By Kaori Kaneko and Joseph Campbell

TOKYO, March 31 (Reuters) - A few dozen tourists hopped onto a small cruise boat in Tokyo to admire the cherry blossoms lining the Meguro River -- a seasonal attraction that could soon become costlier for passengers and operators alike.

The pink and white flowers that blossom in spring on cherry trees across Japan are a major draw for locals and tourists -- and big business for companies such as cruise operator Tokyo Waterways. The "flower viewing" or "hanami" is the peak season of the year.

This year, though, Tokyo Waterways CEO Kazuyoshi Harada is not so upbeat because the Middle East conflict has pushed up fuel prices just as his demand is rising.

"Since fuel consumption for us peaks during the busy cherry blossom season, the price hikes have been particularly hard on us," he said.

Most customers booked their hanami-season cruises before the crisis, so raising ticket prices from 5,000 yen ($31) was not an option, he said.

Since the U.S.-Israeli attacks on Iran, the price of premium gasoline has surged by 20 yen per litre, or about 9%, likely adding more than 100,000 yen in expenses for the season, Harada said.

Fuel and labour costs had been on the rise even before the conflict began on February 28, and Harada's company had in January raised the ticket price on chartered cruises by 10%.

Still, more price hikes may be unavoidable if the conflict persists, he said, noting that cruise ships had not benefited from the government's subsidies to ease gasoline costs for cars.

The weak yen has also compounded rising prices from global inflation.

"We spent about 30% more on the hanami season (this year) as various costs have risen," said 46-year-old Rintaro Tada, who took the 70-minute river cruise with his mother after lunching at a riverside restaurant. ($1=159.70 yen)

Posted by: Alma Angeles/NET25 News