Aye Aye captain! Shares in Sealink Travel Group Ltd (ASX: SLK) sailed 7 per cent higher this morning to a record high of $4.35, with the stock now up around 160% over the past two years on the back of consistently strong earnings growth.

The seafarer operates the Captain Cook cruises on Sydney Harbour, Kangaroo Island ferry in South Australia and other maritime routes on the backpacker trail in Queensland and the Northern Territory.

The group posted underlying earnings of $8.7 million on underlying revenues of $59.2 million for the six-month period ending December 31 2015. The underlying earnings and revenue were up 23% and 4.3% over the prior corresponding period.

Tailwinds include a falling diesel bill and booming tourism

The earnings growth rates demolished the revenue growth rates in part thanks to the group’s tumbling fuel bill in operating its diesel-guzzling ferries. Plunging oil prices have helped lift margins by slashing costs, although investors must be wary of the prospect of a medium term recovery in global energy prices that is also impacting the outlook for airlines like Qantas Airways Limited (ASX: QAN).

The other tailwind enjoyed by travel and leisure businesses recently and likely to grow strongly in 2016 is the growth in tourism as the effects of the Aussie dollar’s plunge flow through into the services economy. Wherever they are in the world tourists are generally considered fair game for some eye-watering prices, and with the falling dollar increasing the relative spending power of overseas visitors a little margin gouging on sight-seeing cruises supported by growing passenger numbers is a heady growth cocktail.

Land Ahoy!

SeaLink adjusted the underlying results to exclude the acquisition of the Transit Systems marine business that completed on November 6 2015, and stated that the second half of the financial year has started well, with all operations performing ahead of projections for January. The group then is expecting a strong calendar year 2016.

Have you missed the boat?

The seafarer posted underlying earnings per share of 10.4 cents in the most recent half, which places the group on an annualised 21x estimated earnings when selling for $4.35. The tourism sector looks likely to remain strong throughout 2016, although the group is now priced to grow strongly and ferry operators have few competitive advantages and relatively high costs of capital.

Today’s investors then are at risk of ending up underwater, unless the group delivers exceptional operating performance in the year ahead.

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Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.