Inflation, high fuel prices causing concern in N.S. hospitality industry

Nova Scotia's hospitality sector was upbeat about 2022 after two years of pandemic restrictions.

But that optimism is being challenged by the twin curses of soaring fuel prices and high inflation.

Wes Surrett, chair of the Tourism Industry Association of Nova Scotia and manager of Pictou Lodge, says tourism in the province generates hundreds of millions of dollars in tax revenue that helps pay for the services that benefit all Nova Scotians.

Speaking on CBC's Information Morning Halifax on Thursday, Surrett said the industry remains hopeful for a bumper year despite staffing challenges after many workers were laid off during the pandemic.

Predicting costs

He said rising costs are proving to be an additional hurdle for the industry.

"What we're trying to predict is where these costs are going to go, where food costs are going to land, because a lot of our pricing is done well in advance," Surrett said.

"When you're pricing your rooms for this season and even into 2023 ... you need to do your best to predict where your costs are going to land and somehow manage to price your product to a point where you're not scaring the market off."

Surrett said rising costs for transport and food also need to be factored into salaries for staff if the industry wants to remain attractive for potential workers.

Laila North of Go North Tours, a tour company that specializes in wine tours and customized short trips, said she was excited at the prospect of the industry returning to almost normal.

Now, she said, high fuel and food prices have given her a "feeling of dread."

She said if gas tops $2 per litre she's looking at the prospect of spending $250 every second day.

"We're a seasonal company only running for six weeks of the year, so we have to have enough money to get us through those off-season months as well."

Minimum group sizes

North used to offer tours for two people. But she said that has to go to four or six because of costs.

She said the wineries where she takes her guests are also dealing with rising food costs. When they raise their prices she has to as well because the cost is included in the tour package. 

North set her tour prices in November. Now she has to adjust them.

At the Tulloch Inn in West Lake Ainslie, co-owner Fred MacPhee said he thinks Nova Scotians just want to travel after two years of the pandemic and are willing to accept the cost.

He said many people in Nova Scotia are choosing to vacation in their home province for convenience and to minimize risk associated with air travel. 

He said 94 per cent of the guests at the inn this year have been from Nova Scotia, a noticeable increase over pre-pandemic times. 

Fuel prices

MacPhee said the biggest impact from rising prices for the inn so far has been the cost of fuel for heating. He said tanks that would normally have cost $1,500 to fill are now costing $2,000.

He said rising prices have also been a problem in other areas of the hospitality industry.

"If you are serving the general public meals, breakfast or dinner or lunch, the cost is fairly significant of an increase," he said.

Meanwhile, North fears that the public won't take tours or visit wineries if the cost becomes prohibitive.

She said some tour operators may give up in frustration.

She said uncertainty and lingering pandemic concerns have led to a very slow season for her business this year.

"I've always been a very positive person, so this is a very scary year," North said.