Hong Kong’s iconic Star Ferry will increase its fares by more than 50 per cent in April, after the government approved price adjustments aimed at helping the 125-year-old service operator recover from heavy losses and cope with rising operation costs.
From April 3, ferry journeys connecting Tsim Sha Tsui with Central and Wan Chai will cost HK$5 for an adult on weekdays, while the fare is HK$6.5 on weekends and public holidays. The price of the monthly ticket will also go up from HK$160 to HK$190, and free rides for the elderly will be replaced with concessionary fares of HK$2.
The daily trip price hikes approved by the Executive Council on Tuesday marked an average rate of increase of 55.2 per cent. But they were smaller than the company had asked for last November, when it sought to double fares amid heavy losses suffered since 2018.
Described as the “key icon of Hong Kong” by the government, Star Ferry saw a decline in its patronage in recent years, exacerbated by a lack of tourists as the city remained isolated by restrictions throughout much of the Covid-19 pandemic.
Its average daily patronage plunged from 49,200 in 2019 to 23,300 in 2020, the first year of the pandemic, according to the company’s application for fare adjustment submitted to the Legislative Council Panel on Transport last November.
The document also revealed that the company registered a deficit of more than HK$37 million in 2021.
“Star Ferry has been recording losses since 2018. With its accumulated loss exceeding its total assets, Star Ferry has been relying on debt to run its franchised services,” a government spokesperson said.
The authorities took into account the financial position of the company, predicted changes in operating costs, revenue and return, past performance, cost-saving strategies and other factors when allowing the debt-ridden operator to adjust its fares. But the rate of increase “should be moderated to cater for the need of passengers,” it said.
“With the easing of anti-epidemic measures, Star Ferry’s patronage is expected to recover gradually. Yet the long-term impact of the pandemic remains to be seen. Coupled with rising operating costs of Star Ferry expected, there is a need for Star Ferry to adjust its fares,” the spokesperson said.
Lawmaker Ben Chan Han-pan, who chairs the transport panel in the legislature, said on Tuesday that the price hikes may only help Star Ferry alleviate its financial woes in the short run. The DAB politician raised concerns that members of the public tended to have a “negative impression” on fare increases, saying it may affect the ferry operator’s patronage.
The government should encourage Star Ferry to explore other sources of revenue, such as subsidising the company to refurbish the piers and bring in different shops and restaurants, Chan suggested.
“By making the pier an attraction for tourists and local residents to admire the Victoria Harbour, it can enhance Star Ferry’s ability to develop continuously,” he said.
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