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The cost of rising fuel expenses

by Scott MillerHCBR

Larry Stone and Richard Miller both spend a lot of time on the road. Stone is the co-owner of The Scarab, an Eagle-Vail company that specialized in Turkish rugs and similar items. Miller co-owns All Seasons Catering in Summit County. With businesses that run up miles on the companies vehicles, each is taking a different approach to higher fuel prices.Those prices have hit Stone, Miller and others hard. Each business owner is trying to find ways to deal with the prices that have already exceeded $3.50 per gallon in the Vail Valley.Selective surchargesFor Miller, the answer to rising fuel prices is the addition of some selective charges.When we opened, we didnt have service charges or built-in gratuities, Miller said. Last year, the fuel prices really started to hit hard in a lot of ways.Millers food costs went up along with the cost of keeping his vehicles on the road. What we finally had to do was institute a service charge, Miller said. We did that instead of just raising all our menu prices. For deliveries in Vail, we now add a delivery charge.But, Miller said, hes as selective as possible about when to add charges. Delivery charges are added only for fairly long-distance trips, and service charges depend on the size of the event.Millers trying to walk a fine line. We can only absorb so much of higher costs, but we can only pass along so much to clients, he said.

While Miller wrestles with the balance between his bottom line and what his customers are willing to pay, Stone isnt raising his prices. At least not yet.The fuel market fluctuates up and down, although it seems like its going up over time, Stone said. But I get irked when I get a bill from my water provider and it has a surcharge on it. They didnt drop that charge when prices went down last year.So Stones holding the line on his prices.Weve sucked it up, Stone said. It affects our bottom line, but its what we have to do. If it affects our bottom line too much, well have to think about it.Fuel costs for a delivery van are one thing. But will high prices keep tourists away this summer? It didnt happen last year. In fact, summer tourism set records in many mountain resorts. Some lodges that offered gas certificates to tourists last year arent repeating the promotion this summer.And, since conventions and other business meetings are a big part of summer business, most of those groups have already made their reservations.Its not affecting them yet, said Bill Van Loon, director of sales for Rocky Mountain Connections. But it will.Van Loons company handles lodging and transportation for business groups. Those groups generally make their reservations months before their events, and often lock in their costs for taxis and shuttles. Thats why Van Loon expects to see significantly higher prices for shuttle service sooner than later.We havent seen those costs passed along yet, Van Loon said. But I know they will shortly.When that happens, Well have to pass it along to clients, Van Loon said. It trickles down to everyone.That trickle-down effect worries Van Loon. The biggest challenge we have is that clients budgets arent increasing, he said. Its difficult to pass along surcharges.With all that, though, Van Loon said hes not hearing a lot of anxiety about fuel costs from his clients.Summer speculatingAt this point, businesses can only speculate about what the summer will bring.Officials at AAA Colorado have speculated that gas prices will keep many tourists close to home.Im hoping more people will stay close to home to come see us, said J.T. Thompson, owner of the Bag & Pack Shop in Vail.So far, demand for gasoline nationally is staying steady, and high prices last year didnt have much effect on driving habits. Based on last year, those in the tourism business are optimistic, but nervous.Its hard to directly attribute fuel prices to tourism, said Carly Grimes of the Breckenridge Resort Chamber. We havent seen a huge impact in tourism rates due to fuel prices.But, Grimes added, fuel prices already near or above last summers peaks is cause for anxiety.The prospect of $4 a gallon is concerning, Grimes said. At this point, though, theres no way to tell what the summer will bring, she said.So far, though, anecdotal evidence seems to point toward people swallowing hard and hitting the road.No ones mentioned it so far, said Annette Ramer, who works at the Vail information center in Lionshead. I think people are just taking it. Theyre not happy, but theyre still driving.Besides the folks passing through, a recent survey by the Recreational Vehicle Industry Association indicates that 76 percent of those polled said they plan to travel more this summer, regardless of gas prices.Until prices peak, businesses can only wonder when the current wave of price hikes will break.Were sucking it up for now, but its affecting our bottom line, Stone said. If it affects our bottom line too much, well have to do something.

Fuel costs for a delivery van are one thing. But will high prices keep tourists away this summer? It didnt happen last year. In fact, summer tourism set records in many mountain resorts. Some lodges that offered gas certificates to tourists last year arent repeating the promotion this summer.And, since conventions and other business meetings are a big part of summer business, most of those groups have already made their reservations.Its not affecting them yet, said Bill Van Loon, director of sales for Rocky Mountain Connections. But it will.Van Loons company handles lodging and transportation for business groups. Those groups generally make their reservations months before their events, and often lock in their costs for taxis and shuttles. Thats why Van Loon expects to see significantly higher prices for shuttle service sooner than later.We havent seen those costs passed along yet, Van Loon said. But I know they will shortly.When that happens, Well have to pass it along to clients, Van Loon said. It trickles down to everyone.That trickle-down effect worries Van Loon. The biggest challenge we have is that clients budgets arent increasing, he said. Its difficult to pass along surcharges.With all that, though, Van Loon said hes not hearing a lot of anxiety about fuel costs from his clients.Summer speculatingAt this point, businesses can only speculate about what the summer will bring.Officials at AAA Colorado have speculated that gas prices will keep many tourists close to home.Im hoping more people will stay close to home to come see us, said J.T. Thompson, owner of the Bag & Pack Shop in Vail.So far, demand for gasoline nationally is staying steady, and high prices last year didnt have much effect on driving habits. Based on last year, those in the tourism business are optimistic, but nervous.Its hard to directly attribute fuel prices to tourism, said Carly Grimes of the Breckenridge Resort Chamber. We havent seen a huge impact in tourism rates due to fuel prices.But, Grimes added, fuel prices already near or above last summers peaks is cause for anxiety.The prospect of $4 a gallon is concerning, Grimes said. At this point, though, theres no way to tell what the summer will bring, she said.So far, though, anecdotal evidence seems to point toward people swallowing hard and hitting the road.No ones mentioned it so far, said Annette Ramer, who works at the Vail information center in Lionshead. I think people are just taking it. Theyre not happy, but theyre still driving.Besides the folks passing through, a recent survey by the Recreational Vehicle Industry Association indicates that 76 percent of those polled said they plan to travel more this summer, regardless of gas prices.Until prices peak, businesses can only wonder when the current wave of price hikes will break.Were sucking it up for now, but its affecting our bottom line, Stone said. If it affects our bottom line too much, well have to do something.


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