Fuel costs dampen tourism: Soaring gas prices have South Shore merchants nervous
More than half of active leisure travelers would change their travel plans if the price of fuel reaches $3.50 per gallon, according to a survey released this week and days before another hurricane, Rita, threatens to spike gas prices.
With the shoulder season in full swing, which typically brings in fewer visitors to the area before the winter ski season, some South Shore merchants say they’re nervous at the prospects of even higher gas prices, with some already making adjustments to their books to cover the added costs.
John Brown, who owns Emerald Bay Aviation, is already seeing the downturn. His Minden-based sightseeing tours and flight school have taken a 40 percent drop in business versus a year ago.
In the last six months, Brown calculated paying 21 percent more for aviation fuel, which costs $1.86 per gallon.
“We’ve taken a huge hit,” he said. In turn, he’s had to pass down the budget dent. He’s raised his hourly tour rates from $150 an hour to $170 to $190 an hour.
“That’s exactly what you have to do to maintain a meager profit margin,” Brown said, adding he’s heard other businesses going through the same situation. “We’re all in the same boat.”
Indeed, they are.
Fuel surcharges added
Aramark, which runs Zephyr Cove Resort, was forced to increase rates to operate its cruises and charter tours on Lake Tahoe. It costs $2 more to take the popular Emerald Bay cruise on the two paddle wheelers, Tahoe Queen and M.S. Dixie. Fuel surcharges amounting to about $100 have been added to charter the Tahoe Paradise and Princess.
“I think we’ve reached the point where people may stop spending or stop coming. It wasn’t this way last year when fuel prices were up,” spokeswoman Carol Chaplin said.
As a consumer, Chaplin has even found herself curbing her traveling plans to save money. She canceled a driving trip to Oregon planned for next month.
On a recent houseboat trip to Lake Berryessa, people were lined up at the Costco fueling stations “like there was gas rationing.”
Chris Gallup, who also works for Aramark as a boat captain, has even switched vehicles to make the Minden-to-Lake Tahoe commute. His Ford Explorer sucked $15 from his wallet on every round-trip. His wife’s Subaru takes about a third of that.
To save money for the company, the boat operators shut down the engines earlier at the end of cruises and start them up later at the beginning.
“There’s less warm-up time,” he said.
Ski resorts prepared
For the most part, Heavenly Mountain Resort and Sierra-at-Tahoe pledged to absorb the rising cost of fuel. Both resorts’ chairlift systems are electrically operated.
Heavenly’s Chief Operating Officer Blaise Carrig said his crew expects to maintain the same level of grooming operations despite the rising price of diesel. The shuttle service may receive a little more scrutiny.
“We’ll probably be a little wiser with our transit budget,” he said.
Sierra’s spokeswoman Nicole Klay said that “so far we see no impact on our guests.”
Meanwhile, Kirkwood Mountain Resort spokeswoman Tracy Miller said the ski area has invested in new energy efficient generators. Kirkwood is not on the grid. The resort and surrounding homes rely completely on generated power.
“We’re optimistic (higher gas prices) won’t affect people’s interest in skiing,” Miller said, “but it will affect our operating costs.”
On the road
Motorists are already seeing the impact when the rubber meets the road. AAA reported last week that fuel prices rose 39 cent to $3.25 for a gallon of self-serve unleaded in South Lake Tahoe. According to the Travel Industry of America, one third of survey respondents indicated their travel plans would change if gas prices reached that point.
Americans could be in for a long ride if there’s not more talk of conservation, Anita Mangels of the Western States Petroleum Association warned.
Even though the public scrutinizes the oil industry and accuses it of price gouging, the lack of supply will continue to be a problem if more people don’t carpool or make group trips to the store, she said. Also, there needs to be more refineries, she said.
“We haven’t had one built here in 29 years,” Mangels said. “This is simply a supply-and-demand issue.”
– Tribune staff writer Amanda Fehd contributed to this report.
National traveling survey
— 53 percent of those surveyed would change their travel plans if gas prices reach $3.50
— 26 percent would drive shorter distances
— 25 percent would drive a mid-sized sedan, 20 percent, a sports utility vehicle, 11 percent, a pickup and 10 percent a full-sized sedan
— 14 percent would not change their plans regardless of the prices
— 56 percent would dine out less
— 47 percent would go to movies not so often
— 41 percent would refrain from buying gifts or clothes
— 26 percent would earmark budget for basic living expenses
Respondents were planning to drive an average of 582 miles on their next vacation.
Source: Travel Industry Association of America