Dollar vs Rand: Impact on Trophy Prices and Daily Rates?

I think what we can all realize from this thread is the ebb and flow of global economy. I suppose in the end its all a wash.

If anything remember to tip a little heavier if using rand

All I know is that the hunt I was going to book was $10 000 now is $13 000 Canadian so I might have to wait for a more favorable exchange rate!

In addition trying to re-negoiate and already agreed upon hunt is a bad idea (for everybody)

The CAD to USD sure is bad right now. I should of converted a bunch back when it was par. I got so accustomed to it being on par that when it started sliding I never gave two thoughts.

But like everyone says. Book at a price and deal your happy with and don't worry about it. That's what I've done for my first trip. Sure the exchange for us Canadians is now 25-30% extra now but I booked something I am happy with including the exchange and have zero problems or regrets.

Hope it comes back up alittle before May of 2016 but if it doesn't I'm happy and if it does that's just a little extra I'd be willing to take another animal or be more inclined to tip heavier. either way the same amount of money will be spent so the exchange doesn't truly matter.

Albertaguy said:

All I know is that the hunt I was going to book was $10 000 now is $13 000 Canadian so I might have to wait for a more favorable exchange rate!

Click to expand...

Are you figuring the cost in US dollars converted to Canadian dollars or rand?

Right now the exchange rate is 13,000 Canadian to 10,000 US and 130,000 SA rand. The Canadian dollar is traiding at 1 Canadian dollar is worth 0.76 US dollars.

I wished that the exchange rate was like this on Canadian to US back when I did my bear hunt in British Colombia. Back in 2012 it was close to 1:1

Albertaguy said:

All I know is that the hunt I was going to book was $10 000 now is $13 000 Canadian so I might have to wait for a more favorable exchange rate!

Click to expand...

There are Outfitters who would be happy to sell a hunt to you in Canadian Dollars. You should speak to your Outfitter and ask him if he's willing to do the same.

CT Safaris said:

There are Outfitters who would be happy to sell a hunt to you in Canadian Dollars. You should speak to your Outfitter and ask him if he's willing to do the same.

Click to expand...

Chris,

If asked would you accept pretty much any currency within reason? I get that you wouldn't take the Zim dollar if it still existed, but if say a Chinese client wanted to pay in Yuan would you take it, or does a risk of higher short term fluctuation make you stick to the major currencies like the dollar and euro and away from others such as the Yuan or Ruble?

This is an interesting thread...

My view on the matter:

If I were to book a hotel room for $100 in the States at 13/1 and the exchange rate changed between my booking and my actually staying there - would it be fair for me to ask the hotel to adjust its rate accordingly? Would any hotel even consider or entertain such a request? I guess the answer is "no", they price in US$, I pay in US$ and they couldn't give two hoots of what the ZAR is doing in relation to the US$... The hotel has priced itself - based on its star rating, on its reputation, on what the market is willing to pay and how much profit it wishes to make... Why should it be different the other way around?

Is it important for me to know how much profit the hotel is making at $100p/n and is it important for you as customer how much profit your Outfitter is making? Is there an acceptable "margin" that you - as customer perceive to be fair as far as your Outfitter's profit is concerned?

What is in my view important is that the receiving end of this deal is indeed making a profit - especially if I book my trip a year out... Last thing I would want is to do is to pay a deposit on a trip (or full fare in the case of booking a hotel) just to arrive there to find the doors are closed for business... I personally don't care whether the hotel I book makes a 30%, 50% or 100% profit. As long as they provide the service they promised and as long as I can afford it I'm happy...

Here in Limpopo - landowner's asking prices for e.g. Kudu increased by 100% and more from 2014 to 2015 (in ZAR). My price for Kudu (in US$) increased by 25% over the same timeframe... The Rand was changing at 10/1 last year and is changing at 13/1 now...

To put things in perspective - at 10/1 I got ZAR20,000 for a kudu bull last year and paid ZAR10,000 for it. So on the face of things I was making $1,000 on every kudu bull I hunted with clients (that is gross - not nett profit)...

Right now, I'm getting ZAR32,500 for the $2,500 I had listed for kudu when I was selling hunts at the shows beginning of the year but I'm paying ZAR25,000 for it. So I'm making ZAR7,500 (US$576 at present exchange rate) on a kudu bull. A few months ago - the Dollar was changing at 12/1 so then I was only getting ZAR30,000 for the $2,500 I charged and making ZAR5,000 ($384 in today's terms)...

Bottomline is my "profit margin" on kudu has more than halved in one year - in spite of the improving exchange rate (from a US perspective) and in spite of me increasing my price for kudu with 25%. Would it be fair for my clients to ask me for a discount now because the Dollar has strengthened? Fortunately they don't...

Of course; the favourable US$/ZAR exchange rate (from a US perspective) does give Outfitters more leniency in setting pricing in some instances and many of them (including myself) do. And all of us wants to get the most bang for our bucks - nothing wrong with that.

But personally I don't think the exchange rate should be a bargaining tool when negotiating your hunt.

Best,

Royal27 said:

Chris,

If asked would you accept pretty much any currency within reason? I get that you wouldn't take the Zim dollar if it still existed, but if say a Chinese client wanted to pay in Yuan would you take it, or does a risk of higher short term fluctuation make you stick to the major currencies like the dollar and euro and away from others such as the Yuan or Ruble?

Click to expand...

Royal,

I don't hunt with the Chinese as the only enquiries I've ever received from them were for rhino "hunts" and I don't do that... (well not with Chinese or any nationality interested in the horn as opposed to the hunt).

But yes; I have accepted currency from clients in Australian Dollars, Canadian Dollars, Euro and Danish Crown (to name a few). My personal experience has been that most of my clients are happy to pay in USD, CAD and Euro - then again - that's where most of my clientele are from.

Of course my contract states that all prices are subject to exchange rate fluctuations so I do cover myself in some way. But I can say that in 13 years + in business I've never changed pricing on a hunt after the contract was signed.

Regards,

A deal is a deal is a deal once it's done! Period.

Exchange rate should not even be a factor once the deal is struck. At least that's how I was raised. Sure it could suck if it goes up or down. One of the lowest forms of life on this earth is a man that reneged on a deal.

I know it's a strong opinion but it is my two cents.

R.

One of the things that I appreciate about the hunt deals that are offered by outfitters in SA is that almost all of them are in USD. If I had to worry about conversion rates to another currency, it would be a huge non-starter for me. I want to worry about the hunting, taxidermy, air plane tickets ect. And not about some exchange rate changing the cost of my safari.

CT Safaris said:

I've never changed pricing on a hunt after the contract was signed.

Click to expand...

Redruff said:

A deal is a deal is a deal once it's done! Period.

Click to expand...

Completely agree!!!

I really think the more interesting part of this thread isn't someone going back on a deal as everyone seems to agree that is a no-no, but rather how could you play the exchange rate in order to get a better deal?

Scenario One:

I think the exchange rate will drop back to 8:1 in two years when i plan to hunt. I should want to pay in dollars and lock the price in now.

Scenario Two:

I think the rate will go up to 20:1 in two years when I plan to hunt. I should either wait and look for a last minute bargain as the hunt gets close, or lock in the price now in rand, then converting my dollars when payment is due.


I think I got that right? I know I oversimplified as I didn't take the difference in national inflation rates into account, nor the yearly increase/decrease in safari pricing etc... I'm not smart enough to try it (if I was I would trade money for a living and be filthy rich), but it is fun to talk about.

This one can work out in anyones favor at any time switch directions at a moments notice.

Is there a simple answer? US currency is an international standard. Pricing in USD keeps prices stable no matter how volatile local currency becomes.
Pricing in local currency makes sense too because that is what sets the standard that the person providing the service needs to earn to turn enough profit to make a living.

As Chris and others have pointed out, those who try to take advantage of high exchange rate may find themselves priced right out of the market when things come back down. Its a tough balance.

The only things I know for sure is that when a clients local currency is low compared to the currency charged, it decreases the chance of clients from that country from booking and vice versa. I have myself used this to my advantage when booking hunts and it makes sense to do so. If CAD is low compared to USD but doing very well against EUR, it makes sense to shop for hunts priced in EUR, when things swing the other way there will be plenty of opportunity to do the hunts priced in USD. My money is finite and there are some huge savings to be had by playing exchange rates.
And second, no matter how the price structure is set up, not everyone will agree or be happy with it.

Well put Diamondhitch!! As a fellow Canadian the exchange rate is something that I am watching/following closely..

I agree once a deal is made, it in stone.
IF I were to start negotiations for a hunt Right now with current exchange rates . On the PH side Make the best deal you can but it would have to be paid up front. Same for the client , want you best deal anty up now. I see the risk for the PH if the hunt is not paid for at the time of the deal.

Great thread! I agree that done deals should never be renegotiated. However, US hunters have more leverage than ever with the current exchange rate. The bottom line is that our money is worth more and should be able to buy more. It's that simple. That with the reduced cost of fuel should make safaris less expensive. Also, remember, the outfitters get paid in dollars. That means they are in the same boat as we are. They have the ability to buy more with less. Safari costs have already risen to the point that it is reducing demand from American hunters to go there. That means more outfitters to chase less hunters. Simple supply and demand will improve costs over time. There are going to be some great deals over the next couple of years. It's just simple economics.

Agreed on a deal is a deal - my question is if you look over the last several years the U.S. Dollar has strengthened versus the rand thus should prices gradually decrease. I have not seen a sharp increase or decrease over time - most of the strength of weakening of the dollar has occurred over time. A deal is a deal and once we shake hands I am happy to pay.

Thanks for the feedback from both sides.

dt

As far as I'm concerned once you have agreed a hunt and a price, that is what you have agreed and that is what you should pay. Everyone else seems to agree with that, which is great.

Here is an example for you though, I have a hunt booked for Spain in November to hunt Ibex. I have agreed a price with an outfitter and am going to hold my end of the agreement and pay what was agreed. I have paid my deposit with the balance remaining to be paid.

Now with the eurozone crisis the Euro to Pound exchange rate has fluctuated a little. I decided I wanted to convert the balance of my safari to Euros (Cash) when I believed I would get the best exchange rate for my money. It was 1.41 when I did it, which was a very good exchange rate. The exchange rate since then has come down to 1.36 so I was better off exchanging my money when I did. However, should the exchange rate improve beyond what I previously exchanged my money at, I have a receipt and contract with the company I exchanged with that they will allow me to convert my currency back at the rate I originally traded at. I would then exchange my money again at the new exchange rate and be further better off.

This I have no problems with, but as others have said I wouldn't haggle the deal I agreed as thats what I agreed. If someone wants to haggle the price before they book and see what deal they can get thats up to them but once you have agreed a price thats whats to be paid as far as I'm concerned.

^^^

Now that is interesting. Was there any additional fee for the "insurance" of the exchange rate, or any limit as to what is covered?

No additional fee or cover needed for the insurance of the exchange rate. I'm not sure if there is a limit. Im certainly not converting enough to be effected by one, and I was told the amount I am exchanging would be fine to convert back at the original exchange rate.