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Hong Kong Star Ferry needs rescue plan as tourism drops

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Hong Kong Star Ferry needs rescue plan as tourism drops
Hong Kong Star Ferry needs rescue plan as tourism drops

A star ferry crosses the Victoria Harbour in Hong Kong on Aug 22, 2021. (Photo: AFP/Bertha WANG)

HONG KONG – The Star Ferry is facing financial difficulties. It’s an iconic Hong Kong landmark and the most well-known ferry ride in the world. In typical Hong Kong fashion, the only way to save the Star Ferry is for billionaires and shoppers.

The 142-year-old ferry, which transports passengers across Victoria Harbour from Hong Kong island to the Kowloon mainland, is seriously indebted. The Star Ferry Company saw a loss of more than HK$70 million (US$8.9 million) since mid-2019 when mass protests erupted in the city, according to a company statement in March. Its two ferry routes recorded 1 million passengers in the first two months of the year — just 27 per cent of the level in 2019.

” “At the moment, I don’t dare be optimistic that Star Ferry will survive this wave of blows,” said General Manager David Chow in the statement. To get by, the company relies on only loans. This includes to hire employees.

These operation statistics might indicate an impending collapse of an ordinary business, but Star Ferry is likely to survive thanks to the support of a billionaire family with its retail ambitions and the deep affection in the city to an institution many will mourn the loss.

Hong Kong’s famous Star Ferry’s sit idle in Hong Kong on Mar 14, 2022, as services are reduced during the city’s worst-ever Covid-19 coronavirus outbreak. (Photo: AFP/Peter PARKS)

The Star Ferry Company is owned by property developer Wharf Holdings, which operates the ferry on a 15-year franchise granted by the government. The Star Ferry Pier in Tsim Shui is one of Hong Kong’s most popular shopping areas. It can be found just minutes away from Harbour City.

Pre-pandemic, many tourists would ride the “must-see” Star Ferry from Hong Kong island and make their way toward the shopping center that has everything from Uniqlo and Lululemon to Hermes and Chanel.

Wharf is owned by the family of Peter Woo, Hong Kong’s fifth-richest man with a net worth of US$18 billion, according to Bloomberg data. According to Bloomberg Intelligence’s real estate analyst Patrick Wong (another Bloomberg Intelligence member), keeping Star Ferry in business is vital for the company’s retail goals and something it will not easily lose. The business makes up a very small portion of Wharf’s total portfolio.

The Star Ferry was started in 1880 by a Parsee entrepreneur from India who launched a ferry service across Victoria Harbour with a steamboat. Later, Catchick Paul Chater bought it and developed the Star Ferry Company. Since then, it has been an integral part of Hong Kong’s collective history. It bears witness to many pivotal moments which helped define the city.

A usually busy Star Ferry crossing Hong Kong’s Victoria Harbour is seen almost empty on Feb 21, 2022, as the city faces its worst Covid-19 coronavirus wave to date. (Photo: AFP/Peter PARKS)

In 1966, the Star Ferry, which was the only cross-harbour form of transport at the time, raised its fare. This backlash led to days of unrest in British colonies.

Four decades later, the government’s decision to tear down the Central Pier, located near the main financial structures of the city, set off sit-ins, hunger strikes, and a public outcry. It is often credited for reviving interest in local identity, and inspiring a new generation. The new Central Pier is still criticized by many for its inconvenient location and its gaudy aesthetics.

The idea that Star Ferry’s survival depends on the success of a wealthy developer and Chanel handbags may not be the ideal outcome for such an iconic institution. However, Hong Kong’s heritage conservation efforts are often relegated to the realm of development and a few wealthy tycoons can make a profit from them.

Some examples include 1881 Heritage, a former marine police headquarters near the Star Ferry in Tsim Sha Tsui built in a Victorian style, which now contains a hotel and shops such as Van Cleef & Arpels and is owned by Hong Kong’s richest man Li Ka-shing. Adrian Cheng, a conglomerate New World Development tycoon bought the oldest theatre in Hong Kong. He plans to save the structure, but the area behind it will become apartment blocks.

The Star Ferry Company did not respond to our request for comments about their operation plan.

One of the passengers sitting on the left takes a picture using a mobile phone as they sail through Victoria Harbour on the Star Ferry in Hong Kong on Jan 23, 2022. (Photo: AFP/Louise Delmotte)

Getting more residents to take the Star Ferry is also crucial at a time when continuing COVID-19 restrictions mean that tourism in Hong Kong remains at a standstill — and looks like to stay that way for some time. While almost all of the passengers on this ferry were tourists before the pandemic struck, that number was nearly half.

A Star Ferry might be able get people back on its boats. It taps the growing interest in local history, nostalgia wave and may even attract more Hong Kongers to embrace homegrown symbols of identity as markets amid deeper political turmoil.

Wong believes Star Ferry released a public statement about its financial difficulties to increase awareness and spur demand.

People commute on a Star Ferry across Victoria Harbour in Hong Kong on Apr 13, 2022. (Photo: AFP/DALE DE LA REY)

Though COVID-19 damped demand for the Star Ferry as more people stayed at home and cultural events held at arts venues near the Tsim Sha Tsui pier were put on hold, the ferry still draws commuters and residents looking for a respite from their daily lives. Although it’s slower than the subway system, many choose to take the eight-minute scenic ride for US$0. 50, if time permits.

The Star Ferry Company’s current franchise ends in 2033 — that’s long after COVID-19 restrictions will be gone and tourists will have returned to the city. Its financial crisis highlights the importance of diversifying away from tourists and putting residents first.

“The Star Ferry is stuck in that small hole, where they rely only on tourists,” stated Matthew Ng from Canada who was working on a Star Ferry photography project. “They have not adapted to locals.”

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