Why Does Explorer Ventures Still Have a Fuel Surcharge?

To us, imposing a fuel surcharge at a time when the price of a barrel of oil averages $56 (just one-third what it was during the $163 "Peak Oil" scare 11 years ago this month) is rather like a hotel charging a resort fee on top of the cost of the room rate. Back in March 2016, we covered the subject of fuel surcharges on liveaboards and found that Explorer Ventures was one of the few companies still regularly charging -- $200 per passenger -- for what was meant to be a temporary measure. And it's still doing so. OK, the surcharge our Caribbean Explorer II writer paid has decreased to "only" $80, but still.

Back in 2016, Explorer Ventures CEO Clay McCardell explained it thus: "Fuel cost is a difficult issue, since it is often our largest single expense and is highly variable. When we budget operational costs, we can plan on fairly predictable increases in most of our costs, but fuel is a wild card. Instead of charging a higher package price across the board, we set our package prices based on an average fuel budget for the year, and then use the flexibility of the fuel surcharge in order to try to meet that budget. That helps us to guarantee reasonable package pricing a minimum of 12 months in advance (often longer), with the understanding that the surcharge can and will vary depending on local fuel costs up until 30 days prior to the trip."

Then he added, "If oil prices remain stable and the Caribbean catches up with the USA, I'd anticipate a reduction of the fuel surcharge to zero soon."

Well, oil prices have been pretty stable, and we haven't heard about any Caribbean oil crisis, so what gives?

McCardell's reply to us in 2019 offers the same justification for the fuel surcharge, which he says has recently ranged from zero to $160 per person. "Yes, fuel prices have gone down from their peaks -- so have our surcharge levels, which again are reevaluated monthly based on actual fuel prices. Local fuel pricing often depends on factors other than world oil prices, and in some areas only vaguely follows what people may see at pumps in the U.S."

"No matter who people choose to travel with, they will be paying for the vessel's fuel one way or another. Either it's included in the price, which means the operator is assuming the worst-case cost for fuel and keeping the difference if the price is lower, or it's separated out, as we do, to let us keep our package prices in line. We feel our method is fairer and costs the client less."

A candid, straightforward response. But where do you draw the line? If the cost of produce goes up, will Explorer Ventures add a food surcharge? If its insurance goes up, does it add a surcharge for that?

With new sources of oil being discovered worldwide, and slumping global economies fighting off recession, demand for oil is below expectation. So we're not buying the "fuel as a wild card" factor, Explorer Ventures. Anticipate market fluctuations well and you make money. Don't read the financial winds correctly, and you take it in the shorts. It's called "the cost of doing business."

And while at least the company openly calls it a fuel surcharge, it seems like a bad business practice to charge a fee that's totally unnecessary at a time when there's no oil crisis anywhere.