Aug. 4, 2003 – If Boston Harbor Cruises decides not to resume V.I. Fast Ferry operations between St. Croix and St. Thomas in the coming season, it would probably send the high-speed, 600-passenger catamaran to Florida or keep it in the Northeast for the winter, a company official said Monday.
But, Kevin Matthews, BHC operations director added, "We sank so much money in the Virgin Islands, that's not what we want to do." He added, "First and foremost, we want to be back come November or December."
Nonetheless, dwindling ridership and higher taxes have left company officials unsure about returning the Salacia for a third tourist season in the territory.
According to Matthews, V.I. Fast Ferry incurred losses of nearly $250,000 last season.
Further, he said, Boston Harbor Cruises has invested about that much more in the docking facilities it utilizes at Gallows Bay on St. Croix. "Walking away from that would be a huge financial blow," he said. "It's something we don't want to do."
Matthews said several factors, including poor national and local economies, accounted for last season's heavy losses. He said the sporadic operations of Mermaid Ferries, a locally owned company that started competitive service but went under before the season ended, could have biased some would-be Fast Ferry riders.
But he says the deciding factor in whether the Salacia returns for the coming season probably will be whether the Port Authority proceeds with plans to double the ferry passenger head tax to $3 from the $1.50 that applied last season.
VIPA exempted V.I. Fast Ferry from the head tax for the first year of operation. "Our ultimate goal is keeping pricing as low as we can possibly keep it," Matthews said. Any increase in the head tax, he said, would have to be passed on to consumers.
"Our prices have to go up, best case scenario, by at least $3," he said, "and I don't see that as being advantageous to us or to our customer base."
The roundtrip fare last season for adults was $60, making family visits between the islands affordable, Matthews said. Ferry service has traditionally made trips possible for people who might not be able to afford more expensive modes of travel, he said.
Matthews said company officials have been waiting to talk to VIPA officials for a few months regarding the head tax, but they may be forced to make alternate plans. He said a decision will be made by Aug. 15, one way or the other. He added that even if VIPA does not double the head tax, returning to the islands may not be economically viable.
VIPA's executive director, Darlin Brin, was unavailable for comment Monday.
Matthews said BHC sends the Salacia to the Virgin Islands each year with a goal of breaking even but with the expectation of losing money. The vessel is most profitable during the summer on its run between Boston and Provincetown, Massachusetts, he said.
In 2001-02, its first full season of operation in the Virgin Islands, losses "were minimal," Matthews said. But last season's were so significant that the Salacia's summer route was unable to cover them, he said.
Ironically, one advantage inter-island travelers have enjoyed since ferries began running between St. Croix and St. Thomas is reduced fares aboard Seaborne Airlines seaplanes. That company lowered its airfares to contend with the competition, its chief marketing officer, Omer ErSelcuk, said.
"We plan to keep our prices low," whether the ferry comes back or not, ErSelcuk said. "When the ferry got here, we got accused of having too high fares, so we reacted to save our market share, and it actually stimulated our market."
He noted that Seaborne is about to add as many as 10 flights a day to its schedule in the late fall, increasing the number of discounted seats available. Roundtrip Seaborne fares range from $80 to $135.
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