By NATARIO McKENZIE
Tribune Business Reporter
TOUR companies are going to be hurt "big time", and some may end up going broke if fuel prices continue to rise, a leading operator telling Tribune Business yesterday that "our fuel costs have gone through the roof".
William Saunders, founder of Majestic Tours, said tour companies were forced to absorb the rising cost of fuel since they were locked into fixed contracts.
He explained: "The problem with the Bahamas is that whenever the prices go up, we are going to have to absorb it. We have been advised that it is a good possibility that, by the end of the year, gas will be $6 a gallon and, by the end of 2013, $7 a gallon if there isn't a decrease worldwide in prices.
"That has put a company like ours and others in the business in an awkward position, because we have to sign a contract with all of our major agents for one year. The tour companies are the losers."
Mr Saunders added: "Our fuel costs have gone through the roof. We operate 60-plus pieces of equipment, and it takes a lot of gas and diesel to keep that going on a daily basis. We run an operation for 22 hours a day. The people in this type of business are really going to be hurt big time, and some of them probably will go broke. That's the reality of it."
Mr Saunders said that come 2013, he may have to alter his fixed-rate operations. He explained: "I have already sent a letter to all of the tour operators I do business with worldwide, and basically advised them that our rates will remain in effect through 2012 but, come 2013, we might not be able to give them a full year's rate, or guarantee on a rate for a whole year.
"We may have to cut it down to six months or maybe even three. It will be up to them how they want to handle that, but I can't continue to absorb the kind of increases we have experienced and give that one-year period guaranteed for the price we are going to charge."