July 29, 2021
When my parents started Eagle Tours in St. Martin, the first boat they bought was a secondhand catamaran. It cost a lot. Everyone celebrated. And then the real bills started showing up - fuel, dock fees, insurance, the mechanic who seemed to live on that boat the first season. Within six months we all understood something nobody had warned us about: the boat was the cheap part. Everything that kept the boat running was what was going to break you.
I have watched a lot of people start tour companies since then. Some made it. A lot did not. In nearly every case where things went wrong, the product was fine. The problem was somewhere in the math nobody ran before signing the slip lease.
These are the seven things I wish someone had told me - and that I tell anyone who asks about starting a tour operation today.
Everyone fixates on the boat, the van, the kayak fleet. I get it. It is the most visible thing. But the asset is almost never what kills you.
What kills you is the operating cost underneath it. Fuel on a busy boat day on St. Maarten can run $300 to $500 easily. Dock fees add up month after month whether you are running trips or not. Liability insurance on a small passenger vessel is not cheap. Then there is crew, maintenance, safety gear certification, marine park fees - the list keeps going.
Before you buy anything, build out 12 months of operating cost. Not just the loan payment on the asset. The real number: fuel, slip, insurance, crew wages, marketing, repairs. That number will be bigger than you expect the first time you run it.
This one is hard for operators to hear, because most people starting a tour company are in love with the experience they are selling. They assume product quality will naturally attract guests. It does not work that way in year 1. In year 1, nobody knows you exist.
Back when I was running SXM Deals, I watched good operators sit empty while less impressive operations filled their boats every week - purely because those operators had figured out how to show up in search, how to work with hotel activity desks, how to get in front of guests before the guests even landed. The product quality sorted itself out through reviews over time. But the marketing had to come first.
Put real budget and real time into your distribution before you launch. Your Google Business listing, your OTA presence, your relationships with local concierges. When the first guests show up, the product can do its job.
I have seen operators cut crew wages to protect margin and I have watched that decision cost them everything. A bad hire who is rude to guests on a Tuesday can tank your review average for the next six months. And a review average below 4.5 is a slow bleed you might not recover from.
The best crew in any market know their value. If you pay market rate, you get whoever is available. If you pay 15 to 20 percent above market, you get the people who are actually good at this - the ones who remember names, who handle the nervous swimmer in the water, who can read a group and know when to go quiet. The crew is your product. Pay for the people. Do not cycle through bad hires trying to save $50 a day.
These three things are where I see the most first-year operators get blindsided.
Insurance. For a small passenger boat operation, expect somewhere in the range of $8,000 to $15,000 per year for liability coverage - and that is a starting point, not a ceiling. Operating without proper coverage is one bad day away from losing everything. Get it before your first paying guest boards.
Cash flow. Guests pay upfront - that part feels great. But your expenses do not care about your booking calendar. Dock fees are due whether January is full or empty. Crew wages are weekly. The slow season is where companies die - not because they have no bookings coming, but because they burned through high-season revenue and did not keep enough runway. Six months of operating expenses in reserve is the number. It sounds like a lot. It is a lot. But it is also what separates the operations that make it to year three from the ones that do not.
Permits. Start the permits before you have the boat. Commercial marine licenses, passenger vessel certifications, port authority clearances, marine park operator permits - depending on where you are operating, you could be dealing with three or four different government agencies, none of which talk to each other. What looks like a six-week process on paper regularly turns into six months in practice. Do not let permits be the thing that holds up your launch date when the boat is already sitting in the marina.
Most tour companies that fail are not bad tour companies. They ran decent trips, got a scattered mix of reviews, never built the social proof required to fill boats consistently, and ran out of cash before the momentum could build.
Your first 50 reviews are not just feedback. They are what your Google listing looks like when a guest searches from their hotel room at 9pm deciding what to do tomorrow. They are what determines whether OTAs surface you or bury you. They are what a hotel concierge looks at before deciding whether to recommend you.
Obsess over them. Ask every single guest before they get off the boat. Have a QR code on the way out, send a follow-up message that night. Respond to every review, good or bad. Those first 50 reviews are worth more than any paid advertising you will run in year 1. Treat them that way.
That is the honest take. I have watched operators with genuinely excellent products - beautiful boats, incredible routes, guests who raved about their experience - still close in year two. Not because they were bad at running tours. Because they did not respect what it actually costs to run the operation underneath those tours.
Operating cost, cash flow, insurance, permits, crew - these are the things the start-a-tour-company articles never focus on, because they are not as exciting as talking about which snorkel spots are the best. But they are what determines whether you are still running trips in three years.
Spend as much time on the business side as you do on the experience side. If you want a booking system that handles payments, reservations, and agent connections without the overhead of software built for someone else's market, take a look at what we built at Junglebee. It was designed by operators who learned all seven of these lessons the hard way.
