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Despite travel rebound, inflation and staffing continue to limit this Hawaiian tourism business

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A snorkeler passes over a school of fish

Inflation is affecting the price of gas, which has significantly cut into the profit margins of Sea Quest Hawaii Donald Miralle/Getty Images

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Early this year, Manu Powers’ boat tour company, Sea Quest Hawaii, sustained about $100,000 worth of damage from the Tonga tsunami. The tsunami came as Sea Quest was rebuilding business dropped 95% during the first year of the pandemic. “Marketplace” host Kai Ryssdal spoke with Powers about how business has been this summer amid high demand for travel. The following is an edited transcript of their conversation.

Kai Ryssdal: How’s business at Sea Quest Hawaii these days?

Manu Powers: Business is actually really great. We’ve had a lot of tourists to the state. We’re just hindered by the same problem everyone else is, which is, you know, a lack of staffing.

Ryssdal: And I also imagine, you know, just to some degree that there’s a COVID element. Because I mean, look, I’m getting ready to go on vacation here, and I’m, like, masking everywhere because if I get sick, we’re gonna cancel the trip, and blah, blah, blah. That has to happen to you.

Powers: That happens to us, almost daily. So we’ve had to sort of work out this evolving policy where we’re trying not to penalize an individual who may have contracted the virus, but also to sort of protect ourselves. So now we’re requiring a clinically administered test, and then we’re offering a partial refund, which is, you know, more than most are doing. But we’re trying to be as fair as we can during these strange times.

Ryssdal: Yeah. I mean, cancellations aside, are you running at capacity? Or are the cancellations keeping you below which you could be doing?

Powers: We’re running at about 65% capacity. That’s because of staffing. We’re sold out days in advance, again, because we’re limiting capacity due to a lack of captains, really. We’re incredibly selective about who we hire, which isn’t helping us, obviously. But, you know, we have to maintain a certain standard, and we’re willing to take the financial hit in order to do that.

Ryssdal: Let me ask you a couple of business-y questions. First of all, inflation, it’s the story. Gas is an essential function of your business. I don’t know if you run diesel or special boat fuel or what, but it’s gotta be killing you.

Powers: It is. We try to run the cleanest engines we can. And for the first time ever, our gas bill, which comes bimonthly, hit five figures. When I opened up the email, I gasped out loud. The bottom line is inflation cuts directly into the profit margin. But it’s just not something we want to pass off to the customers, so we’re willing to take that hit and just be incredibly mindful during this time.

Ryssdal: You should take no business advice from me, but that doesn’t seem tenable over the long haul, you guys taking the hit, right?

Powers: Yeah, I agree with you. It’s not, and so we revisit the thing that you and I have talked about on multiple occasions, which is diversifying, But yeah, it’s killing us. It’s food, it’s gas, it’s labor. The shortage of housing out here in Hawaii is unbelievable. And it’s the most expensive state to live in. So we had to give our employees an across-the-board raise because that’s the right thing to do. So yeah, it’s hurting us tremendously.

Ryssdal: So look, we’ve been talking off and on what probably a couple of years anyway. And it seems to me that every time you are banging your head against the wall about something. So this question comes from a guy who does not have the entrepreneurial spirit, right, which clearly you and your husband, you run the business together, clearly you two do. But has it ever occurred to you to just say, “Screw it, we’re done. Can’t do this anymore, I’m gonna go raise goats or whatever.”

Powers: It’s funny that you should mention that because we actually sold our home recently that we had struggled so hard to hold on to during the pandemic. It was an emotional day. But we went ahead and bought a farm with some goats, lambs and chickens. It’s a veritable zoo around here. And that, you know, isn’t even counting my own children. So, yeah, we’re trying to find a more self-sustaining lifestyle. It’s a challenge every day. But we’re going to keep going because it’s a good product, and it’s something we can wake up and feel good about. It’s not snake oil.

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