Premier Receives Ferry Report / Province Commits to New Yarmouth Ferry Operation

The province will commit to a new cruise ferry operation for Yarmouth and will seek partners in the venture to revitalize the southwest Nova Scotia economy and bring more U.S. visitors to the province.

An independent report received by Premier Darrell Dexter today, Sept. 7, suggests that a sustainable ferry operation between Yarmouth and Maine is achievable, but will require a different business model than in the past.
The definitive report, developed by a panel of experts appointed in April, suggests a cruise ferry model operating between Yarmouth and Portland, focusing on passengers' on-board experience, could be commercially sustainable.
"I want to recognize the extraordinary efforts made by the panel members to develop this very credible report," said Premier Dexter. "Their work is a credit to the people of southwest Nova Scotia, and provides clear direction for government as we work towards a sustainable ferry service."
The report indicates that a successful ferry operation will require a $30-million to $35-million front-end investment by government partners, to:
-- repair and refurbish the federally owned Yarmouth terminal facilities
-- provide a portion of start-up funding for baseline research, advertising and certain costs related to vessel acquisition and financing
-- to cover early years of operating losses
The report indicates the success of a commercially viable ferry hinges on being able to build passenger traffic back to 130,000 to 135,000 passengers per year.
A financial projection in the report suggests the operation could break even around the seventh year and achieve modest profit after that, although greater upside would be possible if more passengers could be attracted. To achieve that, a wider marketing strategy would be needed to market to U.S. tourists, and enhance the tourism product in southwest Nova Scotia.
"I believe the panel has fulfilled its mandate to provide the government with the evidence and business analysis it needs to reach a decision on a potential ferry between Yarmouth and Maine," said panel chair Dr. Peter Nicholson. "In doing so, we have benefited greatly from other highly competent studies over the past two years."
Dr. Nicholson is the former president and CEO for the Council of Canadian Academies. Other panel members were: Michele McKenzie, president and CEO of the Canadian Tourism Commission; Elizabeth Beale, president and CEO of the Atlantic Provinces Economic Council; and Peter Wild, a U.K.-based consultant specializing in the operation of ferries and tourism. Professor Mary Brooks, from the Dalhousie School of Business Administration, led a team from Dalhousie University that provided research and organizational support for the review.
The full report and panel member bios are available at .
The province will commit to a new cruise ferry operation for Yarmouth and will seek partners in the venture to revitalize the southwest Nova Scotia economy and bring more U.S. visitors to the province.
Premier Darrell Dexter today, Sept. 7, accepted the report from an expert ferry panel appointed in April. The report lays out the conditions under which a successful and profitable ferry service from Maine to Yarmouth can operate.
"I have said all along that the province would support a ferry service that could stand on its own, a service that could be successful and profitable," said Premier Dexter. "We now know that ferry could exist, with the right business model and the right partners."
The report illustrates the decline of the previous ferry operation due to decreased ridership and increased fuel costs. By 2009, Nova Scotians were covering the ferry's losses of almost $7 million annually.
However, the report indicates that a successful and profitable ferry service is possible with an operator who has a sophisticated marketing strategy, who can leverage a strong tourist experience in southwest Nova Scotia and provide a high-quality on-board experience for passengers.
Based on the conditions outlined in the report, the province is prepared to commit up to $21 million over seven years for a new cruise ferry operation in Yarmouth.
Over the coming weeks, the province will put out a call for expressions of interest for potential private-sector ferry operators and will begin discussions with the federal government, business and municipal leaders in southwest Nova Scotia, and stakeholders in Maine.
"The province cannot do it alone this time," said Premier Dexter. "For this new Yarmouth ferry to work, the federal and municipal governments will need to come to the table, and businesses and residents of southwest Nova Scotia will need to throw their support behind it.
"Nova Scotia now has a plan for a successful, profitable and stable ferry service that can carry 130,000 people every year through southwest Nova Scotia. Now the work must begin to turn the vision in this report into reality."
The panel report estimates there will be about $5 million in start-up costs for baseline research, advertising, vessel acquisition and financing, and roughly $21 million will be needed to cover early years operating losses.
A federal government study indicates that up to $13 million would be needed to repair and refurbish the Yarmouth terminal facilities, owned by the federal government.
With these investments in place, the panel report suggests that a new Yarmouth-Maine cruise ferry business could break even around the seventh year and achieve a modest profit after that.
The full ferry panel report is available online at .
Source: Release
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