Hong Kong’s Star Ferry must embrace a sustainable business model
Fare adjustments should be made if necessary, but more must be done to diversify revenue to preserve the city’s historic transport link
Star Ferry said rising operating costs prompted its request to charge 80 HK cents to HK$2 (10-25 US cents) more per journey. While some might shrug off the steep hike for one of the city’s cheapest modes of transport, the percentage is no small matter for others.
For the company, a significant increase in 2023 was a lifeline helping it to return to a modest profit after a staggering HK$100 million loss between 2018 and 2023. Margins fell from 6.4 per cent to 3.7 per cent over the same period as it struggled with costs including staff salaries, fuel and engine replacements.
Reliance on such increases is not a popular or sustainable long-term strategy. Ridership also remains down, at only 80 per cent of 2018 levels following expansions of the cross-harbour MTR network. Authorities should continue to act as pragmatic gatekeepers, vetting plans as they did by capping a request from outlying ferry operators for similar fare increases.
It is good that Star Ferry plans to continue carrying eligible elderly and disabled passengers under the government’s HK$2 concession scheme. It is also welcome to see the company pursue revenue diversification, including proposing a new pet-friendly service between Wan Chai and Tsim Sha Tsui with the purchase of a HK$25 pet pass. The operator should also continue to explore other revenue streams, including its earlier proposals to revamp piers into cultural and entertainment areas.
The historic ferries are essential tourism and cultural infrastructure for the city. Reasonable fare adjustments should be made if necessary. But the ultimate ticket to weathering economic storms may be finding new, sustainable business models.