Photo: 123RF
The fuel crisis is hitting travellers’ wallets hard.
For some, it means travel is out of the question, but when travel is your business, rising costs must be absorbed or passed on.
Tour company ExperienceKart had a great summer, despite the fickle weather.
But managing director Karthik Subramanian said the recent fuel prices had been hard to take.
“The costs have risen more than two-and-a-half times, which is a sudden shock,” he said.
“(When) you would normally pay $100, it’s become more than $220 to $240 every time you show up to the gas tank.”
A lot of tours were pre-booked so there was not much the company could do, he said.
“We’re just running a business, keeping it afloat, paying our drivers their wages, their contracted hours and their rates, so our profit margins is not really much left,” Subramanian said.
“We’re just biting the bullet at this point in time.”
He would welcome any government relief to ease the pressure if the high prices persisted at the pump.
Price increases were his last resort.
“As a small business, we really don’t have the capacity to absorb all of these costs. Having said that, in the future, if the situation doesn’t really improve, the only other alternative we will have is to pass on these costs to consumers, which is the last thing we will do,” he said.
In Northland, Silver Wave Yacht Charters skipper and director Scott Farrand said they were lucky two of their three boats were sailing catamarans.
“They don’t consume a lot of it but we certainly feel it when we do go to refuel 800 or 1000 litres at a time. Diesel cost has certainly gone up, probably almost doubled the fuel bill,” Farrand said.
For the motoryacht, that translated to hundreds of dollars per day every time it went on a day charter.
They tried to sail where they can, cut down to one engine where possible and maintain a fuel efficient speed to reduce costs while not impacting the experience for guests, he said.
Businesses in popular driving destinations like the Coromandel have also been feeling the pinch, despite record numbers of international visitors arriving in March.
Destination Hauraki Coromandel general manager Kylie Hawker-Green said the domestic market had dropped off.
“What we’ve seen is people have cancelled their forward bookings. They’re waiting until Thursday and if the weather is looking good and obviously the finances are doing ok, they’re making a booking,” she said.
“We used to sit with about a three to four week book in advance and now it’s literally a 24 hour booking window.”
It made it tricky for businesses to plan staffing and supplies, she said.
She understood it was a reflection of tougher economic times, but it did hurt during the school holidays.
“We had people who would come for a weekend instead of for a week. They’d pay for one activity, instead of an activity a day. They’d go out for lunch instead of going out for dinner so they’re still coming but just spending less and definitely constraining their time and their spend while they’re in Hauraki Coromandel” she said.
In the wake of the Middle East conflict, Tourism Industry Aotearoa stood up a programme to keep its members informed, hear about the impacts they were feeling, help them to plan, and provide feedback to the government.
Chief executive Rebecca Ingram said they had not seen businesses raising prices across the board yet.
“What I see is business owners and business operators going ‘this is tough. It’s putting a squeeze on us right now. But we are also focused on the future, because we have to be’.”
Tourism and Hospitality Minister Louise Upston remained confident the country would reach a goal to bring visitor numbers back to pre-pandemic levels.
That hit 93 percent post-peak visitor season, and she said forward bookings showed there was not much disruption to international visitors arriving at this stage.
“Yes, the prices will go up. But we’re not seeing significant reductions or cancellations of bookings, which is really positive,” she said.
“We’re starting from a really strong position so the operators – a number of them we have met have said they’ve had the strongest summer ever.”
New Zealand was a desirable place to visit, she said.
“Air New Zealand announcing three new routes shows there’s confidence in the sector and we will get through this period of disruption and where fuel prices are higher, and I’m very confident we will come out the other side stronger.”
Tourism operators will be keeping a close eye on fuel prices with hope the pressure will ease before the summer surge of visitors arrive.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.