Explainer: how Hong Kong’s low-cost Star Ferry will keep itself current for the future

City’s iconic form of public transport has secured another 15 years of operation

PUBLISHED : Thursday, 15 March, 2018, 10:02am
UPDATED : Thursday, 15 March, 2018, 2:15pm

On Tuesday, Hong Kong’s iconic Star Ferry was guaranteed to be able to continue providing trips for tourists and residents for the next 15 years, as its operator was granted a new set of franchise rights. Star Ferry Company will continue running eight ferries between Central and Tsim Sha Tsui, as well as Wan Chai and Tsim Sha Tsui, until March 31, 2033. But the 120-year-old operator had to promise a series of measures to upgrade its service.

Q: What’s the Star Ferry?

The Star Ferry is Hong Kong’s oldest form of public transport, taking passengers across Victoria Harbour between Hong Kong Island and Kowloon. It costs HK$2.70 to HK$3.70 for a cross-harbour trip, which is 56 per cent to 72 per cent cheaper than rail or bus fares. 

Star Ferry traces its origins to 1880 when Dorabjee Naorojee Mithaiwala, a Parsee cook, began a ferry service across the harbour with his steamboat, the Morning Star. The fledgling service was known as the Kowloon Ferry Company

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During the next 10 years, businessman Sir Catchick Paul Chater bought all the company’s boats and in May 1898 the Star Ferry Company, as it is known today, became a public company.

Apart from being a heritage icon, the ferry plays a vital role in linking the downtown areas with tourist hotspots and promenades. However, there are now concerns over how the oldest form of public transport in Hong Kong can sustain itself and keep up with the times. 

Q: How will the ferry modernise itself and improve its services? 

As the government seeks to improve the environment in the area, the company has pledged to fork out HK$56 million to retrofit eight ferries with a low-emission propulsion system and a new exhaust system that would reduce emissions by 75 per cent and cut petrol use by 8 per cent. It also said it was willing to consider introducing electric ferries.

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It will also offer free Wi-fi service in waiting areas at the piers from next month. Staff training would also be strengthened to improve standards in English and Mandarin. The company also vowed to continue exploring how its services could be diversified to attract more tourists.

Q: What are the challenges facing Star Ferry and how it will tackle them? 

The Star Ferry’s trips across Victoria Harbour are regarded as an important part of the commuter system, and an essential excursion for tourists. National Geographic Traveller put the crossing in its list of 50 places of a lifetime. It’s also well known as one of the world’s best value-for-money sightseeing trips. Some 53,000 passengers travelled each day on the ferry between 2008 and 2016, and the operator took an average annual profit of about HK$4 million, with a profit margin of 4.1 per cent. However, things were not always plain sailing. In mid 2016, the operator applied to raise adult fares between 23.5 per cent and 30 per cent in two phases over the next two years, citing rising operating costs and continued revenue dips.

It was revealed Star Ferry suffered a loss in 2016, with fare revenue showing a downward trend since 2014. However, last year the government only approved an average fare increase of 8.9 per cent. But it said it would consider relaxing restrictions on developing the Central and Wan Chai piers, to help Star Ferry generate more income.

Q: What could the future hold for Star Ferry?

Star Ferry is facing an ageing workforce and is having difficulty retaining young recruits. In 2016, the average age of a sailor was 54, and 58 for a coxswain. Employing about 170 staff, comprising 40 coxswains and 130 sailors and engineering staff, the company increased staff pay by about 11 per cent and then 3.5 per cent over the past two years. 

But it remains to be seen if the company can attract new blood. Star Ferry may also face competition from water taxi services, as the government is mulling a proposal for private boat services at popular harbours, including Victoria Harbour. But lawmaker Yiu Si-wing, representing the tourism sector, did not think that such a service would pose a threat to Star Ferry. 

“They are two different modes of service. Star Ferry is a public transport with very cheap fares while water taxis will surely charge much more for a personalised service. I have no worries about Star Ferry,” he said.