20/12/2013 - 10:51

Charter 1 out in snorkel stoush

20/12/2013 - 10:51
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Snorkel tour and boat charter operator Charter 1 has locked horns with the Rottnest Island Authority, claiming it was squeezed out of the popular holiday island in favour of another operator, forcing it to restructure its business.

MAKING WAVES: Matt Oakley with Charter 1's flagship catamaran, Capella. Photo: Attila Csaszar

Snorkel tour and boat charter operator Charter 1 has locked horns with the Rottnest Island Authority, claiming it was squeezed out of the popular holiday island in favour of another operator, forcing it to restructure its business.

Charter 1, which also runs boat charters from Fremantle, had been operating daily snorkel tours from the main jetty at Rottnest Island since 2010, under a three-year lease agreement.

Owner Matt Oakley said about 2,000 people took the Charter 1 snorkel tour each year, and it was ranked the number one attraction on Rottnest by international travel site tripadvisor.com earlier this week.

“Rottnest Island was just something we did because nobody else was doing it,” Mr Oakley told Business News.

“You hear people complain about Rottnest, saying there aren’t enough things to do, but there actually are things to do, these guys [the RIA] are just shutting them out.”

The authority denies it has favoured any individual business, believing it bent over backwards to accommodate the marine tour operator.

Mr Oakley said he attempted to negotiate a new contract with the RIA about 12 months ago, as the company’s lease was due to expire at the end of last summer.

He said no response was forthcoming until he received an expression of interest for snorkel charters via email in September.

In response to written questions from Business News, a spokesperson for the RIA said the campaign was sent out to 27 different tour operators, with Charter 1 subsequently being offered a concessional lease agreement. 

According to Mr Oakley, the new agreement included an increase of fees from between $2,500 and $3,000 per year to more than $20,000, as well as berthing restrictions, which included not being able to use the island’s main passenger jetty.

The RIA spokesperson said the new offer provided additional operational scope to Charter 1, but would not provide any further details, citing commercial confidentiality.

The arrangement, which was for a fixed term of five years, also did not include exclusivity provisions or exit clauses if another operator began offering snorkel tours on the island.

Despite the lack of an exclusivity clause, Mr Oakley claims he was assured when negotiating the new lease there would not be any other snorkel operators at Rottnest over the term of the agreement.

However ferry and tour operator Rottnest Express launched a new snorkel tour from the island’s main jetty at the start of the month, with tour sales agents, including the Fremantle Visitors Centre, having been aware of the offering for several months.

Rottnest Express had not responded to enquiries by Business News at the time of publication, while the RIA declined to comment when asked how long the ferry operator had been planning snorkel tours.

“It’s hard to compete with Rottnest Express, but when the RIA makes things harder that puts us even more behind the eight ball,” Mr Oakley said.

“The main jetty at Rottnest holds a huge commercial advantage because you’re the first boat visitors see when they arrive.

“Had we have known of Rottnest Express’s intentions, we probably wouldn’t have even replied to the EOI.”

The authority has subsequently stated that it did not offer any business exclsuivity and that Charter 1 could have had a position on the main jetty but that would have come at additional cost.

Mr Oakley said he had since restructured his business, on which he estimates he has spent $600,000 during the past three years, to operate Rottnest snorkel tours out of Fremantle, as well as tours from Fremantle to nearby Carnac Island.

The investment included purchasing a new vessel, with the intention of having a seven-days-a-week presence on Rottnest and running small, customised tours.

“But we can’t do that from the mainland,” Mr Oakley said. “From the mainland, Rottnest tours have to fit in with our other operations.

“So now we encourage most of our groups to go to Carnac Island instead.

“There are no fees, there’s still good snorkelling and you get more time at anchor because its closer.

“However, Rottnest is iconic and people have been going there for a long time.

“We still love the place ourselves; it’s the politics and the administration of it which stinks.”

After publication of this article, the authority contacted Business News to expand on its earlier answers. RIA chief executive officer Paolo Amaranti said that Charter 1 was treated fairly, that a tender process was appropriate under the circumstances, that no operators at Rottnest have exclusivity and that the authority believed it had been generous in attempting to accommodate the business's needs.

"Negotiations between the RIA and Charter 1 have taken place over some months, resulting in the Concessional Lease offered to them.  The fees are concessional in view of seasonality of their operations, and in line with what they have been paying," Mr Amaranti said.

"The offer includes where commercially possible assistance for Charter 1 as a small operator.  This includes granting a permanent berth on the fuel jetty at their request and at a concessional rate.  There is however a fee for this which is part of the increased charges they are contesting. The remainder of the charges relate to a bond which is payable by any lessee operating within the A Class Reserves.  

"A  permanent berth on the Fuel Jetty requires the use of an alternative vessel to Capella which is too large for this purpose. 

"In line with all other charter vessels operating in the Marine Reserve, Capella has  20 min drop off and pick up access to the fuel jetty at no charge.

"Berthing rights on the main jetty however attract an annual fee, payable by all commercial vessels but which Charter 1 is not prepared to pay.

"In relation to their complaint that they are being “squeezed out” by other operators offering snorkel tours, the RIA has a strict policy of not granting exclusive rights on Rottnest Island.  This is clearly evident in the EOI document and in correspondence with Charter 1."

 

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