Post by ferryfast admin on Apr 7, 2005 19:09:10 GMT -5
Rising fuel prices deflate tourism hopes
WebPosted Apr 7 2005 09:19 AM NDT
CBC News
GANDER, NFLD. — Record-high gasoline prices are making tourism operators nervous about the coming summer season.
With regular gas at many areas of the province outside the Avalon Peninsula selling for more than $1 per litre, operators are bracing for a decline in traffic.
Nick McGrath, the president of Hospitality Newfoundland and Labrador, said fuel prices have the biggest impact on Newfoundlanders travelling in their own province, who account for the bulk of the province's tourists.
"I'd say it's around 60 to 70 per cent, so that's going to have an effect, because those people may consider, 'Well, how far am I going to go?'" McGrath said.
Tourism operators also expect to see higher ferry and airline rates as those companies pass on higher fuel costs.
Trucking and delivery companies expect higher expenses, too, and auto dealerships are expecting to see a drop in sales of larger vehicles.
Provincial coffers poised to swell
However, Patricia Moore, an economist with the Bank of Nova Scotia, said there is a silver lining in higher fuel prices for the province.
"It's good news in terms of government royalty revenue," Moores said.
"And also I know there is a lot of exploration offshore Newfoundland these days, and that's certainly going to benefit from this development."
The provincial government was able to cut its annual deficit dramatically, in large part because of surging oil prices.
INDEPTH: Budget 2005
The government's budget for the current fiscal year is based on an assumption of oil trading at an average of $38 US.
In London early Thursday morning, futures in Brent crude – the type of oil most closely followed by the provincial government – were trading at US $55.83.
Moore said she expects oil prices to stay in the current range, perhaps peaking around $60 later this year.
WebPosted Apr 7 2005 09:19 AM NDT
CBC News
GANDER, NFLD. — Record-high gasoline prices are making tourism operators nervous about the coming summer season.
With regular gas at many areas of the province outside the Avalon Peninsula selling for more than $1 per litre, operators are bracing for a decline in traffic.
Nick McGrath, the president of Hospitality Newfoundland and Labrador, said fuel prices have the biggest impact on Newfoundlanders travelling in their own province, who account for the bulk of the province's tourists.
"I'd say it's around 60 to 70 per cent, so that's going to have an effect, because those people may consider, 'Well, how far am I going to go?'" McGrath said.
Tourism operators also expect to see higher ferry and airline rates as those companies pass on higher fuel costs.
Trucking and delivery companies expect higher expenses, too, and auto dealerships are expecting to see a drop in sales of larger vehicles.
Provincial coffers poised to swell
However, Patricia Moore, an economist with the Bank of Nova Scotia, said there is a silver lining in higher fuel prices for the province.
"It's good news in terms of government royalty revenue," Moores said.
"And also I know there is a lot of exploration offshore Newfoundland these days, and that's certainly going to benefit from this development."
The provincial government was able to cut its annual deficit dramatically, in large part because of surging oil prices.
INDEPTH: Budget 2005
The government's budget for the current fiscal year is based on an assumption of oil trading at an average of $38 US.
In London early Thursday morning, futures in Brent crude – the type of oil most closely followed by the provincial government – were trading at US $55.83.
Moore said she expects oil prices to stay in the current range, perhaps peaking around $60 later this year.