Par initiatives
Three magic words trigger an intense reaction in Canadian travelers and travel advisors: Canada at Par.

With the exchange rate between U.S. and Canadian currency habitually hovering in the 25% + range, a traveler able to pay 1-1 in Canadian dollars for a trip quoted in U.S. dollars receives an irresistible discount. 

Hailing from Canada himself, Randall Soy, executive vice president sales and marketing, of Regent Seven Seas Cruises, personally understands how Canada at Par “resonates so exceptionally well in Canada.”

It’s part of Regent’s trend-setting, two-part Canada strategy. About four years ago, the luxury cruise line began accepting and charging in Canadian currency, “creating certainty” for customers who previously, paying in U.S. dollars, “had no idea what they were ultimately paying.”

Two years ago, Regent doubled down, this time introducing Canada at Par offers. Where Canadian pricing creates confidence for all products, Canada at Par “drives business for us in Canada.”

“It’s been a resounding success for us,” Soy said. What is billed as a “limited time” offer has been updated consistently since launch with about three dozen products offered at par at any given time.

Like Conroy discussing Silversea’s Pay in Canadian pricing, Soy says Regent Canada at Par offers change the narrative, and “rather than creating a perception of a product discounted by 25%, instead, it converts the conversation to inclusive value” for the consumer, and “the high commission that inclusive products create for advisors.”

This summer, Seabourn followed suit, testing Canada at Par offers beginning with Alaska and British Columbia sailings roundtrip from a Canadian homeport, Vancouver, to be attractive to Canadian residents. It was so successful, Seabourn’s Canada at Par offer quickly expanded to include more products, and is still available today. 

Chris Austin, Seabourn’s senior vice president, global sales and marketing, sees Canada at Par offers now as, “the industry standard” and they’re “so easily recognized. We are always looking at ways to reach new Seabourn cruisers, and if this can reach a new audience, it is a win-win-win for Seabourn, guests, and travel advisors,” he explained.

“The Canadian market is such a vital part of our North American trade strategy and we’re constantly looking for ways to best use the talents and expertise of travel advisors across the country,” Austin continued. “It is another tool in their toolbox to help them close the sale.” 

Will the trend last?
Until recently, Canada at Par offers had been most commonly used on an occasional basis by Canadian-visitor-sensitive destinations like Orlando, and mainstream suppliers like Disney and Norwegian Cruise Line, to beat competitors on price.

While Derek Lloyd, national director of sales, Canada, for Norwegian Cruise Line, said that NCL has no immediate plans to introduce another Canada at Par offer, “I’d love to see it again. Suppliers use the Canadian market to fill unsold space at a discounted rate in an opaque manner so as to not disrupt pricing in the larger U.S. market. It’s a pretty solid strategy that often Canadians benefit from!”

What’s new is seeing luxury cruise lines committing to not only Canadian dollar pricing, but also to Canada at Par offers. And just a couple of weeks ago, Silversea also joined the Canada at Par club, offering the promotion on a dozen 2020 first quarter and second quarter voyages.

As Randall Soy pointed out, for Regent, as well as other the luxury suppliers: “When so much is already included, we can’t include more to increase demand. Canada at Par respects the Canadian market without disrupting the value proposition.”

With the Canadian market gaining recognition for its importance, especially to luxury cruise lines expanding their capacity, we can expect to see more initiatives specifically targeting Canada and benefitting Canadian travel consumers and advisors.