With oil at more than $140 dollars a barrel, fuel levies are no longer the preserve of airlines, railways or freight companies. In an attempt to mitigate the pain, some Australian tour operators are asking tourists to pay up to $20 in fuel levies.
Some small businesses are including fuel fees in their tour package price or asking tourists to pay upfront to the operator on the first day of their trip.
Crikey trooper John Allison stumbled across the new trend when visiting a crocodile farm on his June Cairns trip. “The bus company charged all passengers a ‘fuel levy’ as they got onto the bus. The driver said most of the tour companies were doing it,” he told Crikey.
“We were all surprised, it was on the brochure but no one saw it,” he says.
The likes of Adventure Tours Australia (ATA), Travel Innovations, Gecko Lodge and Truly Australia all mention fuel levy charges on their Websites.
ATA Director Ralph Jackson told Crikey: ATA “sets tour fares in May for one to two years in advance… This is due to the nature of the tourism industry. We factor in the price of diesel in our tour prices. If the price of diesel exceeds the range we anticipated, we will consider a fuel surcharge.”
ATA charges a $10 fuel levy on 1 to 4 day tours and $15 for tours and packages over five days.
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Australia 4 Tours, an agent for ATA, also states that:
The price of diesel fuel has reached a record high in the last week and is expected to increase further, having a substantial impact on our operating costs.
We are forced to raise the fuel surcharges currently in place for our tours and passes. All bookings made by 30th May 2008 will be at current levels. However, the increased levels outlined below are in AUD$ and effective for all new bookings and passes sold on or after 1st June 2008.
Some operators have withstood the fuel price shock so far. Queensland Cruise operator Big Cat Cruises says the large investments in design and mechanical improvements to its vessels over the last four years have helped.
“Originally we had budgeted for considerable savings in fuel costs from these modifications. Instead these modifications have offset a large proportion off the recent fuel increases,” says Kim Thomas, General Manager for Big Cat Green Island Reef Cruises.
“To maintain a ‘full cash price’ fare structure we have chosen to recover remaining portion of the additional fuel cost by fare increases rather the addition a of fuel levy,” says Thomas.
It’s too early to know the impact of the rising fuel prices, Maree Tetlow, Chief Executive of Tourism NT, told Crikey. “[We’re] aware that some operators have introduced fuel surcharges and Tourism NT will be discussing the impact of rising fuel prices with industry members.”
Tourism is already feeling the effect of rising fuel prices as Australians change their holiday plans.
Research by Roy Morgan and O’Mahony, Whitelaw and Ritchie shows that rising fuel prices have an effect on Australian’s propensity to travel. Of the respondents who’d taken a holiday around 2005 when the survey was done, between 30 and 32% changed their holiday plans due to rising fuel prices.
And, of course, rising oil prices combined with a strong Australian dollar make Australia a more expensive holiday destination for foreigners.
“Higher fuel prices are one of a variety of factors contributing to a challenging outlook for the tourism industry,” Matt Price, spokesperson for Tourism Australia told Crikey. “Other factors include the strength of the Australian dollar, increased competition from short-haul destinations, the economic outlook in some of our key markets, and aviation capacity.”
But despite this combination of factors, Price maintains that prospects are still looking good for the Australian tourism industry. “There were more than 5.6 million international visitors to Australia for the year ended April 2008, up one per cent on the same period last year. 2007 was in fact the biggest year on record for tourist arrivals.”