Inflation and staffing are suffocating this Hawaii boat tour company

Earlier this year, Manu Powers’ boat tour company, Sea Quest Hawaii, suffered about $100,000 worth of damage from the Tonga tsunami. The tsunami came as Sea Quest was rebuilding its business, which had dropped 95% in the first year of the pandemic. Marketplace host Kai Rysdal spoke to Powers about how business is doing this summer amid high demand for travel. The following is an edited transcript of their conversation.

Kai Rysdal: How are these days going at Sea Quest Hawaii?

Manu Powers: Business is actually great. We had a lot of tourists in the state. We’re just hampered by the same problem as everybody else, which is, you know, lack of staff.

Rysdal: And I also imagine, you know, just to some degree, that there’s an element of COVID. Because I mean, look, I’m getting ready to go on vacation here and masking everywhere because if I get sick, we’ll cancel the trip and blah, blah, blah. This should happen to you.

powers: This happens to us almost every day. So we had to develop this evolving policy where we try not to punish an individual who may have contracted the virus, but also to protect ourselves. So now we require a clinically applied test and then we offer a partial refund, which is, you know, more than most do. But we try to be as fair as possible in these strange times.

Rysdal: yes I mean cancellations aside are you running at capacity? Or are cancellations keeping you below what you could be doing?

powers: We are operating at about 65% capacity. It’s because of the staff. Again we are sold out days in advance because we are really limiting capacity due to lack of captains. We’re incredibly selective about who we hire, which obviously doesn’t help us. But, you know, we have to maintain a certain standard, and we’re willing to take the financial hit to do it.

Rysdal: Let me ask you a few business questions. First, inflation, that’s the story. Gas is a core function of your business. I don’t know if you run diesel or special boat fuel or whatever, but it must be killing you.

powers: It is. We try to run the cleanest engines possible. And for the first time in history, our bi-monthly gas bill hit five figures. When I opened the email, I gasped out loud. The bottom line is that inflation eats directly into the profit margin. But that’s just not something we want to convey to customers, so we’re willing to take that hit and just be incredibly careful during this time.

Rysdal: You shouldn’t take business advice from me, but this doesn’t seem like a good deal in the long run, you guys take the hit, right?

powers: Yes I agree with you. It’s not, and so we’re revisiting the thing that you and I have talked about many times, which is diversifying, but yeah, it’s killing us. It’s food, it’s gas, it’s labor. The housing shortage here in Hawaii is incredible. And it’s the most expensive state to live in. So we had to give our employees a lump sum raise because it’s the right thing to do. So yes, we are extremely hurt.

Rysdal: So look, we’ve been talking about something for maybe a couple of years anyway. And it seems to me that every time you beat your head against the wall about something. So this question is coming from someone who doesn’t have the entrepreneurial spirit, right, which obviously you and your husband run the business together, obviously the two of you do. But have you ever just said, “Shit, we’re done. I can’t take it anymore, I’m going to raise goats or whatever.

powers: It’s weird that you should bring that up because we actually recently sold our home that we held onto so hard during the pandemic. It was an emotional day. But we went ahead and bought a farm with some goats, lambs and chickens. Here is a real zoo. And that, you know, doesn’t even count my own children. So, yes, we are trying to find a more independent lifestyle. Every day is a challenge. But we’re going to keep going because it’s a good product and it’s something we can wake up to and feel good about. It’s not snake fat.

There’s a lot going on in the world. Through it all, Marketplace is here for you.

You rely on Marketplace to break down world events and tell you how they affect you in a fact-based and accessible way. We rely on your financial support to continue to make this possible.

Your donation today powers the independent journalism you rely on. For just $5/month, you can help keep Marketplace going so we can keep reporting on the things that matter to you.

Leave a Comment