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Tour operators impose 'currency surcharge' as loonie continues its tumble

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The price of a trip to the sunny south is going up as more tour operators add a so-called "currency surcharge" to offset the sharp decline in the value of the loonie against the U.S. dollar.

Transat A.T. (TSX-TRZ.B) spokeswoman Debbie Cabana confirmed Thursday that Canada's largest tour operator is adding a $35 currency surcharge to sun destinations and Florida effective Jan. 27.

Published reports say Sunwing and Air Canada Vacations are also both implementing $35 surcharges to offset the falling loonie — Air Canada (TSX:AC.B) effective Jan. 27 and Sunwing effective Jan. 30.

Spokesmen for the two tour operators were not available for comment.

The Canadian dollar is down sharply against the American greenback this year, falling almost a full cent Wednesday and then finishing down 0.09 of a cent at 90.10 cents US on Thursday. At one point in Thursday's session it hit 89.35 cents US, the first time it has fallen below the 90-cent US mark since mid-2009.

Sunquest, a unit of Thomas cook, got the ball rolling on the issue earlier this month, warning travellers to book by Jan. 11 to take advantage of lower prices before it began taking measures to compensate for the lower Canadian dollar.

Sunquest did not give a specific figure for its planned price increases aimed at offsetting rising hotel as well as fuel costs, which are priced in U.S. dollars.

"The increase will depend on the cost of the hotel itself — the more expensive properties will see a higher increase, for the less expensive ones the increase will be less noticeable,'' spokeswoman Kerry Sharpe said in an email at the time.

Meanwhile, WestJet (TSX:WJA) said Wednesday that it had "no intention" of imposing a currency surcharge on vacations in response to the falling dollar.

"We are committed to the transparency of our advertised prices," Tim Croyle, WestJet Vacations vice-president and general manager, said in a release.

"We believe the base price should reflect the true price of the package, and that the only taxes and fees charged should be those that are passed on to government and regulatory bodies, not used to offset cost increases."

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