As tourists return, tour boat operators are feeling the pinch of high diesel prices

·3 min read
Boat tour operators are feeling the squeeze of increasing fuel prices ahead of an expected busy tourism season.  (Submitted by Clifford Dolan - image credit)
Boat tour operators are feeling the squeeze of increasing fuel prices ahead of an expected busy tourism season. (Submitted by Clifford Dolan - image credit)
Submitted by Clifford Dolan
Submitted by Clifford Dolan

After two years of the COVID-19 pandemic taking big bites out of business, tourism operators are finally seeing the light at the end of the tunnel and are gearing up for what most expect to be a profitable season.

But some are facing an entirely new challenge.

Fuel prices are skyrocketing across Newfoundland and Labrador, and those who rely heavily on fuels to run their businesses — such as boat tour operators — are frustrated with the way things are going.

"Everybody certainly had an air of optimism coming into 2022, but for the last couple of months, as everybody is aware, there's just been seemingly daily increases in the cost of fuels," said Mike Gatherall, owner of Gatherall's Puffin and Whale Watch in Bay Bulls on Newfoundland's east coast.

"It certainly has taken its toll in some regards and will continue to."

'It's a nervous day when you got to call the truck'

Gatherall, who has been in the tourism industry for almost 40 years, said bookings are rolling in for this summer, and he's happy to see people on the move again.

But the cost of doing business has nearly doubled, he said. His boat uses roughly 5,000 litres of diesel a week when things are busy. The company also offers a shuttle service and tours on a smaller boat that runs on gas.

Heather Gillis/CBC
Heather Gillis/CBC

"Diesel has pretty much doubled from the fall of 2021 to the last four or five months.… That does take a fair chunk out of the bottom line," Gatherall said.

"You can only internalize so much of it, then of course you have to pass so much of it on. For tourism operators, when people go to spend their money, that's a discretionary spend. If it comes to do they heat their house, do they go out to a restaurant or do they take a boat tour, it's the discretionary items, unfortunately, that are really going to get cut."

Barry Rogers owns and operates Iceberg Quest Ocean Tours, which has five vessels and is based in St. John's with a second location in Twillingate on Newfoundland's north coast, over 400 kilometres away.

Rogers said he spends anywhere between $11,000 and $12,000 every 10 days on fuel.

"It's a significant price right now in terms of fill-ups," said Rogers.

"It's a nervous day when you got to call the truck because you're not quite sure whether it dropped down 10 or 15 cents or whatever the ongoing fluctuation is in the price. For us it's quite significant."

Back with a bang

Rogers said summer bookings are surpassing totals from even before the pandemic, but as fuel prices continue to soar, he's worried he'll have to cut back on daily trips for customers while trying to keep his staff employed.

He said he can't push the extra costs to consumers or risk pricing himself out of the market.

"That's a major concern for us," he said.

"In any given season between my operations I have between 40 and 50 people employed. I have a duty to them in turn to keep this going, to be able to pay well in a good working environment. I need that business to keep a whole lot of other people in good shape financially."

Iceberg Quest Ocean Tours
Iceberg Quest Ocean Tours

On Tuesday the provincial government announced it will be look at the legislation for the Public Utilities Board, which regulates fuel prices in Newfoundland and Labrador.

Meanwhile, Marine Atlantic told CBC News its fuel-hedging program has protected the company and its customers from unpredictable swings that affectfuel prices. The corporation operates leisure and commercial ferry services to and from mainland Canada out of Port aux Basques and Argentia.

"There are no plans at this time to increase our fuel surcharge," the company said in an emailed statement.

The following chart shows how gas prices have changed recently at Newfoundland and Labrador retailers, as reported by users of the website.

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