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Loss of "Cat" Takes a Bite Out of Maine Tourism

December 21, 2009 - PORTLAND -- A ferry operator's decision to cancel service between Maine and Nova Scotia will strike a blow to the tourism industry on both sides of the Gulf of Maine, government officials and business leaders said Friday.

Bay Ferries Ltd. announced Friday that the loss of a government subsidy has forced it to end service by the high-speed ferry The Cat, which connected Portland and Bar Harbor with Yarmouth, Nova Scotia.

It's too soon to tell whether the shutdown will end the 40-year ferry link between Yarmouth and Portland and the 50-year link between Yarmouth and Bar Harbor, transportation officials said.

"We are in shell shock right now," said Dave Whiting, general manager of the Port of Yarmouth and the Yarmouth Area Industrial Commission.

Mark MacDonald, president and chief executive officer of Bay Ferries Ltd., said he made the decision after being informed earlier in the week that Nova Scotia's government would not subsidize the service next year.

"We are not, as a private company, in a position to bear the range of final losses you would have to bear to maintain the business," he said.

About 20 people in Portland and 20 more in Bangor will lose their jobs, along with 80 others in the company.

The cancellation will cost the city of Portland about $100,000 a year in annual fees.

Less than two years ago, the city and the state opened the $20.5 million Ocean Gateway terminal to serve the ferry and provide a second pier for cruise ships. The city has $280,000 a year in debt payments for the project.

The ferry's annual fees to the city, based on the number of passengers, accounted for half of the $201,000 in income projected for Ocean Gateway in the fiscal year that began July 1.

City Manager Joe Gray said city and state officials will meet as soon as possible to discuss strategy for replacing the ferry service.

Friday's news sent tour companies scrambling to fill a breach in their summer schedule. The high-speed ferry allowed the companies to market Maine and Nova Scotia as a "two-nation vacation."

The companies will try to persuade people who have already bought tour packages to instead buy land-only packages to Maine or fly directly to Nova Scotia, said Debbie Weinstein, owner of Heritage Group Planners, a Massachusetts company that sells New England tours. Most people will probably just cancel their trips, she said.

The ferry service saved people from driving the 740 miles between Portland and Yarmouth. Most people who come to Maine from outside New England won't want to spend two more days on the road to get to Nova Scotia, Weinstein said.

The Cat, traveling as fast as 55 mph, took only 5 1/2 hours to go between Portland and Yarmouth.

The cancellation was bad news for Portland's hotels, particularly downtown. Because of the ferry schedule, most passengers stayed overnight in Portland when traveling to Yarmouth or coming back to Maine.

"It's the news we don't need," said Gus Tillman, director of operations for the two Holiday Inns in Portland. "We are all struggling now in the economy, and this is going to add to the hurt we are going to feel this coming summer."

Bay Ferries Ltd. took over the service between Bar Harbor and Yarmouth in 1997, and between Portland and Yarmouth in 2006, providing service several days a week from May to October. It replaced the service provided by Scotia Prince Cruises and its stately Scotia Prince.

MacDonald said his company operated without a subsidy for nine years, but could no longer do so when it added the Portland-to-Yarmouth run. That year and the next, it received $1.25 million in government subsidies to keep it running. Last year it received $5.65 million.

MacDonald said the jump in fuel costs in 2008 and the slumping U.S. economy took a toll on the service. A strengthening Canadian dollar made Canada less attractive to American tourists, as did the new requirement this year that all American visitors to Canada hold passports.

This year, 76,000 passengers rode The Cat between Nova Scotia and Maine, down 10 percent from 2008. At its peak in the late 1990s, the service carried as many as 150,000 passengers a year.

MacDonald said the company will look for a new route in another part of the world for The Cat, which it bought new for $80 million in 2002. The 319-foot-long catamaran carries as many as 900 passengers and 240 vehicles.

In Bar Harbor, tourism officials were stunned by the loss of the high-speed ferry.

"The Cat has been a big part of the tourism industry. A lot of people come up from Boston and stay the night before heading to Yarmouth," said Chris Fogg, executive director of the Bar Harbor Chamber of Commerce.

Fogg and other tourism officials could not immediately calculate the potential financial loss.

Yarmouth officials were coming to terms with having no ferry service for the first time since the 1800s. The only international flight directly linking Yarmouth to New England, at the Portland International Jetport, was canceled last month.

Starlink Aviation started its twice-daily service in February, and canceled it after it lost its government subsidy.

Whiting said Yarmouth officials met Friday to figure out what to do. He said the first step will probably involve trying to persuade the provincial government to reverse its decision on subsidies.

The prospect of another company stepping in to replace the service is not good in the present economy, said Christopher Wright of the Mariport Group Ltd. in Digby, Nova Scotia, a consultant to ferry companies around the world.

He said a smaller ferry, operating just between Yarmouth and Bar Harbor, would be more financially viable.

Wright said it will all boil down to how valuable the service is to its potential users and how much they are willing to pay.

"You have to find a way of getting your occupancy up to 60 to 70 percent and find the price points passengers will accept," he said.

By BETH QUIMBY, Staff Writer, Portland Press Herald, December 19, 2009


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