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The Honolulu Advertiser
Posted on: Monday, June 9, 2008

Washington tourism feels the fuel pinch

By Ylan Q. Mui and David Cho
Washington Post

WASHINGTON — The Spirit of Washington dinner boat packs powerful twin diesel engines that carry 600 people on sightseeing voyages along the Potomac. Two eight-cylinder generators keep the neon lights glowing at the onboard bar. The bow thruster helps it push away from the dock.

Fueling them all are 7,000 gallons of diesel that have shot up in price by about 40 percent over the past year. Add four other boats with a total of 20 engines among them, and it's one big financial headache for Sal Naso. He's worried.

"We've absorbed most of the cost," said Naso, vice president and general manager of Entertainment Cruises, which owns the boats, "but if it keeps going up, we're going to have to pass it on."

The spike in fuel prices is hitting the Washington region's tourism industry during the heart of the high season, pummeling vacationers and the companies that cater to them. Official numbers won't be available for months, but warning signs have been spotted.

Some travelers are cutting their trips short and have less money to spend. Tour bus operators and sightseeing boats struggle to maintain prices even as their costs increase. One rental car company is offering free gas to keep people driving as the specter of $4-a-gallon fuel begins to reshape the way we spend our time off.

"We are starting to see some fundamental changes in consumer driving behaviors," said David Portalatin, director of auto industry analysis at NPD. According to an April survey by the research firm, 8 percent of consumers plan to vacation closer to home, and 12 percent have canceled trips altogether.

SIGNS OF VISITOR DECLINE

The trouble began around Memorial Day, said Lon Anderson, director of public affairs for AAA. Several measures indicated tourism was declining.

In Ocean City, Md., AAA reported, the "flush count" — an estimate of the number of visitors based on water use — was down 13 percent from the previous year. Holiday traffic across the Chesapeake Bay Bridge dipped 3 percent, the first significant decline since 2002. Traffic on Virginia highways was down 4 percent. MasterCard gasoline purchases were down 5 percent in the Washington area.

And the road isn't always easy for those who do drive: AAA has seen a 15 percent increase in calls for help from motorists who have run out of gas as they test the limits of their fuel tanks.

Washington's tourism bureau is trying to pre-empt a big drop in visitors with a new $2 million marketing campaign dubbed "Staying Power" that touts the capital's free attractions (jazz at the Corcoran, anyone?) and public transportation. Destination DC President Bill Hanbury said anecdotal accounts from local companies show that tourism is about even with last year.

About 2.3 million leisure travelers visit the city between June and August, according to the organization. Their dollars are particularly important during these slow, sweaty months when Congress is out of session and business travel grinds to a halt. More than 90 percent of leisure travelers arrive by car; nearly 60 percent stay overnight.

"We are a drive market," Hanbury said. "You're not even taking a full tank of gas to get to us, and I think that's going to be our advantage."

STRUGGLING FOR SOLUTIONS

Tour companies have also struggled under increasing fuel costs. Naso said he spent about $3 a gallon on diesel gasoline last year for the five tour boats in his fleet. Last week, he paid $4.29 a gallon to fill up one boat's 3,800-gallon tank.

Naso has sought ways to offset the increase without scaring away customers. The company tacked on a 3 percent fuel surcharge to each ticket in the past year. But in a nod to increasingly frugal customers, it plans to offer regular, two-hour midday tours starting next week that are cheaper than its traditional dinner cruises.

Naso has also slowed down the new Seadog speedboat that travels to National Harbor — a half-knot decrease almost imperceptible to riders but which increases fuel efficiency.

"Everybody feels the same pinch," he said.

At Open Top Sightseeing, each red double-decker tour bus holds about 120 gallons of gasoline and needs refueling every other day. The company runs 11 buses that clock 100 miles daily. The route starts at Union Station and stops at the White House, Adams Morgan and Arlington National Cemetery.

"We can feel it like everyone else," said Anders Nielsen, U.S. development director for Open Top's parent company, Les Cars Rouges. He may not be able to put extra buses on the route during busy times this year and plans to train drivers on how to improve mileage.

FUEL-EFFICIENT MEASURES

Fleet Transportation in Alexandria, Va., has begun working with consulting firm Green Ride Global to help it become more fuel-efficient. It now requires drivers to switch between idling their engines for one minute and turning them off for 10 minutes, to conserve fuel when waiting for passengers. The optimum driving speed is 50 to 55 mph, and jumping from 20 to 70 mph when entering the Beltway is discouraged.

Stacey Glazier, director of sales and marketing, said Fleet has already seen some cost savings, and the changes have been a selling point to both private groups and corporations.

"We can offer you that sense of extra-conscious effort," she said.

But will $4 gas keep people from driving and companies from making money? The Car Care Council isn't taking any chances.

An industry group that promotes auto maintenance, the council released this news alert last month: "Traditional summer family vehicle vacation better deal than flying."

The council extolled the benefits of driving: leaving at any time, no long security lines and the chance to stop and stretch at any moment. Even if fuel were to hit — gasp! — $5 per gallon, the council estimated that a 1,000-mile round-trip would cost a family of four riding high in an SUV about $343.

"The thought of sitting at home and forgoing that wonderful family road trip, and all the pleasures that brings and enjoying some beautiful country — we certainly don't want to see people not doing that," Executive Director Rich White said. "It is an encouragement not to freak out."