2 Yarmouth ferry report

Transcription

Yarmouth-Maine Ferry
Traffic projection and viability analysis
Prepared for:
Yarmouth Area Industrial Commission
Prepared by:
Gardner Pinfold
June 30 2011
Table of Contents
Summary............................................................................................................................ i
1
Introduction ........................................................................................................... 1
1.1
Background ............................................................................................... 1
1.2
Issues ........................................................................................................ 2
1.3
About this study ......................................................................................... 3
2
Rationale for a Yarmouth-Maine Ferry Service ..................................................... 5
2.1
Regional transportation patterns - focus on ferries ................................... 5
2.2
What recent studies say .......................................................................... 10
2.3
Concluding observations - U.S. visitor traffic ........................................... 12
3
Ferry Configuration and Financial Analysis ......................................................... 15
3.1
Operational considerations ...................................................................... 15
3.2
Traffic projection ...................................................................................... 19
3.3
Financial analysis .................................................................................... 23
4
Regional Benefits ................................................................................................ 27
4.1
Impact of the loss of the Yarmouth ferry ................................................. 27
4.2
Economic impact of a new cruise ferry service ....................................... 30
Annex A: Port of Portland Rules, Regulations and Fees - U.S. Regulatory Agencies ... 35
Annex B: Traffic and Expenditure Data Tables and Forecast ......................................... 39
Annex C: Yarmouth – Maine Ferry - Tourism Analysis and Traffic Projection ................ 49
Summary
Background
The ferry service between Yarmouth and Maine (specifically, between Yarmouth and the ports of
Bar Harbor and Portland) was terminated in December 2009. Declining U.S. visitation to Nova
Scotia and falling ridership on the Maine-Yarmouth ferry route led to a decision by the
Government of Nova Scotia to terminate its $6 million annual subsidy to the service operator.
Without the subsidy, the operator decided not to operate from the 2010 season onwards, which
resulted in the loss of an important U.S. visitor gateway to the province.
The termination of the ferry service raises several issues affecting a broad range of interests.


Local community: the loss of
the ferry service has been felt
acutely by the Yarmouth area
economy through a drop in
spending by the ferry on
goods and services and also
arising from a sharp decline in
tourism activity.
Regional economy: the ferry
service also supported the
economies of the south shore
and Acadian shore, largely
through tourism spending.
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
Provincial economy: beyond the obvious decline in economic activity at the local and
regional levels, the adverse impact of the termination of the ferry is evident also at the
provincial level. This not only affects the many businesses dependent on tourism
expenditures, but also reduces the tax revenues at the provincial and municipal levels.

US and Canadian travellers: the loss of a direct ferry route between Maine and Nova
Scotia causes some travellers to decide not to travel at all, or not to travel as frequently,
because of the time and cost implications of driving the full distance.

Commercial traffic: commercial traffic has not used the Yarmouth ferry for many years
due to capacity limitations. So, while the termination does not impose a major burden on
industry, it does not follow that the right ferry service would not offer shippers an option
they could use when circumstances warrant.
The specific objectives of this study are to:

Prepare an assessment of the market for private and commercial ferry transportation from
Yarmouth to Maine, identifying preferred options for operating scenarios and developing
pro forma financial statements

Identify and measure regional benefits of the ferry service.
Gardner Pinfold
i
ii
Yarmouth-Maine ferry – Traffic projection and viability analysis
Ferry traffic past and future
As recently as 2002, Nova Scotia attracted some 230,000 U.S. overnight visitors. About 40% of
these visitors – 90,000 – arrived by ferry via Yarmouth. In addition, about 55,000 U.S. visitors
arrived in Yarmouth as walk-on passengers, bringing the total to 145,000 who arrived by ferry.
Allowing for some adjustments for those heading back to the U.S. by another route, and for those
arriving at another entry point and heading back via the ferry, the visitor number can reasonably
be converted to passengers by doubling it. Adding in Canadians and international visitors using
the Yarmouth ferry brings the total number of passengers to a peak of about 320,000 in 2002.
The decline in ferry traffic that began after 2002 is attributable to several factors:

9/11, 2001: the terrorist attacks created a general reluctance among Americans to travel
abroad. This worsened a slow-down in travel that began in early 2001 as the U.S.
economy slipped into recession following the collapse of the dot.com bubble.

SARS, 2003: the Severe Acute Respiratory Syndrome outbreak caused many in the U.S.
to avoid travel.

Border security requirements: regulations and inspections became more stringent
immediately following 9/11, culminating in the need for U.S. citizens to carry passports
or other approved documents when travelling to and from Canada.

Exchange rates: the value of the U.S. dollar began to decline in 2002, following several
years of attractive valuations in relation to the Canadian dollar. U.S. purchasing power
dropped by 40% between 2002 and 2008, causing the effective cost of travel in Canada to
become that much more expensive.

Rising fuel costs: gasoline prices rose steadily between 2002 and mid-2008, reflecting
the declining value of the U.S. dollar as well as rising global demand.

Termination of the Scotia Prince: ending the Yarmouth-Portland service in 2005
reduced the overall trip capacity of the ferry services from 2,100 passengers daily on two
routes to just 900 on a single route. This contributed greatly to the abrupt drop in traffic
in 2005.

U.S. recession, 2007-2009: the financial crisis plunged the U.S. economy into what is
now referred to as the Great Recession. It had, and continues to have, a profoundly
depressive impact on production, employment and incomes. Though the recession
officially ended in late 2009, the U.S. economy has been slow to show signs of sustained
recovery. An upturn in tourism travel to Nova Scotia, and to Canada more generally,
depends on this recovery.
Developing a traffic projection for a renewed Yarmouth ferry service is complicated by the ongoing influence these factors have on the decision by Americans to travel, not just to Nova Scotia,
but also to any destination in Canada. Two of these factors stand out, providing a source of
optimism about a recovery of travel to Nova Scotia via Yarmouth:

The economy will improve: so much of decline in travel can be explained by economic
conditions in the U.S. and Canada. The U.S. economy will begin to improve in the next
year or two. As it does, we expect three things to happen:
•
The U.S. dollar will begin to appreciate against most currencies, including the
Canadian dollar. This will make travel to Canada more affordable.
Gardner Pinfold

iii
•
Crude oil and petroleum product prices will decline in response to the strengthening
U.S. dollar (this will reverse the pattern of the past few years when much of the
increase in petroleum prices was due to the fall in the value of the dollar). As fuel
prices decline in absolute and relative terms, Americans will return to the roads.
•
Incomes in the U.S. will begin to rise, promoting consumer confidence and greater
discretionary spending.
The right ferry will re-build traffic: the collapse in ferry traffic was not due just to the
economic climate, but also to the ferry itself. That the drop in traffic on the ferry was
much steeper than the general decline in U.S. tourism to Atlantic Canada and Nova
Scotia provides evidence that visitors were avoiding The Cat. A service featuring a
cruise ferry offering a facilities and amenities comparable to those found on cruise ships
would provide an attraction in itself, as well as a more comfortable transportation mode
to Nova Scotia. Part of the reason for optimism that a cruise ferry would re-build traffic
lies in the growth in cruise travel from the U.S. to Canada over the past decade. It is the
fastest growing segment, with U.S. passenger numbers on routes from New York and
Boston to Halifax rising from 170,000 in 2006 to 261,000 in 2010.
As the economy recovers, an effective marketing campaign combined with creative tour
packaging could see a recovery of U.S. traffic exceeding 100,000 passengers (50,000 visitors) in
the first year of a renewed Yarmouth-Portland cruise ferry service. To put this into perspective,
considering just overnight visitors, this represents just 35% of U.S. visitors to Nova Scotia in
2010. Adding Canadian and international passengers would bring the first year forecast to
120,000 (Table S.1).
Table S.1
Yarmouth-Portland ferry passenger and vehicle forecast
Year
Walk On
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
50,000
46,000
46,600
47,200
47,720
48,250
48,780
49,300
49,840
50,400
Motor Coach
passengers
2,400
3,400
4,500
4,550
4,600
4,650
4,700
4,750
4,800
4,850
coaches (1)
50
70
94
95
96
97
98
99
100
101
Auto Overnight
passengers
65,500
58,700
59,500
60,110
60,720
61,440
62,150
62,860
63,470
64,180
vehicles (2)
26,200
23,480
23,800
24,044
24,288
24,576
24,860
25,144
25,388
25,672
Other Traffic Commercial
passengers
2,100
1,900
1,930
1,950
1,970
1,990
2,010
2,030
2,050
2,070
trucks
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
Total
passengers
120,000
110,000
112,530
113,810
115,010
116,330
117,640
118,940
120,160
121,500
Notes
1. Assumes 48 passengers per coach
2. Assumes 2.5 passengers per private vehicle
The forecast, shown in Table S.1, is not fixed in a particular year, though we believe achieving
120,000 passengers could be achievable in 2013. But to reiterate, achieving this (and building
from there) is contingent on a combination of:

Economic recovery leading to renewed consumer confidence

A ferry that is an attraction in its own right

Effective marketing
Gardner Pinfold
iv
Ferry options
A Yarmouth-Maine ferry should:







Respond to the needs of the tourism industry
Be safe and reliable
Have a convenient schedule and suitable frequency
Be comfortable with modern amenities
Be competitively priced and affordable
Provide a transportation option for commercial interests including the fishing industry
Be commercially viable
In descending order, three ferry types offer potential to meet the criteria:



Cruise ferry: this vessel combines the features of a cruise ship and a ferry capable of
accommodating large numbers of passengers and cars, as well as large commercial
trucks.
Fast ferry: this vessel is capable of handling large numbers of passengers and cars, but
offers a limited range of amenities and is usually deployed on short routes (under two
hours) featuring relatively calm sea states.
Ropax: this vessel is designed to carry commercial vehicles (both trucks and drop
trailers) as well as the potential for hundreds of passengers and cars.
The case for the Cruise Ferry rests on its ability to pitch itself in the strongest growth market –
cruise travel. The right vessel, if well marketed and managed, offers considerable potential to
approach the high traffic years of the late 1990s and early 2000s.
Route options
Yarmouth-Portland and Yarmouth-Bar Harbor would both be candidates for a revived ferry service.

Infrastructure and facilities: both ports offer infrastructure and facilities suitable for a
cruise ferry and both have a lengthy, recent and successful history as terminals for a
Yarmouth-Maine service.

Distance and crossing time: Bar Harbor would appear to have an advantage because it is just
90 nautical miles from Yarmouth. The crossing is 5-6 hours using a conventional vessel.
This offers some flexibility with schedules and allows ample time for return crossings within
a 24-hour period. Portland is double the distance, with a crossing time in the 10-11 hour
range (the lower end of the range is within reach for vessels operating at 20 kn). This would
allow daily return crossings, though scheduling and turn-around times in port would be
somewhat constrained. For passengers interested in the cruise experience, the longer crossing
time may be preferred.

Cost of service: twice the sailing distance between Yarmouth and Portland means higher fuel
costs, with correspondingly higher maintenance expenses. It would also likely mean sailings
on six rather than seven days per week, since a day would be needed to carry out routine
cleaning, maintenance and provisioning. Operating on a 24-hour rather than a 12-14 hour
schedule would also likely result in higher crew costs. Of course, the absolute level of costs
is not the issue, but rather costs in relation to revenues. A higher cost service may be the
preferred alternative if it generates higher net revenues.
Gardner Pinfold
v

Schedule: early morning (0800-0900 hr) arrivals/departures from Yarmouth and evening
arrivals/departures from Portland (2000-2100 hr) worked well for the Scotia Prince when it
operated on this service. This would suit the SWNS tourism industry, since many passengers
would spend the night in the area before departing. Also, this schedule would avoid conflict
with cruise ships in Portland that enter port by mid- morning and depart in late afternoon.
With a shorter crossing time, the Bar Harbor service could offer more flexibility, though
scheduling around cruise ships would also be an issue there. If night crossings were to be
avoided, this could mean early morning departures from Bar Harbor and late evening arrivals
back in Bar Harbor, with the vessel overnighting there (this was similar to The Cat schedule
for both Portland and bar Harbor). With Yarmouth arrivals and departures in the afternoon,
this would not work as well for the local tourism industry.

Revenues: where is the traffic likely to be higher: this would tend to favour Portland, since it
is within a six-hour drive of a population base of some 30 million including most of the major
cities in New England and of New York. This is ideal for motor coaches. Bar Harbor adds an
additional 3-4 hours driving time. Nonetheless, though it is more distant from major
population centres, Bar Harbor is a popular tourist destination (near Acadia National Park).
During the 1990s, when ferries operated between Yarmouth and both Portland and Bar
Harbor, passenger numbers via Portland tended to be about 50% higher. The balance settled
at 50:50 in the early 2000s when The Cat was introduced, a response to the novelty of the
vessel and the relatively short duration of the trip.

Advantage for commercial interests: neither route would offer much advantage over the
existing Digby-Saint John service as far as time to major markets in the U.S. is concerned. All
routes would place a tractor-trailer in Boston in about 12-13 hours. By virtue of a late
afternoon departure from Yarmouth, a Bar Harbor service would allow trucks carrying fish and
seafood to arrive in Boston within 24 hours and in time to meet market requirements (5 am). A
Portland service, with its morning departure from Yarmouth, would not meet these conditions.
The other disadvantage of a Yarmouth service (both Portland and Bar Harbor) compared with
Digby is that it would be seasonal. The fishing industry needs the year-round service.
Against these considerations – proximity to major population centers in particular – Portland
would appear to be the stronger candidate. Accordingly, it is a Yarmouth-Portland service that is
assessed in detail.
Revenues and costs
Given the traffic, fare structure and operating cost estimates, the service could expect to break
even or even generate a modest positive net return. Applying a competitive fare structure to the
traffic forecast produces an annual revenue stream in the $24-26 million range (Table S.2).
Table S.2
Yarmouth-Portland ferry: pro forma operating revenues ($000)
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Year
1
2
3
4
5
6
7
8
9
10
#
120,000
110,000
112,530
113,810
115,010
116,330
117,640
118,940
120,160
121,500
Fare (1)
115
115
115
115
115
115
115
115
115
115
Revenue
13,800
12,650
12,941
13,088
13,226
13,378
13,529
13,678
13,818
13,973
PRV (2)
26,200
23,480
23,800
24,044
24,288
24,576
24,860
25,144
25,388
25,672
Fare
(3)
225
225
225
225
225
225
225
225
225
225
PRV
revenue
5,895
5,283
5,355
5,410
5,465
5,530
5,594
5,657
5,712
5,776
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#
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
Fare (4)
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
Revenue
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
Ancillary revenues
(5)
Total revenue
6,000
26,695
5,500
24,433
5,627
24,922
5,691
25,189
5,750
25,441
5,817
25,724
5,882
26,004
5,947
26,283
6,008
26,539
6,075
26,824
Gardner Pinfold
vi
The cost analysis assumes the ferry operator would charter a vessel. Current bare-boat rates for
vessels of this type have been settling in the US$21,000/day range. The vessel is charged to the
Yarmouth-Portland service for 180 days. Underlying these figures is the assumptions the vessel
would be used on another service for the balance of the year. Total vessel operating costs,
including administration and overhead, are estimated at about $24.0 million annually (Table S.3).
Table S.3
Yarmouth-Portland pro forma operating costs
Vessel
Year 1
Year 2
Charter fee (1)
3,800
3,800
Fuel (2)
6,300
6,300
Crew (3)
5,000
5,000
Maintenance (4)
1,000
1,000
Consumables (5)
2,000
1,850
Management & other
500
500
Year 3
3,800
6,300
5,000
1,000
1,900
500
Year 4
3,800
6,300
5,000
1,100
1,950
500
Year 5
3,800
6,300
5,000
1,200
1,950
500
Year 6
3,800
6,300
5,000
1,300
2,000
500
Year 7
3,800
6,300
5,000
1,400
2,000
500
Year 8
3,800
6,300
5,000
1,400
2,050
500
Year 9
3,800
6,300
5,000
1,500
2,100
500
Year 10
3,800
6,300
5,000
1,500
2,100
500
Subtotal
18,600
18,450
18,500
18,650
18,750
18,900
19,000
19,050
19,200
19,200
Administration & overhead
Labour
Maintenance (6)
Marketing
Administration & other
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
Subtotal
5,400
5,400
5,400
5,400
5,400
5,400
5,400
5,400
5,400
5,400
24,000
23,850
23,900
24,050
24,150
24,300
24,400
24,450
24,600
24,600
Total
Economic impact
A revived cruise ferry service operating between Yarmouth and Maine would reverse the negative
economic impact the region has suffered over the past decade due to declining U.S. tourism. The
positive impact would be felt throughout the region as soon as the service begins, and would
gradually grow, as tour packages are developed to take advantage of emerging service offerings.
Based on the traffic forecast and relying on average spending amounts, we estimate that the
revived Yarmouth ferry would account for $16.3 million in annual gross tourism spending
throughout the province. Of this, $3.5 million (about 21%) would be spent annually in the
Yarmouth/Acadian Shores and South Shore impact regions.
The $16.3 million in total tourism spending results in overall impacts (direct and spin-off) of:

GDP: a contribution to GDP of $12.0 million for the province as a whole. Spending in
Yarmouth/Acadian Shores and South Shore generates GDP of $2.0 and $0.9 million,
respectively.

Employment: the creation of about 260 full-time equivalent (FTE) jobs in the province
as a whole. Spending in Yarmouth/Acadian Shores and South Shore generates about 60
and 20 FTE, respectively.

Labour income: the creation of $8.0 million of labour income in the province as a
whole. Spending in Yarmouth/Acadian Shores and South Shore generates $1.3 and
$0.4 million of labour income, respectively.

Taxes: federal and provincial taxes (income and HST) fall in the $2.9 million range
annually over the 10-year simulation period.
Gardner Pinfold
1
Introduction
1.1
Background1
The ferry service between Yarmouth and Maine (specifically, between Yarmouth and the ports of
Bar Harbor and Portland) was terminated in December 2009. A sharp decline in traffic after 2003
caused revenues to drop, undermining the viability of the service. The Government of Nova
Scotia provided several million dollars in financial support between 2006 and 2009 to keep the
service operating. When the Province indicated the subsidy would not be available in 2010, the
operator, Bay Ferries, discontinued the service.
Though a transportation link between Yarmouth and New England ports had existed from the
1880s, the first regular ferry service dates from 1955 when CN introduced the Bluenose on a run
between Yarmouth and Bar Harbor. CN replaced the Bluenose with the new Bluenose on its
seasonal Yarmouth-Bar Harbor service in 1983, continuing this service until 1997 when it was
taken over by Bay Ferries.
The European ferry operator, Lion Ferry, established a Portland-Yarmouth service in 1970 using
various vessels, finally settling in 1982 on the cruise ferry Scotia Prince, which ran seasonally
until 2004 when the service was terminated.2 CN also ran a ferry service aimed mainly at
commercial traffic between Yarmouth and Portland between 1976 and 1982, ending it because of
weak demand. Due largely to a favourable itinerary, the fishing industry preferred to use the
Digby-Saint John ferry, a service that had been in existence since the late 1880s.
Bay Ferries took over the Yarmouth-Bar Harbor and Digby-Saint John services in 1997 following
the 1995 decision by the federal government to withdraw from direct ferry operations (unless
required under the terms of Confederation). The Bluenose was sold after the 1998 season and
replaced with a high-speed catamaran ferry (“The Cat”) that dropped the crossing time from six
to three hours.
The first Cat was replaced with a larger version in 2002, with a capacity of 900 passengers and
240 cars or equivalent combination of cars, RVs and motorcycles. It also carried up to four motor
coaches. In 2006, The Cat replaced its Friday-Sunday service to Bar Harbor with a YarmouthPortland service (restoring the link served by the Scotia Prince), thereby restoring access to both
markets served historically by Yarmouth ferries. This lasted just four years; when the subsidies
ran out, the service on both routes ended.
1
A summary of the history of the ferry service between Yarmouth and Maine may be found in various
sources including: CPCS Transcom Limited, Southwest Nova Scotia Transportation Study, 2010;
http://www.google.ca/search?q=shippax+The+Ferry+Market+%26+Outlook+2010&ie=utf-8&oe=utf8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a;
http://en.wikipedia.org/wiki/Scotia_Prince_Cruises
2
The discovery of toxic mold in the Portland terminal was the ostensible reason for the termination.
Declining traffic may also have played a role.
Gardner Pinfold
1
2
1.2
Issues
The termination of the ferry service raises several issues affecting a broad range of interests.

Local community: the impact of the ferry service, and its loss, have been felt acutely by
the Yarmouth area economy. This impact operates at two levels: directly, through the
employment and income created to operate, maintain and support the service; and
indirectly, through the spending on goods and services by ferry passengers arriving from
the U.S. and departing from Yarmouth. In a broader economic sense, the loss of the
service isolates the Yarmouth area.

Regional economy: the ferry service also supported the economies of the south shore and
Acadian shore, largely through tourism spending. In addition to obvious cost and time
reasons, part of the rationale for taking the ferry is to experience the attractions of this
region – whether the fishing villages and beaches along the south shore or the
Francophone villages along the Acadian Shore and the pastoral beauty of the Annapolis
Valley. The data show that the loss of the ferry contributed to reduced spending and a
contraction of economic activity throughout this region in 2010.

Provincial economy: beyond the obvious decline in economic activity at the local and
regional levels, the adverse impact of the termination of the ferry is evident also at the
provincial level. While there had been a declining trend in U.S. visitors after 2002, a 10%
increase in U.S. visitors in 2009 provides signs of a recovery following the 25%
recession-induced drop in 2008. But this incipient recovery was cut short as the total
number of U.S. visitors travelling by road to Nova Scotia declined again in 2010. It is not
unreasonable to conclude that the termination of the ferry accounted for all or much of this
reversal. This not only adversely affects the many businesses dependent on tourism
expenditures, but also reduces the tax revenues at the federal, provincial and municipal
levels. On the other hand, on-going subsidization of The Cat would have cost taxpayers
several million dollars each year.

US and Canadian travellers: the loss of a direct ferry route between Maine and Nova
Scotia causes some travellers to decide not to travel at all, or not to travel as frequently,
because of the time and cost implications of driving the full distance; while others make
the trip, incurring these time and cost “penalties”. It means these travellers are at least
inconvenienced, but it may also result in reduced local expenditures in cases where it time
is taken up by driving instead of tourism activities.

Commercial traffic: commercial traffic has not used the Yarmouth ferry for many years.
The Cat could accommodate tractor-trailers, but for operational reasons related to weight
did not take them. The Scotia Prince was geared to cruise travel and discouraged
commercial traffic (chiefly, trucks carrying fish and seafood). So, while the termination
does not impose a major burden on industry, it does not follow that the right ferry service
would not offer shippers an option they could use when circumstances warrant (e.g., if the
Digby ferry were not available because of capacity, weather or scheduling constraints).

Digby-Saint John ferry service: this service benefitted from the termination of The Cat,
with U.S. passenger traffic almost doubling in 2010 from its 2009 level (U.S. overnight
visitors increased from about 7,000 to 13,600). This would have caused a significant
revenue improvement for that service, contributing to its viability. But this spillover
represents a small fraction of the total number of U.S. visitors that would have taken the
Yarmouth ferry. Many continued by road, entering Nova Scotia at Amherst, recognizing
that the Digby ferry conferred no advantage if travelling to HRM or northern Nova Scotia.
Gardner Pinfold
1.3
3
About this study
The Yarmouth Area Industrial Commission (YAIC) is leading an initiative aimed at attracting an
experienced operator to establish a new ferry service between Yarmouth and Maine. This study
is intended to support this process by providing market assessment and benefits information for
prospective operators and potential investors.
The specific objectives of this study are to:

Prepare an assessment of the market for private and commercial ferry transportation from
Yarmouth to Maine, identifying preferred options for operating scenarios and developing
pro forma financial statements.

Identifying and measuring regional benefits of the ferry service including local
employment created by the service, new supply and support services, environmental and
social benefits attributable to the service, and indirect and induced economic impacts.
To meet these objectives, this report begins with a review of regional travel patterns to provide
the rationale for a Yarmouth-Maine ferry service. This review examines what past studies have
found; considers how the current economic climate is likely to change in the near future and what
this will mean for traffic levels; and takes a close look at tourism traffic between Nova Scotia and
the U.S. since the late 1990s, and the factors likely to influence it over the next decade.
The report then turns to an assessment of the feasibility of a new ferry service. It starts with a set
of operational considerations – key factors such as traffic composition and route to determine the
kind of ferry that makes the most sense for a Yarmouth-Maine service. This is an iterative
exercise, since the choice of ferry itself would influence traffic composition and levels. The
analysis then moves to develop traffic projections for the various vehicle/passenger categories,
with a careful assessment of how historical levels were influenced by economic factors during the
decade 2000-2009, and also by the characteristics of the specific ferries in service over the years.
With traffic projections, the analysis is extended to assess the commercial viability of the service.
This involves developing a pro forma fare structure and applying that to the traffic projection to
generate an indicative revenue stream. This is compared with indicative ferry operating costs to
determine whether the service as configured might be viable.
The final section of the report examines the regional benefits of a revived and reconfigured ferry
service. It looks initially at some of the implications for Southwest Nova Scotia arising from the
loss of the ferry in 2010. It then turns to a assessment of the impacts of a revived service,
quantifying the employment and income gains arising from both the direct ferry operations as
well as the gains arising from expenditures made by ferry passengers travelling to and through the
region.
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4
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2
Rationale for a Yarmouth-Maine Ferry Service
2.1
Regional transportation patterns3 - focus on ferries
Overview
Transportation is a derived demand – it derives from the various needs people have to move
themselves from one place to another, and from the needs of business to move product inputs
from source to plant and outputs from plant to market.
The transportation system in SWNS is currently composed of essentially two modes: road and
sea.

Road: Yarmouth and other communities in the region are connected by a system of
trunk, collector and local roads to coastal Highways 101 and 103, which in turn links
them to Highway 102 (near Halifax) and the wider North American highway network. In
assessing the suitability of the SWNS highway/road network, CPCS Transcom concluded
that it has more than enough capacity to meet current and future traffic demand.4

Sea: the region has many fishing ports, but only three that have handled cargo vessels or
ferries in addition to local fishing vessels. Until 2009, Yarmouth served as the terminus
of a regular passenger ferry service to Bar Harbor and to Portland. A ferry carrying
passengers and commercial cargo continues to operate between Digby and Saint John.
Until 2007, Shelburne handled regular and occasional imports and exports of fish and fish
products, but the carrier transferred these shipments to Halifax.
Rail service was discontinued in 1990 after almost 100 years of operation. Regular air service in
Yarmouth ended in 2003, with the loss of Air Canada/Jazz. Various efforts to restore the air link
met with some success in 2010 as an American carrier began a scheduled service between
Yarmouth and Portland.
Given the central objective of this study, and in light of the capacity of the road system to handle
substantially higher traffic levels than it currently does (generally, current highway utilization is
well below design capacity), the analysis of regional transportation patterns focuses on ferry
services (Yarmouth and Digby) and the traffic they carry. More specifically, the analysis
examines historic traffic levels by type and origin, and the factors explaining changes in these
levels over the past decade.
3
A detailed analysis of the SWNS transportation system may be found in CPCS Transcom, South West
Nova Scotia Transportation Study, 2010.
4
Ibid, p. 86.
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5
6
Private traffic (tourism)
Yarmouth
Passenger traffic through the Port of Yarmouth reached a peak at just under 320,000 in 2002
(Figure 2.1). Two ferries operated in the years between 1998 and 2004, The Cat on the Bar
Harbor service (capacity for 900 passengers and 240 cars) and the Scotia Prince on the Portland
service (capacity for 1,200 passengers and 200 cars). From 2005 to 2009, only The Cat operated,
with service between Yarmouth and Bar Harbor from Monday to Thursday, and between
Yarmouth and Portland from Friday to Sunday.
Figure 2.1
Yarmouth-Maine ferry traffic
350,000
80,000
300,000
70,000
250,000
60,000
50,000
200,000
40,000
150,000
30,000
100,000
20,000
50,000
10,000
0
0
1999
2001
2003
Passengers (left axis)
2005
2007
2009
Autos (right axis)
Source: Statistics Canada, as reported by Yarmouth Area Industrial Commission, 2011.
Passengers on the ferries are travelling mainly for tourism purposes, with traffic concentrated in
the June-September period (Figure 2.2). The total traffic level remained stable between 2001 and
2003, declined by about 17% in 2004 and then dropped sharply in 2005 and steadily thereafter,
until the service was terminated in 2009. Several factors contributed to the trend:

9/11, 2001: the terrorist attacks created a general reluctance among Americans to travel
abroad. This worsened a slow-down in travel that began in early 2001 as the U.S.
economy slipped into recession following the collapse of the dot.com bubble.

SARS, 2003: the Severe Acute Respiratory Syndrome outbreak caused many in the U.S.
to stay at home.

Border security requirements: regulations and inspections became more stringent
immediately following 9/11, culminating in the need for U.S. citizens to carry passports
or other approved documents when travelling to and from Canada.

Exchange rates: the value of the U.S. dollar began to decline in 2002, following several
years of attractive valuations in relation to the Canadian dollar. U.S. purchasing power
dropped by 40% between 2002 and 2008, causing the effective cost of travel in Canada to
become that much more expensive.

Rising fuel costs: gasoline prices rose steadily between 2002 and mid-2008, reflecting
the declining value of the U.S. dollar as well as rising global demand.
Gardner Pinfold
7

Termination of the Scotia Prince: ending the Yarmouth-Portland service in 2005
reduced the overall capacity of the ferry services from 2,100 passengers daily on two
routes to just 900 on a single route. This contributed greatly to the abrupt drop in traffic
in 2005 (see Figure 2.1).

U.S. recession, 2007-2009: the financial crisis plunged the U.S. economy into what is
now referred to as the Great Recession. It had, and continues to have, a profoundly
depressive impact on production, employment and incomes. Though the recession
officially ended in late 2009, the U.S. economy has been slow to show signs of sustained
recovery. An upturn in tourism travel to Nova Scotia, and to Canada more generally,
depends on this recovery.

Shift in travel preferences: the decline in road travel reflects a shift in preferences for
mode of travel. Travel by motor coach has declined sharply, while cruise travel has
increased just as sharply. For example, travel by motor coach on The Cat dropped by
almost 70% between 2005 and 2009 (from about 8,000 to 2,600), while cruise travel to
Nova Scotia between 2006 and 2010 increased from 170,000 to 260,000 passengers
(based on Halifax visits). This growing interest in the cruise experience suggests that a
cruise ferry could present an attractive option for a new Yarmouth-Maine ferry service.
Figure 2.2
Seasonal distribution of Yarmouth-Maine
ferry passengers (2000-2009 avg)
35%
30%
25%
20%
15%
10%
5%
0%
May
June
July
August
September October
Source: Data compiled by ferry companies and published sources by Yarmouth Area Industrial Commission, 2011.
Digby
The Digby-Saint John ferry is of importance to this analysis because it represents another entry
point into Nova Scotia and, as such, gives travellers an option. While few U.S. tourists heading
to Nova Scotia would be likely to by-pass a ferry operating from Maine to drive the additional
distance to take a ferry from Saint John, it nonetheless should be acknowledged as a potential
source of competition.5
5
It is worth noting that U.S. consumer research conducted by the Atlantic Canadian Tourism Partnership
(ACTP) in 2009 shows that “easy driving distance” is one of the attributes on which Nova Scotia and the
other Atlantic Provinces score poorly when compared with New England.
Gardner Pinfold
8
A review of the Digby ferry traffic data reveals a similar, though less severe, declining trend
compared with Yarmouth (Figure 2.3). Passenger numbers declined by 44% on the Digby route
between 2000 and 2009 (from 178,000 to about 100,000), compared with 76% through Yarmouth
(from 305,000 to about 74,000). Digby had substantially lower overall traffic levels before 2004
(the last year of the Scotia Prince service), and similar levels between 2005 and 2009.
The Digby ferry serves mainly the local market, with 35-40% of passengers residing in Nova
Scotia and New Brunswick; Ontario and Quebec account for 25-30%. In the past few years, U.S.
passengers have accounted for 25-30% of the total, though the number more or less doubled in
2010 with the termination of the Yarmouth ferry.6
Figure 2.3
Digby-Saint John ferry traffic
200,000
60,000
180,000
50,000
160,000
140,000
40,000
120,000
100,000
30,000
80,000
20,000
60,000
40,000
10,000
20,000
0
0
2000
2003
Passengers (left axis)
2006
Autos (right axis)
2009
Trucks (right axis)
Source: Data compiled by ferry companies and published sources by Yarmouth Area Industrial Commission, 2011.
The factors behind the traffic trend include some of the same factors (e.g., rising fuel costs) as for
the Yarmouth-Maine routes, and also:

Improved highways: the total number of passengers declined from 178,000 in 2000 to
about 100,000 in 2009 (a drop of 44%). Improvements in the highway systems in New
Brunswick and Nova Scotia would seem to be the main factor. The trip from Saint John to
Halifax takes at least 5 hours by ferry (including crossing and driving time from Digby)
and only 4 hours by highway. Road travel also offers greater scheduling flexibility.

Higher ferry fares: these increased sharply (by 50-60%) between 2005 and 2007, rising
to over $400 for a round trip for a family with vehicle.7 Depending on destination, taking
the highway route would present an attractive alternative, particularly with improved
roads and despite rising gasoline prices.
6
According to Nova Scotia Department of Economic Development and Tourism data, the number of
overnight U.S. visitors entering Nova Scotia via Digby almost doubled, rising from about 7,150 in 2009 to
13,600 in 2010. This would convert to double the number of U.S. passengers, if they all used the ferry on
the return trip.
7
See, Mariport Group, Digby to Saint John Ferry Impact Study, 2007.
Gardner Pinfold
9
Facing declining ridership, declining revenues and rising costs, Bay Ferries announced in 2006
that it intended to terminate the Digby service. At 40 years, the age and operating efficiency of
the ferry, Princess of Acadia, were key factors. The provincial and federal governments have
provided financial assistance since then, initially to extend the service to 2011, and then with
further support out to 2014, to allow time for a suitable replacement to be found.
Commercial traffic
Yarmouth
Commercial traffic – mainly tractor trailers carrying fish and seafood products – made limited use
of the Yarmouth-Maine ferries. The Bluenose carried 2-3,000 trucks annually on the YarmouthBar Harbor service in the early to mid-1990s. The Scotia Prince carried 1,000 annually in the
early 1990s, but this dwindled to zero by 2001 as the operator discouraged commercial traffic on
what was essentially a passenger vessel. The Cat did not take tractor-trailers.
Digby
The Digby-Saint John ferry has been the preferred option for the fishing industry. Schedule,
reliability and fare structure are the key factors. The late afternoon sailing from Digby allows
fish companies in SWNS to process and pack lobster/fish in the mornings for pick up (often a
“milk-run” along the shore) and transport to Digby to make the 4:00 pm departure and achieve
delivery to the Boston market by 4-5:00 am the next day. The Yarmouth ferry schedule was not
geared to fishing industry operations, and so use of the Bluenose and Scotia Prince tended to be
opportunistic, e.g., due to capacity constraints on the Digby ferry or when carrying cargo with a
less critical delivery schedule.
Changes in industry production levels and demand structure have contributed to the decline in
truck traffic over the past decade. The number of units carried (both ways) has dropped by 70%,
from 29,000 in 2000 to just below 8,700 in 2009. In recent years, about 75% of the trucks carry
fish (mainly groundfish and herring) and seafood (mainly lobster and scallop).

Fishing industry: The collapse of groundfish stocks and a sharp decline in the herring
fishery caused a major drop in production during the early 1990s. The recovery in these
fisheries by 2000 was short-lived, with the industry marked by a return to lower
production during the rest of the decade. Some this decline was offset by growth in
lobster production, much of which was shipped to the U.S. The declining value of the
U.S. dollar has also contributed to the drop in traffic, as processors have turned
increasingly to the Canadian and overseas markets.

Forest industry: This has been the other major commercial user of the Digby ferry.
Indeed, the decline in commercial traffic through Digby is attributable largely to the
decline in forest industry activity over the past decade. The decline in U.S. demand and
weakening prices have resulted in the closure of several large sawmills in SWNS,
including the Irving mill in Weymouth. The Digby route was also used intensively to
move wood chips from SWNS to Saint John. Rising costs caused the shipper to meet
requirements from more economic local sources.

Backhaul: Trucking companies carrying fish and seafood products to Boston have
developed a thriving backhaul trade carrying mink food processed in Thetford Mines,
Québec, to producers in SWNS. The triangular trade via Digby (Yarmouth-BostonThetford Mines-Yarmouth) covers 2,000 km and typically takes four days.
Gardner Pinfold
10
2.2
What recent studies say
Several studies of the ferry services in SWNS have been produced over the past five years. They
explore options for the Yarmouth-Maine and Digby-Saint John services, as well as the broader
economic implications of the continuation or termination of these services. They are summarized
here for two reasons: first, for the benefit of readers who may be unfamiliar with what has gone
before; and second, to examine some of the critical assumptions made in those reports as they
pertain to the ferry services so that the reader understands the basis for any differences in their
findings and the ones made in this report. The key points in each report are summarized in
Table 2.1.
CPCS Transcom, South West Nova Scotia Transportation Study, 2010
This report provides an exhaustive analysis of the SWNS transportation system and the economic
drivers that have shaped it. It examines trade flows and traffic patterns, with a focus on the ferry
services and how they might be optimized. Various ferry configurations (routes and ferry types)
are considered and subjected to financial analysis to test their viability.
The study makes several findings, of which the most important seem to be that: transportation
infrastructure generally is used below capacity; the ferries are integral to the transportation
infrastructure and essential to the economy; ferry capacity and use have declined over the years
for a variety of reasons; and, that economic activity in certain sectors in region have declined and
that the prospects are for low industrial and tourism growth. The study also concluded that none
of the options considered would be commercially viable.
Is identifying ferry options and assessing their viability, the CPCS study makes several
assumptions, of which the traffic projection is the main one. It underpins the ferry configuration
options, cost structure and revenue stream. It is key to the study finding that a Yarmouth-Maine
service would not be viable. Our concern with the traffic projection for the Yarmouth-Maine
route is that it is surprisingly conservative and not sensitive to capacity and quality of service
differences among the options. As we discuss in the following chapter, there are good reasons to
believe traffic levels would be higher with the right kind of service, resulting in higher revenues
and greater prospects for financial viability.
Spencer Economic Consulting, The impact of a ferry service on the economy: the case
of Nova Scotia, 2010
This report identifies and quantifies the economic impacts arising from the loss of the YarmouthMaine ferry service. This impact is estimated at $22 million based on 2009 tourism expenditures
and labour income generated through direct employment. The study finds that this impact could
be generated with a continuing ferry subsidy of about $6 million, and concludes that by failing to
make this “investment”, the provincial government is “foregoing a significant source of revenue”.
The study also points to two unquantified implications: stranded assets (public infrastructure and
private facilities built specifically to accommodate the ferry and its traffic that would have no
alternative uses), and increased isolation (without an entry/exit point, SWNS will find itself cutoff from tourism, commercial and industrial activity).
Gardner Pinfold
11
Table 2.1
Objectives
Scope
Method
CPCS Transcom
South West Nova Scotia
Transportation Study, 2010
• Analyze economic drivers
• Assess transportation options
• Assess ferry costs/benefits
• Study area is SWNS region
• Concentrates on road, ferry
• Economics of ferry options
• Trade flows/traffic patterns
• Ferry configuration options
• Financial analysis (commercial viability)
• Economic (benefit-cost) analysis
Main findings
•
•
•
•
•
•
Key assumptions
•
•
•
•
•
•
•
•
Observations
Gardner Pinfold
Infrastructure use below capacity
Ferries integral to infrastructure
Ferries essential to economy
Declining use/capacity of ferries
Low industrial/tourism growth
None of the options considered would be commercially viable
Ferry configurations and costs
Traffic projections by type
Ferry fares & revenues
Operating criteria & analysis
Economic impacts
Presents exhaustive list of options
Cost structure appears reasonable
PRV traffic projections are low in light of tourism trend factors
and cruise ferry option
• Fare structure appears reasonable in light of opportunity costs
• Revenue projections should be revised to reflect higher traffic
levels under cruise ferry option
• Quantification of economic impacts seems reasonable, with
some concern about how impacts are incorporated in benefitcost analysis
Spencer Economic Consulting
The Impact of a ferry service on the
economy: the case of Nova Scotia, 2010
• Identify and quantify the economic
impacts of the loss of the YarmouthMaine ferry service
• Examine impacts on tourism and
industry
• Quantify direct impact on tourism
receipts
• Quantify economic impact using
tourism multipliers
• Compare subsidy cost with loss impact
• Annual ferry subsidy of $6.0 million
would generate $22.2 million in
tourism revenue to Nova Scotia
• Loss in income results in liquidation of
assets and out-migration of labour
• Loss of ferry results in isolation of the
region
• Assumptions made to generate tourism
receipts are not explicit (number by
type, length of stay, average
expenditures)
• The study fails to provide detail on
how the impacts were calculated.
Belleclaire Consulting, et al.
The Digby-Saint John Ferry Service –
Impacts and Options, 2006
• Determine local & regional impacts of loss
of ferry service
• Identify options for future service
• Identify factors affecting ferry traffic
• Assess economic/social impacts in area
• Review service options
• Conduct statistical overview
• Assess changes in transportation
infrastructure & importance
• Assess business circumstances
• Estimate impact of ferry cessation
• Conduct options analysis
• Loss of service creates impact estimated at
$20 million annually in higher costs and lost
industry & labour income
• Ferry offers cost effective service
• Cannot operate without public support
• Uncertain whether traffic decline is
permanent
• Impacts based on then current traffic levels;
further declines have occurred
• Options to continue the service – refined,
revitalized or specialized – would require
public support
• Complete list of indicators and sound basis
for estimating impacts
• Trucking impact valid at time but exceeds
current cost due to decline in traffic
• Other impacts exceed current cost due to
decline in passenger traffic
• Financial analysis not done due to urgency
of study. Detailed assessment of options
covered in CPCS Transcom study (2010).
12
Belleclaire/Geoplan Opus/MariNova, The Digby-Saint John Ferry Service: Impacts
and Options, 2007
This study was commissioned shortly after Bay Ferries announced its intention to terminate the
service in 2006. The objectives were to quantify economic impacts in the region and to examine
options for the service – to terminate it; refine it through refurbishment; revitalize it with a more
modern vessel; or, specialize it with a combination of vessels and routes closely aligned to traffic
types and trip purposes. Underpinning the options analysis was an assessment of factors affecting
ferry traffic trends over the years.
The study concluded that termination of the service would cost the economy about $20 million
annually. It also found that while the ferry represents a cost-effective service, it is unlikely that at
then current traffic levels, any of the options under consideration could operate without public
support. This observation was not based on an analysis of commercial viability. Such analysis
followed in 2010 and is contained in the CPCS Transcom study, which essentially confirmed the
likely need for continued public support under the assumed traffic levels.
2.3
Concluding observations - U.S. visitor traffic
The general decline in the number of overnight U.S. visitors to Nova Scotia began in 2003. The
decline was not confined to the Yarmouth-Maine ferries, but was experienced at all entry points.
U.S. overnight visitors arriving by road (including ferry) declined from 229,000 in 2003 to
105,600 in 2010, a drop of 53%. This decline reflects the effects of the various factors cited in
Section 2.1, above. Note that the data refer to visitors, not passengers. Decline by entry point is
depicted in Figure 2.4, with details provided in Table 2.2.
Figure 2.4
U.S. visitors to Nova Scotia by point of entry
120,000
Overnight visitors
100,000
80,000
Yarmouth
Amherst
60,000
Digby
Caribou
40,000
20,000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Nova Scotia Department of Development and Tourism
Gardner Pinfold
13
Table 2.2
U.S. overnight visitors to Nova Scotia arriving by road by point of entry: 2000-2010
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
% decline
Total
226,237
217,072
229,293
186,714
184,794
146,860
139,916
127,316
100,573
111,011
105,595
53%
Amherst
105,004
46%
95,256
44%
97,773
43%
75,117
40%
88,965
48%
71,355
49%
76,578
55%
70,071
55%
56,774
56%
71,081
64%
82,166
78%
22%
Yarmouth
81,646
36%
83,763
39%
90,307
39%
79,077
42%
67,840
37%
48,675
33%
39,979
29%
34,381
27%
26,177
26%
23,416
21%
71%
Caribou
25,377
11%
24,125
11%
27,671
12%
22,021
12%
17,509
9%
15,999
11%
12,995
9%
11,676
9%
8,734
9%
9,360
8%
9,832
9%
61%
Digby
14,210
6%
13,928
6%
13,542
6%
10,499
6%
10,481
6%
10,831
7%
10,364
7%
11,188
9%
8,889
9%
7,153
6%
13,598
13%
50%
Note: Yarmouth and Digby decline measured from 2000 to 2009.
Source: Nova Scotia Department of Economic Development and Tourism.
A close examination of the data in Table 2.2 reveals several points worth noting:

The decline was much more severe at Yarmouth than at other entry points: 71% vs. 22%
at Amherst, the main point of entry since 2004. Yarmouth also exceeded the provincial
average of 53%.

The data do not include walk-on passengers, of which there were upwards of 40,000 each
way on the Yarmouth ferries in the late 1990s and early 2000s.

For several years in the early 2000s, Yarmouth and Amherst each accounted for about
40% of total U.S. overnight visitors. In 2003, Yarmouth was the leading point of entry,
with 42% of the total. Two ferries operated that year, one from Portland and the other
from Bar Harbor.

After 2004 and up to 2009, while The Cat was the only ferry operating between
Yarmouth and Maine, visitors entering Nova Scotia at Yarmouth dropped by 65%
compared with just 20% at Amherst. Notwithstanding the barrier to tourism that the long
drive from New England to Nova Scotia presents and the availability of the option to take
a ferry to limit the impact of that barrier, in light of the visitor entry data, it is difficult to
avoid the conclusion that the ferry service itself presented a barrier of its own.8

After several years of decline culminating in the sharp drop in 2008 (about 25% in one
year) during the height of the recession, the number of U.S. visitors increased by 10% in
2009. Virtually all of this gain occurred at Amherst, with Yarmouth continuing to drop.
Amherst accounted for 64% of visitors; Yarmouth for just 21%.

What could have been the first sign of a recovery trend in 2009 was short-lived. The
number of U.S. visitors dropped in 2010, though was still above the level in 2008. The
termination of the ferry clearly was a major contributing factor to the decline.

Two entry points gained at Yarmouth’s expense: Amherst increased by about 11,000 and
Digby by about 6,400. But these gains were not enough to offset the Yarmouth loss,
based on 2009 figures (23,400).
8
CPCS Transcom, South West Nova Scotia Transportation Study, on page 68, makes the point that motion
sickness was frequently cited in customer satisfaction surveys as a reason why The Cat would not feature in
future travel plans.
Gardner Pinfold
14
Gardner Pinfold
3
Ferry configuration and financial analysis
3.1
Operational considerations
Criteria
The 2010 CPCS Transcom study examined an exhaustive list of ferry options and configurations
based on criteria developed through extensive consultations with regional stakeholders and
considerable research, including previous reports conducted at various points over the past 20
years.9 This study is not intended to, and nor does it propose to, “reinvent this wheel”. It accepts
these criteria, though the focus of this study is the Yarmouth-Maine ferry, not the transportation
system as a whole. It does not examine the SWNS transportation system except insofar as the
system affects the Yarmouth-Maine ferry and the ferry affects the system.
To reiterate these criteria, the Yarmouth-Maine ferry should:







Respond to the needs of the tourism industry
Be safe and reliable
Have a convenient schedule and suitable frequency
Be comfortable with modern amenities
Be competitively priced and affordable
Provide a transportation option for commercial interests including the fishing industry
Be commercially viable.
Though there would not be any surprises in this list, it is important to highlight the importance of
the needs of the tourism industry. The next four criteria flow from this consideration. As a
passenger vessel, the ferry must of course be safe and reliable. If the ferry is to attract tourists, its
schedule should suit the needs of its customer base. If it is to compete with a well-established
cruise industry operating between the U.S. northeast and Nova Scotia, then it should offer similar
amenities and at competitive prices. Pricing should also take the costs associated with alternative
means of travel to Nova Scotia into consideration – road (including via Digby) and air.
The needs of the fishing industry and other sectors dependent on efficient transportation to and
from the U.S. are of secondary importance if for no other reason than a suitable option already
exists – the Digby-Saint John ferry. Hence the wording of the industry criterion – to provide an
option – an alternative when circumstances are such that the Digby ferry is not available (full) or
not convenient (schedule).
And lastly, the service should be capable of operating “out of the fare box” – independently of
public support. This is vital if the service, and those directly and indirectly dependent on it, are to
escape the inherent uncertainty surrounding any otherwise commercial venture whose on-going
viability relies in part on public funds.
9
For a discussion of these criteria and the ferry configurations and options that flowed from them, see
CPCS Transcom, South West Nova Scotia Transportation Study, Chapter 5.
Gardner Pinfold
15
16
Ferry options
Three ferry types offer potential to meet the criteria:

Cruise ferry: this vessel combines the features of a cruise ship and a ferry capable of
accommodating large numbers of passengers and cars, as well as large commercial
trucks. A cruise ferry would offer a wide range of amenities including cabins, recreation
and entertainment facilities, gambling and fine dining. The range and quality of
amenities makes the ferry an attraction in itself, in addition to meeting its transportation
function. The Scotia Prince was a cruise ferry, though it lacked many of the amenities
found in today’s modern vessels.

Fast ferry: this vessel is capable of handling large numbers of passengers and cars, but
offers a limited range of amenities and is usually deployed on short routes (under two
hours) featuring relatively calm sea states. The attraction of the fast ferry is just that –
speed. Its catamaran hull structure and power provide the basis for the speed, but at the
expense of relatively high operating costs and the potential for passenger discomfort. The
Cat offers a good example of a modern fast ferry.

Ropax: this vessel is designed to carry commercial vehicles (both trucks and drop
trailers) as well as the potential for hundreds of passengers and cars. Modern versions of
such vessels would include the ferries operating between North Sydney, Nova Scotia and
Port Aux Basques and Argentia, Newfoundland and Labrador.
The ability of each of these ferry types to meet the criteria varies. Although each has its
strengths, the Cruise Ferry would appear to be the strongest candidate, followed by the Ropax and
the Fast Ferry. The cruise ferry M/F Princess Seaways, capable of carrying 1,200 passengers and
550 cars, illustrates the kind of vessel that would meet the specifications for the Yarmouth-Maine
service (Figure 3.1).
Figure 3.1
http://www.ferry-site.dk/ferry
Gardner Pinfold
17
The case for the Cruise Ferry rests on its ability to pitch itself in the strongest growth market –
cruise travel. The right vessel, if well marketed and managed (including competitive fare
structure), offers considerable potential to approach the high traffic years of the late 1990s and
early 2000s. Table 3.1 provides a summary of the strengths and weaknesses of each vessel type
against the criteria.
Table 3.1
Ferry type and ability to meet operational criteria
Respond to the needs
of the tourism industry
Safe and reliable
Convenient schedule
and suitable frequency
Comfortable with
modern amenities
Competitively priced
and affordable
Provide a
transportation option
for commercial
interests including the
fishing industry
Commercial viability
Cruise Ferry
! Yes, preferred vessel
type; would be an
attraction in itself
! Offer potential to
attract motor coach
traffic
! But, on board
amenities could limit
shore spending if
short turn around
! Yes, vessels are large
enough to operate
safely and reliably in
open water in Gulf of
Maine
! Yes, can operate on
daily return schedule
between key Maine
ports
! Yes, offers the
greatest range of and
highest quality
amenities
! Ship size ensures
comfortable passage
! Has to be if operator
wants to attract
passengers
! Good potential to
offset fare with strong
ancillary revenues
! Yes, many cruise
ferries offer capacity
for this
! May be discouraged
due to nature of
vessel, target market
and revenue loss
! Yes, offers best
potential for return to
high tourism traffic
volume
Fast Ferry
! Yes, can carry large
numbers including
cars
! Allows multiple trips
on short route
! Limited potential for
motor coaches
! But experience
indicates this is not a
preferred option
! Yes, though sea state
conditions can limit
operations,
particularly on long
routes
! Yes, ferry speed
offers considerable
potential to set/adjust
schedules
! No, limited amenities
due to ship
configuration
! Strong potential for
passenger discomfort
in Gulf of Maine
wants to attract
passengers
! Limited potential for
ancillary revenues
! No, ferry
configuration
provides limited
scope for commercial
traffic
! No, experience
indicates that fast
ferry faces viability
obstacles
Ropax
! Possibly, but offers
limited amenities
! Potential conflict with
commercial vehicles
and tourists
! Yes, vessels are large
enough to operate
safely and reliably in
open water in Gulf of
Maine
! Yes, can operate on
daily return schedule
between key Maine
ports
! Yes, though range of
amenities narrower
than on cruise ferry
! Ship size ensures
comfortable passage
wants to attract
passengers
! Has to be priced to
attract commercial
vehicles as well
! Yes, vessel is
designed for this
! Commercial vehicles
not the target for
Yarmouth-Maine
service
! Limited demand
! Possibly, but return to
high tourism numbers
turns on cruise ship
amenities
The selection of a vessel would depend on detailed study by the ferry operator, but for purposes
of this analysis, the specifications are assumed to fall into the following ranges:
Gardner Pinfold
18
Vessel type
Passenger capacity
Berths
Passenger vehicles
Commercial vehicles
Cruise ferry
1,000-1,200
600-800
200-300
25-50
Route options
Yarmouth-Portland and Yarmouth-Bar Harbor would both be candidates for a revived ferry
service.

Infrastructure and facilities: both ports offer infrastructure and facilities suitable for a
cruise ferry and both have a lengthy, recent and successful history as terminals for a
Yarmouth-Maine service.

Distance and crossing time: Bar Harbor would appear to have an advantage because it is
just 90 nautical miles from Yarmouth. The crossing is 5-6 hours using a conventional
vessel. This offers some flexibility with schedules and allows ample time for return
crossings within a 24-hour period. Portland is double the distance, with a crossing time
in the 10-11 hour range (the lower end of the range is within reach for vessels operating
at 20 kn). This would allow daily return crossings, though scheduling and turn-around
times in port would be somewhat constrained. For passengers interested in the cruise
experience, the longer crossing time may be preferred.

Cost of service: twice the sailing distance between Yarmouth and Portland means higher
fuel costs, with correspondingly higher maintenance expenses. It would also likely mean
sailings on six rather than seven days per week, since a day would be needed to carry out
routine cleaning, maintenance and provisioning. Operating on a 24-hour rather than a 1214 hour schedule would also likely result in higher crew costs. Of course, the absolute
level of costs is not the issue, but rather costs in relation to revenues. A higher cost
service may be the preferred alternative if it generates higher net revenues.

Schedule: early morning (0800-0900 hr) arrivals/departures from Yarmouth and evening
arrivals/departures from Portland (2000-2100 hr) worked well for the Scotia Prince when
it operated on this service. This would suit the SWNS tourism industry, since many
passengers would spend the night in the area before departing. Also, this schedule would
avoid conflict with cruise ships in Portland that enter port by mid- morning and depart in
late afternoon. With a shorter crossing time, the Bar Harbor service could offer more
flexibility, though scheduling around cruise ships would also be an issue there. If night
crossings were to be avoided, this could mean early morning departures from Bar Harbor
and late evening arrivals back in Bar Harbor, with the vessel overnighting there (this was
similar to The Cat schedule for both Portland and bar Harbor). With Yarmouth arrivals
and departures in the afternoon, this would not work as well for the local tourism industry.

Revenues – where is the traffic likely to be higher: this would tend to favour Portland,
since it is within a six-hour drive of a population base of some 30 million including most
of the major cities in New England and of New York. This is ideal for motor coaches.
Bar Harbor adds an additional 3-4 hours driving time. Nonetheless, though it is more
distant from major population centres, Bar Harbor is a popular tourist destination (near
Acadia National Park). During the 1990s, when ferries operated between Yarmouth and
both Portland and Bar Harbor, passenger numbers via Portland tended to be about 50%
higher. The balance settled at 50:50 in the early 2000s when The Cat was introduced, a
response to the novelty of the vessel and the relatively short duration of the trip.
Gardner Pinfold

19
Advantage for commercial interests: neither route would offer much advantage over
the existing Digby-Saint John service as far as time to major markets in the U.S. is
concerned. All routes would place a tractor-trailer in Boston in about 12-13 hours. By
virtue of a late afternoon departure from Yarmouth, a Bar Harbor service would allow
trucks carrying fish and seafood to arrive in Boston within 24 hours of processing and in
time to meet market requirements (5 am). A Portland service, with its morning departure
from Yarmouth, would not meet these conditions. A general disadvantage of a Yarmouth
service (both Portland and Bar Harbor) compared with Digby is that it would be seasonal.
The fishing industry relies on a year-round service.
Against these considerations – proximity to major population centers in particular – Portland
would appear to be the stronger candidate. Accordingly, it is a Yarmouth-Portland service that is
assessed in detail.
SWOT analysis
An assessment of the strengths, weaknesses, opportunities and threats of a Yarmouth-Portland
ferry service are summarized in Table 3.2. This analysis captures many of the points made in
Section 3.1, above, but extends the discussion to the broader implications of a ferry service from
the perspective of the users and those in Nova Scotia who would be affected by it. The
underlying assumption is that the U.S. economy is well on the road to recovery.
3.2
Traffic projection
Passengers and vehicles
As recently as 2002, Nova Scotia attracted some 230,000 U.S. overnight visitors. About 40% of
these visitors – 90,000 – arrived by ferry via Yarmouth. In addition, about 55,000 U.S. visitors
arrived in Yarmouth as walk-on passengers, bringing the total to 145,000 visitors. Allowing for
some adjustments for those heading back to the U.S. by another route, and for those arriving at
another entry point and heading back via the ferry, the visitor number can reasonably be
converted to passengers by doubling it. Adding in Canadians and international visitors using the
Yarmouth ferry brings the total number of passengers to about 320,000 in 2002.
Developing a traffic projection for a renewed Yarmouth ferry service is complicated by the many
factors impinging on the decision of Americans to travel, not just to Nova Scotia, but also to any
destination in Canada. These factors are reviewed in Chapter 2 in the context of the decline in
visitor numbers since 2002. Two of these factors stand out, providing a source of optimism about
a recovery of travel to Nova Scotia via Yarmouth:

The economy will improve: so much of the decline in travel can be explained by
economic conditions in the U.S. and Canada. The U.S. economy will begin to improve in
the next year or two. As it does, three things will happen:
•
Gardner Pinfold
The U.S. dollar will begin to appreciate against most currencies, including the
Canadian dollar. This will make travel to Canada more affordable.
20
Table 3.2
Yarmouth - Portland Cruise Ferry Service: SWOT analysis
Strengths
Tourist traffic
Walk-on (Cruisers)
Motor coach
Auto
Commercial traffic
Fishing industry
Manufacturing
Tourism industry
Weaknesses
• Need border documents
• Limited time in Yarmouth,
unless stay extended to
include overnight
• Yarmouth is point of entry,
not the destination
• High cost to bring vehicle
• Need border documents
• Limited time in Yarmouth
Region
• Potential to develop
overnight packages in
Yarmouth/Acadian shore
region
• Strong potential market
• Tie-in to tour packages
• Potential market for ferry
and for Yarmouth
• 10-11 hour trip allows
favourable schedule
• Discretionary spending
occurs on ferry, not in port
• Walk-ons don’t leave the
ferry
• Competition from cruise
industry
• Cruise industry
• Exchange rate/fuel cost
• Reduces truck road costs
• Slight gain in overall travel
time
• Schedule driven by tourism
• Poor fit for Quebec
backhaul
• Trucks a poor fit for ferry
• May not be good fit for
cruise ferry
• Provides option vs. Digby
and all highway route
• Potential to undermine
Digby service
• Provides option vs. Digby
and all highway route
Digby service
• Increases demand for
tourism support services
• Ferry provides opportunity
to showcase province
Digby service
• May simply redirect traffic
from other routes
• Spread peak season road
use more evenly across
province
• Could complement Digby
with circular route
• Reduce road accidents
• Could advance the need for
highway upgrades
• Potential to reduce travel
time and road costs
• Potential two-way traffic
• Increases SWNS traffic
Provincial
• Potential to increase US
traffic to province
• Yarmouth must expand
tourism opportunities
• Long drive to central/
northern NS
• Potential to reduce highway
wear/tear via Amherst
• Would lead to increased
use/cost on 101/103
• Takes pressure off at peak
times
• Offsets auto carbon
emissions
• Undermines Digby service
• Zero sum game
• Increased sulphur emissions
unless exhaust scrubbed
Digby-Saint John Ferry
Environment/social
Threats
• Portland within 4-6 hours
of 30 million population
• Ferry cruise an attraction in
itself – 1-2 day trip
• Overnight cruise ferry trip
used as part of tour offering
• Portland within 4-6 hours
of 30 million population
• Ferry cruise an attraction in
itself – augments road trip
Regional
Transportation industry
Road infrastructure
Opportunities
• Could set up destructive
price competition
Gardner Pinfold

21
•
Crude oil and petroleum product prices will decline in response to the
strengthening U.S. dollar (this will reverse the pattern of the past few years when
much of the increase in petroleum prices was due to the fall in the value of the
dollar). As fuel prices decline in absolute and relative terms, Americans will
return to the roads.
•
Incomes in the U.S. will begin to rise, promoting consumer confidence and
greater discretionary spending.
The right ferry will re-build traffic: the collapse in ferry traffic was not due just to the
economic climate, but also to the ferry itself. That the drop in traffic on the ferry was
much steeper than the decline in U.S. tourism to Atlantic Canada and Nova Scotia
provides evidence that visitors were avoiding The Cat. A service featuring a cruise ferry
offering facilities and amenities comparable to those found on cruise ships would provide
an attraction in itself, as well as a more comfortable transportation mode to Nova Scotia.
Part of the reason for optimism that a cruise ferry would re-build traffic lies in the growth
in cruise travel from the U.S. to Canada over the past decade. It is the fastest growing
segment, with U.S. passenger numbers on routes from New York and Boston to Halifax
rising from 170,000 in 2006 to 261,000 in 2010.
We believe that as the economy recovers, an effective marketing campaign combined with
creative tour packaging could see a recovery of U.S. traffic exceeding 100,000 passengers
(50,000 visitors) in the first year of a renewed Yarmouth-Portland cruise ferry service (See Annex
C for a detailed discussion of tourism trends). Excluding walk-ons, this represents just 35% of
the number of U.S. overnight visitors to Nova Scotia in 2010. Adding Canadian and international
passengers could bring the first year forecast to 120,000 (Table 3.3). The distribution of
passengers across categories is based on historical data.
Table 3.3
Yarmouth-Portland ferry passenger and vehicle forecast
Year
Walk On
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
50,000
46,000
46,600
47,200
47,720
48,250
48,780
49,300
49,840
50,400
Motor Coach
passengers
2,400
3,400
4,500
4,550
4,600
4,650
4,700
4,750
4,800
4,850
coaches (1)
50
70
94
95
96
97
98
99
100
101
Auto Overnight
passengers
65,500
58,700
59,500
60,110
60,720
61,440
62,150
62,860
63,470
64,180
vehicles (2)
26,200
23,480
23,800
24,044
24,288
24,576
24,860
25,144
25,388
25,672
Other Traffic Commercial
passengers
2,100
1,900
1,930
1,950
1,970
1,990
2,010
2,030
2,050
2,070
trucks
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
Total
passengers
120,000
110,000
112,530
113,810
115,010
116,330
117,640
118,940
120,160
121,500
Notes
1. Assumes 48 passengers per coach
2. Assumes 2.5 passengers per private vehicle
The forecast, shown in Table 3.3, is not fixed in a particular year, though we believe the 120,000passenger mark could be achievable in 2013. But to reiterate, achieving this (and building from
there) is contingent on a combination of:



Economic recovery leading to renewed consumer confidence;
A ferry that is an attraction in its own right; and
Effective marketing including a competitive fare structure.
Gardner Pinfold
22
Following the build-up of interest in the new service in Year 1, we would expect the numbers to
drop to the 110,000 range in the second year, grow by 2% in Year 2, and then settle at an annual
average growth rate of 1%.10 Motor coach travel is assumed to commence in Year 1 at a modest
50 buses due to the lead-time needed to plan itineraries. This increases to 70 coaches in Year 2,
and 95 by Year 4. The motor coach forecast is conservative by historical standards, which saw
triple the number travelling by ferry in the early 2000s. Interviews with U.S. tour companies
indicated considerable interest in a revival of the ferry service.
The starting point for this forecast is about 50% higher than that appearing in the 2010 study
conducted by CPCS Transcom.11 Though that study refers to its forecast as conservative, it does
not make explicit the assumptions on which the starting point was based. It simply starts with the
number of passengers taking The Cat in 2009 (80,000), its final year of service, as though this
should be interpreted as a reliable estimate of the number of travelers wishing to come to Nova
Scotia via a Yarmouth ferry. By failing to take into account the factors behind that low figure –
and how they could change in different circumstances – the study effectively freezes U.S. ferry
travel to Nova Scotia in the economic conditions dictated by the depth of the recession. This
saddles the analysis with a weak revenue stream that changes little over the forecast period.
Among our concerns with the CPCS forecast and its starting point:

Based on experience with The Cat: The traffic projection takes the last year of operation
of The Cat as its starting point. This might make sense if the replacement ferry and
service conditions were identical to the experience with that vessel. But according to
CPCS Transcom, part of the reason traffic levels fell so sharply on the Yarmouth-Maine
service were precisely because of vessel characteristics and confusion amongst travellers
concerning the schedule. Indeed, the Report allows that passenger levels could be “…50
percent of more above those contemplated” in the forecast should tourism markets
improve.12 But nowhere do the traffic projections and financial analysis take this upside
into consideration.

Insensitive to type of ferry service: The traffic projection was developed independently
of the type of ferry or the route. With the strong growth in cruise ship travel between
Nova Scotia and the U.S. northeast, it does not seem unreasonable to observe that a ferry
that provided the same kinds of amenities as a cruise ship would create considerable
interest. In other words, a cruise ferry would not only facilitate transportation to Nova
Scotia, it could induce travel.

Fails to consider changes in the factors that led to the decline in traffic: it is
unrealistic to assume that the adverse economic conditions contributing to the decline in
U.S. visitors will not improve over the forecast period. The relevant question is what
level of U.S. visitation is reasonable under favourable economic conditions. This does
not necessarily mean a return to the levels of the early 2000s, but it does mean that the
level is likely to be higher than 2009 levels when the combined effects of deep recession
and weak currency (as well as factors related to the ferry) contributed to the lowest
numbers in over 20 years.
10
Conference Board of Canada, Travel Markets Outlook for Nova Scotia, 2009-2014.
CPCS Transcom, South West Nova Scotia Transportation Study, p. 70.
12
Ibid, page 144. The statement refers to a fast ferry option, operating between Yarmouth and Bar Harbor.
11
Gardner Pinfold
23
Commercial
Based on historic commercial traffic patterns (fishing industry use of the Digby ferry) and an
assumed Yarmouth-Portland ferry schedule that does not meet fishing industry time-sensitive
criteria, the traffic forecast includes only a nominal level of commercial trucking (1,000 vehicles
over a six-month, 154-round trip season, implying an average of four trucks each way). Space
constraints at the Portland terminal (for queuing as well as inspection), as well as various fees not
applicable to land border crossings, also contribute to the low forecast.
3.3
Financial analysis
Revenues
Revenues are determined by applying fare structure to traffic levels and adding ancillary
spending. The objective for the ferry operator is to maximize revenues by finding the balance
between fare level and number of passengers. Setting the fare too high ordinarily results in
reduced revenue, since some prospective passengers will either not travel or find an alternative
means. Setting the fare too low means higher passenger numbers, but foregone revenue since
some passengers would have paid more.
There is no magic formula in designing a fare structure. In practice it can be an iterative process
to find the right balance. For purposes of this analysis, we use an avoided cost approach (the
maximum fare is determined by costs that are avoided by taking the ferry), taking into
consideration any other relevant market indicators. For example, prices paid for similar services.

Passengers: for simplicity we use a weighted average fare of $115 per person, whether a
walk-on, in a private vehicle or in a motor coach.13 This is comparable to currently
quoted per person fares on cruise ship travel between New York/Boston and Halifax, and
comparable to the fares charged on The Cat in its last years of service.

Passenger-related vehicles (PRV): the assumed fare is $225 based on the avoided cost
of car travel by road (fuel cost to Halifax 615 km @ $0.15/km=$92.25) plus overnight
accommodation at $125 = $217. Avoided car costs are in fact higher, but the full costs of
car use (not just fuel) are often not considered.

Commercial-related vehicle (CRV): the assumed fare is $1,000 for a tractor-trailer
based on the avoided marginal cost of road travel (net road travel cost Yarmouth-Boston
via Digby 565 km @ $1.50/km = $850 + ferry @ $450 = $1,300). 
Ancillary revenues: these are estimated at $5-6 million annually, based on average
spending of $50/person. This represents just under 25% of total ferry revenues.
Applying this fare structure to the traffic forecast produces an annual revenue stream in the $2426 million range (Table 3.4). Inflation is excluded from the analysis of both revenues and costs.
13
This is a weighted average of fares for berths and seats, assuming 1,200 passengers comprised of 900 full
fare ($100) and 300 half fare ($50), plus 250 two-person cabins @ $150/cabin. Fare excludes restaurant
and bar service. Cabin use is likely to be higher on the overnight service from Portland to Yarmouth, than
the day service in the other direction. The fare structure is likely to be more complex when various tour
packages and incentive discounts are considered.
Gardner Pinfold
24
Table 3.4
Yarmouth-Portland ferry: pro forma operating revenues ($000)
!"##$%&$'#
!"##$%&$'()$*+,-$#
Fare
(3)
225
225
225
225
225
225
225
225
225
225
PRV
revenue
5,895
5,283
5,355
5,410
5,465
5,530
5,594
5,657
5,712
5,776
./00$',+"-()$*+,-$#
Ancillary revenues
Total
Year
#
Fare (1) Revenue
PRV (2)
#
Fare (4) Revenue
(5)
revenue
1
120,000
115
13,800
26,200
1,000
1,000
1,000
6,000
26,695
2
110,000
115
12,650
23,480
1,000
1,000
1,000
5,500
24,433
3
112,530
115
12,941
23,800
1,000
1,000
1,000
5,627
24,922
4
113,810
115
13,088
24,044
1,000
1,000
1,000
5,691
25,189
5
115,010
115
13,226
24,288
1,000
1,000
1,000
5,750
25,441
6
116,330
115
13,378
24,576
1,000
1,000
1,000
5,817
25,724
7
117,640
115
13,529
24,860
1,000
1,000
1,000
5,882
26,004
8
118,940
115
13,678
25,144
1,000
1,000
1,000
5,947
26,283
9
120,160
115
13,818
25,388
1,000
1,000
1,000
6,008
26,539
10
121,500
115
13,973
25,672
1,000
1,000
1,000
6,075
26,824
Notes
1. Fare is a weighted average of seat (700) and cabin (250) fares.
2. Vehicle numbers based on 2.5 persons/car for overnight visitors (ie, excluding walk-ons and motor coach passengers).
3. Vehicle fare based on avoided road travel cost to Halifax (615 km @ $0.15/km=$92.25) plus overnight accommodation at $125 = $217.
4. Truck fare set below avoided road travel cost (Yarmouth-Boston via Digby 565 km @ $1.50/km = $850 + Digby ferry @ $450 = $1,300).
5. Ancillary revenues based on assumed on-board spending of $50/passenger.
Gardner Pinfold
25
Costs
A ferry operator would have the option of purchasing or chartering a vessel. The purchase option
would carry a price tag in the $50 million range for a used vessel.1 Current time-charter rates for
vessels of this type have been settling in the €15,000/day range ($21,000/day).2 The operator’s
decision would rest on the economics of the alternatives, including access to capital. The charter
option would limit risk and provide a relatively low cost way of testing the viability of the service.
A charter approach is used in the costing set out in Table 3.5. It assumes the vessel is charged to
the Yarmouth-Portland service for 180 days at $21,000/day. Underlying these figures is the
assumption the vessel would be used on another service for the balance of the year. Other key
operations assumptions are set out in the notes in Table 3.5. Total direct vessel operating costs
are estimated at about $19.0 million annually.
Administration and overhead costs are also set out in Table 3.5. These are estimated at about
$5.5 million annually. Maintenance costs cover both the Yarmouth and Portland terminal fees
and are based on passenger ($2.50/person) and vehicle ($5.00/car) fees charged by the respective
port authorities. Other fees, including dockage, would be subject to negotiation, but are usually
based length of vessel (the fee is $2.10 per foot in Portland). Details of fees and the extensive list
of regulatory requirements for vessels entering U.S. ports are set out in Annex A.
Viability
Given the traffic, fare structure and operating cost estimates, the service could expect to break
even or even generate a modest positive net return on operations. The cost estimate excludes
development and start-up costs, which are likely to be substantial (expected to be in the range of
$5-10 million). If these costs were to be borne by the operator, the service would operate at a loss
in the first year or two. Annual net revenues are set out in Table 3.6.
Table 3.6
Yarmouth-Portland ferry: net operating revenues ($000)
Year
1
2
3
4
5
6
7
8
9
10
Total revenue
26,695
24,433
24,922
25,189
25,448
25,747
26,020
26,281
26,540
26,824
Total cost
24,000
23,850
23,900
24,050
24,150
24,300
24,400
24,450
24,600
24,600
Net
revenue
!"#$%
%&'
(")!!
("('$
("!$&
("**+
("#!)
("&'(
("$*)
!"!!*
Source: Tables 3.4 and 3.5
1
This is a widely quoted estimate, though actual transactions are limited for this kind of vessel. A recent
example is the 25-year old cruise ferry, MV Bilbao (177m, 2,500 passengers and 580 cars), which was sold
in December 2010 for €37.7 million ($53 million). This is larger than the ferry contemplated in this report.
See, Business World, http://www.businessworld.ie/livenews.htm?a=2699310
2
Cruise and Ferry International, 2010. A time charter includes vessel and marine crew (deck and engine),
but excludes hotel crew and all variable operating costs (e.g., fuel, maintenance, provisions, etc).
Gardner Pinfold
26
Table 3.5
Yarmouth-Portland pro forma operating costs
Vessel
Charter fee (1)
Fuel (2)
Crew (3)
Maintenance (4)
Consumables (5)
Management & other
Year 1
3,800
6,300
5,000
1,000
2,000
500
Year 2
3,800
6,300
5,000
1,000
1,850
500
Year 3
3,800
6,300
5,000
1,000
1,900
500
Year 4
3,800
6,300
5,000
1,100
1,950
500
Year 5
3,800
6,300
5,000
1,200
1,950
500
Year 6
3,800
6,300
5,000
1,300
2,000
500
Year 7
3,800
6,300
5,000
1,400
2,000
500
Year 8
3,800
6,300
5,000
1,400
2,050
500
Year 9
3,800
6,300
5,000
1,500
2,100
500
Year 10
3,800
6,300
5,000
1,500
2,100
500
Subtotal
18,600
18,450
18,500
18,650
18,750
18,900
19,000
19,050
19,200
19,200
Administration & overhead
Labour
Maintenance (6)
Marketing
Administration & other
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
1,000
1,150
1,500
1,750
Subtotal
5,400
5,400
5,400
5,400
5,400
5,400
5,400
5,400
5,400
5,400
24,000
23,850
23,900
24,050
24,150
24,300
24,400
24,450
24,600
24,600
Total
Notes
1. Assumes a time-charter rate of !15,000/day at a current exchange rate of !1.00=CAN$1.40 ($21,000/day) for 180 day seasonal operation
2. Fuel cost assumes 154 sailing days with IFO consumption of 45 t/day @ $650/t and MDO consumption at 10 t/day @ $1,000/t for 180 days.
3. Crew cost based on hotel crew of 200 @$50,000/annum (adjusted for seasonal operation). Marine crew included in charter fee.
4. Annual maintenance cost (@12% of operating costs) are charged half to the Yarmouth service, and half to off-season operations.
5. Includes costs of food, beverage, duty free and related expenses.
6. Terminal maintenance fee paid to port authorities based on per passenger and per vehicle charges
Gardner Pinfold
4
Regional economic impacts
4.1
Impact of the loss of the Yarmouth ferry
Overview
December 2009 marked the end of the ferry service that had linked Nova Scotia to the state of
Maine for more than 50 years. Declining U.S. visitation to Nova Scotia, falling ridership along
the Maine-Yarmouth ferry route, and the Government of Nova Scotia’s decision to terminate its
annual subsidy to the service’s operator contributed to the loss of an important component of the
SWNS transportation and tourism infrastructure.
Since the termination of ferry service in
2009, changes in the commercial
“From a provincial perspective, we
landscape of many communities in the
are telling our closest, biggest market
region are apparent, particularly in the
that we are not open for business.
Town of Yarmouth. Businesses across a
number of sectors saw major declines
We are taking away options when the
during the first summer the ferry service
global tourism marketplace is adding
was absent, with several prominent
them at a very fast pace.”
tourism-based operations closing at the
end of that first season. A number of
- General Manager of a major
tourism related business owners stated
that the impact of the loss ferry service
hotel operation in the region.
was immediately noticeable and that the
community has been in “coping mode”
since. Stakeholders in the accommodations and restaurant industries in Yarmouth, Shelburne,
and Liverpool noted that:

The loss of the ferry showed up in the immediate elimination of identifiable portions of
business in both accommodations and food service.

Business closures in the area created gaps in infrastructure and reduced capacity making
Yarmouth and other communities less attractive as destinations for both tourism and
business travel.

Local businesses have been scrambling to find new business models and are no longer
working as a cohesive community.

Many speak of the emotional impact of the loss of ferry service on the community being
as evident as the decline in business activity.
Although many point to the complete loss of ferry service in 2009 as a critical event in the decline
in tourism-based business activity in the region, it is widely acknowledged that the introduction
of The Cat high-speed ferry in 1998 and the termination of the Scotia Prince in 2004 were major
contributing factors. For over 30 years, passengers on the Scotia Prince arrived in Yarmouth in
the morning having taken an overnight cruise from Portland. They often ate and shopped in town
before moving on, or stayed a night or more in the area. Passengers leaving from Yarmouth in
Gardner Pinfold
27
28
the morning routinely stayed in the area overnight visiting restaurants, retail outlets and local
attractions. Although The Cat offered a more time-efficient service to Maine, its schedule
disrupted the business pattern that had evolved by setting departure times from Yarmouth at
either 16:00 or 17:00, which gave most passengers little reason to stay in the area and saw most
simply pass through on their way to and from the ferry.
The Food and Beverage Industry
The restaurant business in Southern Nova Scotia evolved to some extent around the YarmouthMaine ferry service. During the ferry’s operating season, restaurants and cafes in the area came
to rely on a very predictable business cycle that was closely linked to the ferry’s arrival and
departure. All restaurant operators interviewed in Yarmouth, Shelburne and Liverpool reported
that, during the years of ferry operation, many restaurants opened for lunch and remained open
for what many considered a second seating, which was comprised almost entirely of passengers
travelling to or from the ferry. All restaurant operators interviewed stated that this lunchtime
trade disappeared in 2010, and many are no longer open during that time of the day.
Not all restaurant businesses in the area cater specifically to the tourist market. Many are located
off the beaten path and serve a predominantly local customer base. Although these businesses
noticed a drop in the number of tourists they served last year, the economic impact of business
closure and a loss of employment are becoming apparent in a noticeable decline in local business.
Accommodations
Tourism in the province of Nova Scotia has been declining over the past decade. Many
communities from Cape Breton to Digby have seen visitation and demand for accommodations
decrease steadily since 2002. While all but two tourism regions in the province have experienced
this erosion, none have felt it as acutely as the Yarmouth and Acadian Shores region. Demand
for fixed roof accommodations, as measured by room-nights sold, dropped over 40% from 2002
to 2010 (Figure 4.1).
Figure 4.1
!"#$"%&'(")*+'%("),%)-../)0,(+&1)2.34)
56)7.8#,1/)-"(,.%)
9::9)&.)9:;:)
I21J9,H3$
G62E1+<0$4$5H6-96,$/0123:$
!'#$
!'"#$
D12<0+EF3286,-$/0123$
"%#$
B673$C23<1,$
!"%#$
A6:<32,$/0123$
!&%#$
=689>6?$@3<21$
%#$
/1+<0$/0123$
!"%#$
*+,-.$/0123$4$5,,67189:$;6883.$
!()#$
!""#$
!')#$
!%)#$
!&)#$
!")#$
)#$
")#$
&)#$
Source: Nova Scotia Department of Economic Development and Tourism
Gardner Pinfold
29
The effect of this loss of tourism activity has not been isolated to the Yarmouth and Acadian
Shores region. Tourism operators in the nearby communities of Pubnico, Shelburne, and
Liverpool report a steady decline in demand since the early 2000s, with a major drop in business
in 2010.
Like the restaurant industry, accommodations business in some communities in SWNS was
intimately linked to seasonal ferry traffic. Hotel operators in the area stated that their summer
high season (and rates) started the day the ferry route opened for the season. Operators
interviewed reported summer occupancy rates of 90% and greater when the ferry was in
operation, with a dramatic drop in 2010 of at least 25% in the towns of Shelburne and Liverpool
and up to 75% in a number of operations in Yarmouth. A major accommodations industry
operator noted that the total number of
available rooms in Yarmouth has
The 65-room Rodd Colony Harbour
dropped from 700 to 300 since 2009.
A large percentage of room nights sold
at Yarmouth’s larger hotel properties
came from motor coach tours that
travelled the Maine-Yarmouth ferry
route. The loss of the ferry service
meant an immediate drop of 1,000
motor-coach room nights in 2010 for
one operator.
Inn in Yarmouth closed in January
2011 after 40 years of operation. The
hotel’s owner attributed the closure to
the major decline in room nights sold
after the closure of the YarmouthMaine ferry service in 2009.
Over the past year, several prominent hotels, motels, cottages, and B&Bs in the region either
closed or were converted to rental apartment complexes. Tourism industry stakeholders note that
this loss of commercial infrastructure has greatly reduced Yarmouth and the surrounding area’s
ability to attract visitors. Further, many accommodations operators fear the loss of low-season
meeting and convention business resulting from the reduction of total available room nights and
other amenities necessary to draw corporate business.
Retail and Attractions
Many U.S. visitors arriving via the ferry were customers of small retail stores and visited
museums and other attractions in the area. The loss of ferry service led to a major decline in
retail sales in gift shops and clothing stores in 2010, particularly in the town of Yarmouth. Sales
at a number of stores in Yarmouth, Shelburne and Liverpool were reportedly down more than
50% last year with a number of locations having to close. Retailers interviewed related that early
sales this season point to further declines.
A large percentage of visitors to local attractions were day visitors from Maine, as well as
passengers travelling to or from the ferry. Museums in the area saw visitation and admissions
revenue drop 50% or more in 2010.
Anticipating a slower season this year,
The Yarmouth County Museum and
operators have made adjustments in
Archives saw 9,464 visitors in 2008.
staffing and have sought new sources
In 2010, 5,563 people toured the
of funding to try and compensate for
organization’s three sites – a decline
falling revenue.
of over 40%.
Gardner Pinfold
30
As visitors to a waterfront art gallery in Yarmouth dropped dramatically last year, many of the
artists that make up the co-op were forced to leave. Having dropped the membership fee for
participating artists, the co-op’s sales now barely cover rent and utilities.
4.2
Economic impact of a new cruise ferry service
Tourism impacts
A revived cruise ferry service operating between Yarmouth and Maine would reverse the
negative economic impact the region has suffered over the past decade due to declining U.S.
tourism. The positive impact would be felt throughout the region as soon as the service begins,
and would gradually grow, as tour packages are developed to take advantage of emerging service
offerings.
Quantifying the regional economic impact is a matter of defining the region or regions in
question, and then estimating spending levels associated with ferry travel.

To define the impact areas, we use the Nova Scotia tourism regions, specifically,
Yarmouth and Acadian Shores (Yarmouth and Digby Counties) and South Shore
(Shelburne, Queens and Lunenburg Counties). The rest of Nova Scotia is a residual
region where the balance of tourism spending occurs.

To determine spending levels, we start with ferry passenger numbers, estimate the
percentage likely to spend time in the regions, and then apply average daily spending
amounts. We build in an assumption that spending levels will rise 15% over the 10-year
study period, as tourism industry operators develop new attractions.
Based on the traffic forecast set out in Table 3.3 and relying on average spending amounts, we
estimate that the revived Yarmouth ferry would account for $16.3 million in annual gross tourism
spending throughout the province (Table 4.1). Of this, $3.5 million (about 21%) would be spent
in the impact regions. Regional spending would be divided between Yarmouth/Acadian Shore
(75%) and South Shore (25%). This distribution is an estimate based on the relative decline in
room-nights between the two impact regions since 2002 (see Figure 4.1 and Annex B for details).
Table 4.1
Total ferry-related tourism expenditures by region ($)
Year
1
2
3
4
5
6
7
8
9
10
Yarmouth and
Acadian Shores
2,667,654
2,454,241
2,525,137
2,598,081
2,673,131
2,750,350
2,829,800
2,911,544
2,995,650
3,082,185
South Shore
889,218
818,080
841,712
866,027
891,044
916,783
943,267
970,515
998,550
1,027,395
Rest of Nova Scotia
12,787,691
11,764,676
11,820,518
11,875,133
11,928,458
11,980,426
12,030,969
12,080,017
12,127,497
12,173,333
Nova Scotia
16,344,562
15,036,997
15,187,367
15,339,241
15,492,633
15,647,560
15,804,035
15,962,076
16,121,696
16,282,913
Annex 2 for details and assumptions
Gardner Pinfold
31
Tourism spending creates economic impacts in the regions and throughout the province. These
include direct, indirect and induced impacts.

Direct impacts occur within the tourism industry, defined broadly to include hotels,
restaurants, gift shops and transportation companies. As spending by tourists increases,
the level of activity in these sectors increases to meet demand.

Indirect impacts occur because of the increase in economic activity in the industries that
supply goods and services to hotels, restaurants, etc. These include food processors,
wholesalers, trucking companies, manufacturers, and maintenance and repair companies.

Induced impacts occur as a result of the spending of income earned by those employed
in direct and indirect activities. The sum of indirect and induced activities is often
referred to as the “spin-off” effect.
Several indicators are typically used to measure economic impact including Gross Domestic
Product or GDP (the value of final goods and services produced), employment and income.
Federal and provincial taxers are also reported.
Tourism impacts attributable to the ferry are reported in Table 4.2 for each area of interest:
Yarmouth/Acadian Shores, South Shore, Rest of Nova Scotia, and total Nova Scotia. The
$16.3 million in total tourism spending results in overall gross impacts (direct and spin-off) of:

GDP: a contribution to GDP of $12.0 million for the province as a whole. Spending in
Yarmouth/Acadian Shores and South Shore generates GDP of $2.0 and $0.9 million,
respectively.

Employment: the creation of about 260 full-time equivalent (FTE) jobs in the province
as a whole. Spending in Yarmouth/Acadian Shores and South Shore generates about 60
and 20 FTE, respectively.

Labour income: the creation of $8.0 million of labour income in the province as a
whole. Spending in Yarmouth/Acadian Shores and South Shore generates $1.3 and
$0.4 million of labour income, respectively.

Federal taxes: the generation of $1.2 million in federal taxes in the province as a whole.

Provincial taxes: the generation of $1.7 million in provincial taxes in the province as a
whole.
These impacts are described as “gross” because they do not take into consideration U.S. and
Canadian visitors who would have come to Nova Scotia even without the ferry. The visitor data
in Table 2.2 may be interpreted to indicate that in the range of 15% of the visitors in the traffic
forecast in Table 3.3 would have come anyway. Stated alternatively, data indicate that in the
range of 85% of the provincial impacts in Table 4.2 can be interpreted as “incremental” – they
would not occur without the ferry. By contrast, it is safe to say that most of the regional impacts
can be interpreted as incremental, since few of the visitors ordinarily entering via Amherst are
likely to have had the Yarmouth area as their destination.
Gardner Pinfold
32
Table 4.2
Economic impacts arising from ferry-related tourism expenditures (Years 1 and 10)
Yarmouth and Acadian
Shores
Year 1
Year 10
South Shore
Year 1
Year 10
Rest of Nova Scotia
Year 1
Year 10
Nova Scotia
Year 1
Year 10
Gross Domestic Product (GDP)
Direct
Spinoff
Total
1,071,198
889,341
1,960,539
1,237,653
1,027,537
2,265,190
357,066
296,447
653,513
412,551
342,512
755,063
5,134,903
4,263,154
9,398,057
4,888,207
4,058,340
8,946,547
6,563,166
5,448,942
12,012,108
6,538,411
5,428,390
11,966,801
Employment (Jobs)
Direct
Spinoff
Total
43
15
58
50
17
67
14
5
19
17
6
22
206
72
278
196
68
264
263
92
355
262
92
354
Employment Income
Direct
Spinoff
Total
798,116
519,587
1,317,703
922,137
600,327
1,522,464
266,039
173,196
439,234
307,379
200,109
507,488
3,825,857
2,490,698
6,316,555
3,642,052
2,371,038
6,013,090
4,890,012
3,183,481
8,073,493
4,871,568
3,171,474
8,043,042
Federal Tax Impacts
Direct
Spinoff
Total
116,693
75,969
192,661
134,826
87,774
222,599
38,898
25,323
64,220
44,942
29,258
74,200
559,378
364,165
923,544
532,504
346,670
879,174
714,968
465,457
1,180,425
712,272
463,701
1,175,973
Provincial Tax Impacts
Direct
Spinoff
Total
117,325
167,560
284,884
135,556
193,597
329,153
39,108
55,853
94,961
45,185
64,532
109,718
562,408.82
803,215.71
1,365,625
535,389.10
764,626.93
1,300,016
718,842
1,026,629
1,745,470
716,130
1,022,756
1,738,887
Annex 2 for details and assumptions
Gardner Pinfold
33
Ferry impacts
The ferry itself will create economic impacts through its expenditures on goods and services.
Expenditures are estimated at about $25 million annually (Table 3.5). It is too early to determine
with any confidence what economic impact might flow from these expenditures because it is not
clear where the expenditures are likely to be made. It is the location of the expenditure that
provides the starting point for the impact estimate. For example, the charter fee would flow out
of Canada to the vessel owner, resulting in no economic impact in Nova Scotia. By contrast, if
all or part of the crew were recruited locally, then the regional impact would increase in
proportion to the dollar value of income earned within the region. The same holds for the other
items of expenditure including fuel, maintenance and provisions. Until more is known about
these factors, any estimate of impact would be highly speculative.
Gardner Pinfold
34
Gardner Pinfold
Annex A
Port of Portland Rules, Regulations and Fees
U.S. Regulatory Agencies
Port of Portland, Maine
City of Portland contact: Robert Leeman, phone: 207-874-8892
Leeman is a first point of contact and can direct enquiries to appropriate agencies/persons on
requirements and regulatory issues on the U.S. side. Key agencies are:
Agency
International Marine Terminal
Maine Port Authority 16 State House Station Augusta, Maine
04333-0016
Portland Harbor Commission 2 Ptld Fish Pier, or
27 Peal St Ptld 04101
US Coast Guard (Marine Safety)
US Customs Service & Border Protection 486 Commercial St,
Ptld 04101
US Customs Port Directors Office 312 Fore St, Ptld 04101
Phone #(area code 207)
541-6900
287-2841
772-8121
780-3251
1-800-410-9549
780-3328
771-3605
City of Portland, Maine Department of Ports and Transportation:
Rules and Regulations for Municipal Marine Terminals (incl. International Marine Terminal) Communications when berthing, mooring at berths (lines, tugs, traffic, discharges, emissions,
trash, bunkering and fueling, lighting etc.), security and safety, handling of special cargo,
handling special situations and dispute resolution
Harbor Master, Port of Portland Rules and Regulations
(http://www.portlandharbor.org/Rules_Master.htm)
This sets out procedures and penalties for non-compliance with the Harbour Master's directions,
and details requirements for such things as maximum speed and wake for specific sections of the
harbour, licence, training and certification requirements for vessel pilots and operators.
Fees (posted rates – all are subject to negotiation and contract)
Dockage charge per 24-hour period or part thereof: $2.10 per foot of vessel length (e.g., 170
m, therefore $1,171 U.S.)
Wharfage charges per trip:
• Passenger charges for international ferries: $2.50 per trip (1,000 passengers = $2,500)
• Automobile: $5.00
• Vehicle with camper: $10.00
• RV/Motor Home: $20.00
• Motor Coach: $200.00 per day rather than per vehicle ($100 each way)
• Tractor Trailer: subject to negotiation
• Fresh water: $3.50/t
Gardner Pinfold
35
36
Office space - Negotiated in contract
Warehouse space - Negotiated in contract
Security (MARSEC Level 1 -Yellow - Regular Operations - 72 hrs notice required) for ships
over 500 passengers for 12 hours maximum- $2,000 U.S.
Note: if Security level is raised then additional guards are added at $25 per guard per hour or
$60 per police officer per hour
Pilotage is generally required for Portland but may be waived after pilots are used for a
certain number of trips. The fees and requirements would be worked out with the port and
pilot companies.
International Maritime Organization (http://www.imo.org/Pages/home.aspx):
International Convention for the Safety of Life at Sea (SOLAS) - Vessel construction, fire
protection, detection, and extinction, life saving appliances and arrangements, radio
communications, safety of navigation, carriage of cargoes and dangerous goods, and other
measures to enhance safety and security. Some requirements depend on the length of voyage that
is classified into A,B, or C categories.
International Convention for the Prevention of Pollution from Ships (MARPOL) - Prevention of
pollution by oil, noxious liquids, harmful substances carried in bulk, sewage, garbage or air
pollution from ships.
International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers
(STCW) - General provisions, and provisions specific to: master and deck departments, engine
departments, radio communication and radio personnel, emergency, occupational safety, medical
care and survival functions, other specialty training for certain vessels, and watchkeeping.
International Convention on Load Lines (ICLL) determines the limits on draught to which a ship
may be loaded, in order to maintain sufficient freeboard for stability and minimize stress to the
hull for integrity. Specific limits and requirements for inspections will depend on the ship,
anticipated loads, and operational conditions (seasonal or full year, and expected weather).
International Safety Management (ISM) Code sets standards for safe management and operation
of ships and pollution prevention.
U.S. Department of Homeland Security - U.S. Coast Guard
(http://homeport.uscg.mil/mycg/portal/ep/home.do)
Kevin Ferrie - Coast Guard Inspection and Compliance (207) 741-5425
Port State Control (PSC) Policy sets out requirements for general, environmental, safety, and
security measures. (see details at http://homeport.uscg.mil/mycg/portal/ep/browse.do?channelId=18371)
International Port Security Program (IPS Code) - Vessels must establish, document, and adhere to
protocols for controlling movement of individuals and goods on and off vessels. Updates on
procedures and any breaches must be communicated to the USCG and all directions given by
USCG must be followed. International vessels must meet conditions of entry to U.S. ports and
waterways, and present documentation as required regarding vessels, voyage information, cargo,
passengers and crew. Vessels are subject to searches, detainment, and other restrictions initiated
by the USCG
Gardner Pinfold
37
Federal Navigation Regulations - Code of federal Regulations (CFR) Title 33 applies to ferry
operators, in particular CFR sections 160 and 164 pertaining to ports and waterways safety (see
details at http://www.navcen.uscg.gov/?pageName=regContent). Section 160 sets out regulations
for: safe vessel and facility operations, notification of arrival (NOA) – likely 24-hour electronic
notice for scheduled ferry (commercial vehicles have a separate cargo reporting system, C-TAP),
navigation in dangerous conditions, handling of certain dangerous cargoes, and crew-member
identification. Section 164 describes among other things the regulations for: navigation equipment,
communication equipment, safety and emergency equipment, marine casualty reporting, vessel
and equipment maintenance and failure reporting, tests, inspections, and voyage planning.
USCG will require the ferry to have a Certificate of Compliance, which is over and above the
vessel meeting international conventions. The operator will need to submit a full set of plans
showing the ferry as is (not as built). These plans are subject to review by USCG, followed by a
comprehensive structural and safety inspection.
A regular scheduled crossing will be granted some exceptions with the specifics depending on the
vessel, planned operations, and a number of other factors. U.S. Coast Guard may charge nominal
fees ($2,000-$5,000 every 2-5 years) for inspections but not services (e.g. emergency services for
accidents, oil spills, and other events) except in cases of false emergency calls.
Vessel emergency and oil spill response plans will soon have to be prepared and approved for
vessels other than oil tankers. See 33 CFR 155.
U.S. Customs and Border Protection (http://www.cbp.gov/)
Chip Ross, Supervisor of Operations, Portland, Maine (207) 771-3631
As long as the main purpose of the ferry is the carriage of passengers and related vehicles, any
commercial traffic will be treated as if it is at a land border, and the Harbor Maintenance Fee
(HMF) would not apply. However, if a primary purpose of the ferry is commercial traffic, then
the ferry would probably be treated as freight vessel with different reporting criteria, and the
HMF would apply.
All travellers must present a passport, passport card, enhanced driver's licence, or enhanced ID card.
Children under 16 may enter with proof of citizenship (birth certificate or equivalent), no photo ID
required. If you are not Canadian or U.S. citizen you are required to have a passport and possibly a
visa. Travellers under the age of 19 in groups (school, religious, sports etc) must present on
organization letterhead: the name of the group, supervising adult, list of group members and at least
one parent or legal guardian (name, date of birth, address of permanent residence, phone number
etc), and a written and signed statement from the supervising adult certifying that he or she has
obtained parental or legal guardian consent for each participating member of the group.
The top recommendation is for any non-U.S. and non-Cdn ferry operator to become a "signatory
carrier" (possible 8 month process) in order to participate in the visa waiver program (VWP) for
commercial carriers. Among other things the carrier must agree to remove/return people from U.S.
if they do not clear customs. The Cat (Bay Ferries Ltd) was a signatory carrier when they
operated there. (see details at
http://www.cbp.gov/xp/cgov/travel/inspections_carriers_facilities/vwp/)
An overview of all other ferry requirements can be found at
http://www.cbp.gov/xp/cgov/trade/cargo_security/carriers/sea/ and for most things it involves
working out the details with the local CBP office.
Gardner Pinfold
38
Crew ID requirements depend on nationality - no requirements for U.S. crew, passport or
equivalent for Cdn crew (as for CAT all Cdn crew), other nationalities require an international
CI/D crew visa.
Vehicle passengers are processed through customs as they would be by land using the five lanes
available in Portland. Walk-ons go through a pedestrian primary area that is similar to airport
security. They have eight lanes but usually only four staff to process walk-ons. Truckers are to
provide same ID, but main problem is examining truck cargo (more below). Open trucks would
not be a problem but containers, fish and seafood products are more complicated. US CBP
operations involve staff scheduling to ensure enough coverage, so working around cruise ship
itineraries would help in that regard. As long as ferry arrivals avoid late morning to late afternoon
and are on a regular schedule it should not be a problem.
Commercial carriers would provide the usual (electronic) manifest and/or work through a
broker/agent to provide all required documentation. The Portland ferry would be treated as a land
border although there are some different documentation requirements since each type of customs
operation (land vs. sea) have their own computer tracking systems and procedures. Land
procedures follow the Automated Commercial Environment (ACE) program. Seaports use the
Sea Automated Manifest System (AMS). A memorandum with contact information for more
details is available at http://www.cbp.gov/xp/cgov/trade/cargo_security/carriers/sea/
The number one issue is that there is limited space currently available to process tractor-trailers or
even multiple busses at the port. Trucks that are not headed to Boston or elsewhere "in bond"
must clear customs in Portland and a facility/space would have to be created for this (away from
the port). There was no such problem with The Cat because it did not allow commercial vehicles.
Using an off-site area raises questions/concerns especially with night arrivals and trucks moving
through town that have not been inspected, and there could be delays until next business day (or
longer) if a problem is found with cargo (in part due to lack of equipment/staff at other end of
town for dealing with major cargo issues).
Federal Maritime Commission
The ferry operator will need a Certificate of Financial Compliance and carry a Vessel Surety
Bond. Costs are vessel-specific, usually based on the number of passengers and the ticket prices,
to ensure passenger re-imbursement in the event of operator bankruptcy.
US Public Health All galley and food service equipment will need to meet USPH standards.
These are far more stringent than IMO requirements. Costs to meet these standards could be
considerable depending on the age, state and configuration of the vessel.
Gardner Pinfold
Annex B
Traffic and Expenditure Data Tables and Forecast
Traffic Data Tables
Table B.1
Forecast total passengers, Yarmouth-Portland ferry
Motor
Year
Walk On
Coach
Overnight Auto
1
50,000
2,400
65,500
2
46,000
3,400
58,700
3
45,000
4,500
59,500
4
45,540
4,554
60,110
5
46,000
4,600
60,720
6
46,460
4,650
61,440
7
46,920
4,700
62,150
8
47,400
4,750
62,860
9
47,800
4,800
63,470
10
48,000
4,850
64,180
Other
Traffic
2,100
1,900
1,930
1,950
1,970
1,990
2,010
2,030
2,050
2,070
Total
120,000
110,000
110,930
112,154
113,289
114,540
115,780
117,040
118,120
119,100
Notes:
1.
2.
3.
4.
5.
6.
7.
Forecast based on historical traffic levels and assumptions regarding economic performance.
Forecast assumes an 8% decline in year 2, with a 1% growth rate from years 2 to 10.
Passenger defined as one person making a return trip on the ferry.
Walk-on defined as a passenger traveling by ferry without a vehicle.
Motor coach defined as a bus carrying multiple passengers.
Overnight auto defined as one vehicle staying one or more nights in NS.
Other traffic defined as a vehicle staying one or more nights in NS and may include motorcycles, RVs, bicycles, etc.
Table B.2
Forecast total visitors to NS from Yarmouth-Portland ferry traffic
Motor
Other
Year
Walk On
Coach
Overnight Auto
Traffic
1
25,000
1,200
32,750
1,050
2
23,000
1,700
29,350
950
3
22,500
2,250
29,750
965
4
22,770
2,277
30,055
975
5
23,000
2,300
30,360
985
6
23,230
2,325
30,720
995
7
23,460
2,350
31,075
1,005
8
23,700
2,375
31,430
1,015
9
23,900
2,400
31,735
1,025
10
24,000
2,425
32,090
1,035
Total
60,000
55,000
55,465
56,077
56,645
57,270
57,890
58,520
59,060
59,550
Notes:
1. Forecast based on data in Table B.1.
2. Forecast assumes an 8% decline in year 2, with a 1% growth rate from years 2 to 10.
3. Visitor defined as one person making one one-way trip.
Gardner Pinfold
39
40
Table B.3
Percentage of Yarmouth-Portland ferry passengers by origin and mode of transportation
Walk On
Motor Coach
Overnight
Other
Residence
Canada
7%
11%
25%
52%
US
93%
89%
75%
48%
Source: Yarmouth Area Industrial Commission.
Expenditure Data Tables
Table B.4
Forecast average number of nights stayed in NS for Yarmouth-Portland ferry passengers by
mode of transportation
Canada
Transportation Mode
US
Auto
3.9
6.84
Motor Coach
1.92
4
All Modes
2.18
6.84
Source: 2011 Canadian Travel Survey, Canadian Tourism Commission (CTC)), 2011 Nova Scotia Visitor
Exit Survey, NS Department of Economic and Rural Development and Tourism (NSDERD&T).
Table B.5
Average daily expenditures by US visitors to NS ($)
Expenditure
Accommodations
Restaurants
Vehicle Operation and Repair
Local Transportation
Groceries
Culture, Recreation and Entertainment
Retail
Other Spending
Walk-on
0
9.83
0
0.08
3.14
2.59
12.26
5.42
Motor Coach
49.07
42.52
0
1.09
1.09
11.99
23.99
0
Overnight
Auto
26.20
19.41
7.68
0.56
3.94
2.79
6.80
0.52
Other
29.98
21.38
5.71
6.81
3.83
3.55
7.73
0.64
Source: 2011 Canadian Travel Survey (Canadian Tourism Commission), 2011 Nova Scotia Visitor Exit
Survey (NS Department of Economic and Rural Development and Tourism).
Notes:
1. Walk-on expenditure based on Same-Day Auto from 2011 Canadian Travel Survey (CTC).
Gardner Pinfold
41
Table B.6
Average daily expenditures by Canadian visitors to NS ($)
Expenditure
Accommodations
Restaurants
Groceries
Retail
Other Spending
Walk-on
0
9.83
0
0.08
3.14
2.59
12.26
5.42
Motor Coach
49.26
42.70
0
0
1.09
26.27
9.85
0
Overnight
Auto
16.05
23.32
20.46
0.34
14.57
6.23
13.28
2.84
Other
45.14
39.12
1.00
0
1.00
24.07
9.03
0
Source: 2011 Canadian Travel Survey (CTC), 2011 Nova Scotia Visitor Exit Survey (NSDERD&T).
Notes:
1. Walk-on expenditure based on Same-Day Auto from 2011 Canadian Travel Survey (CTC).
Traffic and Expenditure Forecast
Table B.7
Forecast US visitors to NS from Yarmouth-Portland ferry traffic
Year
1
2
3
4
5
6
7
8
9
10
Walk On
23,352
21,484
21,017
21,269
21,484
21,699
21,914
22,138
22,325
22,418
Motor Coach
1,064
1,507
1,994
2,018
2,038
2,061
2,083
2,105
2,127
2,150
Overnight Auto
24,563
22,013
22,313
22,541
22,770
23,040
23,306
23,573
23,801
24,068
Other
Traffic
504
456
463
468
473
478
482
487
492
497
Total
49,483
45,460
45,787
46,297
46,765
47,278
47,786
48,303
48,746
49,132
Notes:
1. Visitor forecast based on forecast total visitors (Table B.2) and proportion of passengers by country of
residence (Table B.3).
Gardner Pinfold
42
Table B.8
Estimated expenditures per US visitor to NS per Yarmouth-Portland ferry round trip ($)
Expenditure
Accommodations
Restaurants
Groceries
Retail
Other Spending
Walk
On
0
9.83
0
0.08
3.14
2.59
12.26
5.42
Motor
Coach
196.26
170.09
0
4.36
4.36
47.98
95.95
0
Overnight
Auto
179.18
132.80
52.54
3.84
26.92
19.11
46.51
3.58
Other
Traffic
205.04
146.27
39.07
46.56
26.17
24.29
52.86
4.38
Total
580.48
458.99
91.62
54.84
60.58
93.96
207.58
13.38
Notes:
1. Estimated expenditure based on average daily expenditure in NS by US visitors (Table B.5) and average
number of nights stayed in NS by mode of transportation (Table B.4).
Table B.9
Forecast Canadian visitors to NS from Yarmouth-Portland ferry traffic
Motor
Overnight
Other
Year
Walk On
Coach
Auto
Traffic
1
1,648
136
8,188
546
2
1,516
193
7,338
494
3
1,483
256
7,438
502
4
1,501
259
7,514
507
5
1,516
261
7,590
512
6
1,531
264
7,680
517
7
1,546
267
7,769
523
8
1,562
270
7,858
528
9
1,575
273
7,934
533
10
1,582
275
8,023
538
Total
10,517
9,540
9,678
9,780
9,879
9,992
10,104
10,217
10,315
10,418
Notes:
1. Visitor forecast based on forecast total visitors (Table B.2) and proportion of passengers by country of
residence (Table B.3).
Gardner Pinfold
43
Table B.10
Estimated expenditures per Canadian visitor to NS per
Yarmouth-Portland ferry round trip ($)
Expenditure
Accommodations
Restaurants
Groceries
Retail
Other Spending
Walk
On
0
9.83
0
0.08
3.14
2.59
12.26
5.42
Motor
Coach
94.59
81.98
0
0
2.10
50.45
18.92
0
Overnight
Auto
62.58
90.95
79.81
1.34
56.84
24.30
51.81
11.06
Other
Traffic
98.40
85.28
2.19
0
2.19
52.48
19.68
0
Total
255.56
268.03
82.00
1.42
64.26
129.81
102.66
16.48
Notes:
1. Estimated expenditure based on average daily expenditure in NS by Canadian visitors (Table B.6) and
average number of nights stayed in NS by mode of transportation (Table B.4).
Table B.11
Estimated total Yarmouth-Portland ferry visitor expenditures in NS – Year 1 ($)
Expenditure
Accommodations
Restaurants
Groceries
Retail
Other Spending
Total
Walk
On
0
245,793
0
2,105
78,392
64,695
306,515
135,534
833,034
Motor
Coach
221,654
192,100
0
4,639
4,926
57,907
104,639
0
585,865
Overnight
Auto
4,913,438
4,006,439
1,944,058
105,214
1,126,498
668,368
1,566,527
178,557
14,509,099
Other
Traffic
157,062
20,281
20,887
23,466
14,382
40,893
37,388
2,205
316,564
Total
5,292,154
4,564,613
1,964,945
135,424
1,224,198
831,863
2,015,068
316,296
16,344,561
Notes:
1. Total expenditure = estimated US and Canadian visitors to NS (Tables B.7 and B.9) by estimated
expenditure per US and Canadian visitors to NS per trip (Tables B.8 and B.10).
Gardner Pinfold
44
Table B.12
Estimated total Yarmouth-Portland ferry visitor expenditures in Yarmouth
and Acadian Shores Tourism Region - Year 1 ($)
Walk
Motor Overnight Other
Expenditure
On
Coach
Auto
Traffic
Accommodations
0
44,179
581,104
29,814
Restaurants
84,345
38,289
500,853
24,102
0
0
267,176
2,570
1,579
870
12,444
2,573
Groceries
58,794
982
161,987
1,857
48,521
12,255
89,728
11,200
Retail
229,886 20,144
206,829
6,618
Other Spending
101,651
0
27,064
242
Total
524,776 116,719 1,847,185 78,976
Total
655,097
747,588
269,746
17,465
223,620
161,704
463,477
128,956
2,667,653
Notes:
expenditure per US and Canadian visitors to NS (Tables B.8 and B.10) for one night.
2. Ferry passenger expenditure in this region assumed to be 75% of total expenditure in the Yarmouth and
Acadian Shores and South Shore tourism regions combined.
3. Ferry passengers assumed to stay one night in the region.
Table B.13
Estimated total Yarmouth-Portland ferry visitor expenditures in
South Shore Tourism Region - Year 1 ($)
Walk
Motor Overnight
Expenditure
On
Coach
Auto
Accommodations
0.00
14,726
193,701
Restaurants
61,448 12,763
166,951
0
0
89,059
526
290
4,148
Groceries
19,598
327
53,996
16,174
4,085
29,909
Retail
76,629
6,715
68,943
Other Spending
33,884
0
9,021
Total
208,259 38,906
615,728
Other
Traffic
9,938
8,034
857
858
619
3,733
2,206
81
26,326
Total
218,366
249,196
89,915
5,822
74,540
53,901
154,492
42,985
889,217
Notes:
expenditure per US and Canadian visitors to NS (Tables B.8 and B.10) for one night.
2. Ferry passenger expenditure in this region assumed to be 25% of total expenditure in the Yarmouth and
Acadian Shores and South Shore tourism regions combined.
3. Ferry passengers assumed to stay one night in the region.
Gardner Pinfold
45
Table B.14
Forecast total Yarmouth-Portland ferry visitor expenditures in NS - Years 1 to 10 ($)
Vehicle
Operation
and Repair
1,964,945
1,807,749
1,825,826
1,844,085
1,862,526
1,881,151
1,899,962
1,918,962
1,938,152
1,957,533
18,900,890
Local
Culture, Rec, and
Year
Accommodations
Restaurants
Transportation
Groceries
Entertainment
1
5,292,154
4,564,613
135,424
1,224,198
831,863
2
4,868,782
4,199,444
124,590
1,126,262
765,314
3
4,917,470
4,241,438
125,836
1,137,525
772,967
4
4,966,644
4,283,853
127,095
1,148,900
780,697
5
5,016,311
4,326,691
128,366
1,160,389
788,504
6
5,066,474
4,369,958
129,649
1,171,993
796,389
7
5,117,139
4,413,658
130,946
1,183,713
804,353
8
5,168,310
4,457,794
132,255
1,195,550
812,396
9
5,219,993
4,502,372
133,578
1,207,506
820,520
10
5,272,193
4,547,396
134,914
1,219,581
828,726
Total
50,905,470
43,907,217
1,302,653
11,775,618
8,001,731
Notes:
1. Forecast total expenditures based on total ferry passenger expenditures in NS, year 1 (Table B.11).
2. Passenger traffic is assumed to decline 8% in year 2 and increase by 1% per year thereafter.
Gardner Pinfold
Retail
2,015,068
1,853,863
1,872,402
1,891,126
1,910,037
1,929,137
1,948,429
1,967,913
1,987,592
2,007,468
19,383,034
Other
316,296
290,993
293,902
296,842
299,810
302,808
305,836
308,894
311,983
315,103
3,042,468
Total
16,344,562
15,036,997
15,187,367
15,339,241
15,492,633
15,647,560
15,804,035
15,962,076
16,121,696
16,282,913
157,219,082
46
Table B.15
Forecast total ferry visitor expenditures in the Yarmouth and Acadian Shores Tourism Region - Years 1 to 10 ($)
Year
1
2
3
4
5
6
7
8
9
10
Total
Accommodations
655,097
602,689
620,099
638,012
656,442
675,405
694,915
714,989
735,643
756,894
6,750,188
Restaurants
747,588
687,781
707,649
728,091
749,124
770,764
793,029
815,937
839,507
863,758
7,703,227
Vehicle
Operation
and Repair
269,746
248,167
255,335
262,711
270,300
278,108
286,142
294,408
302,912
311,663
2,779,493
Local
Transportation
17,465
16,068
16,532
17,010
17,501
18,007
18,527
19,062
19,613
20,179
179,964
Groceries
223,620
205,731
211,673
217,788
224,079
230,552
237,212
244,065
251,115
258,369
2,304,205
Culture, Rec,
and
Entertainment
161,704
148,767
153,065
157,486
162,036
166,717
171,532
176,488
181,586
186,831
1,666,212
Retail
463,477
426,398
438,716
451,389
464,428
477,844
491,648
505,850
520,462
535,497
4,775,709
Other
128,956
118,639
122,067
125,593
129,221
132,953
136,794
140,746
144,811
148,995
1,328,774
Total
655,097
602,689
620,099
638,012
656,442
675,405
694,915
714,989
735,643
756,894
27,487,773
1. Forecast total expenditures based on total ferry passenger expenditures in the Yarmouth and Acadian Shores tourism region, year 1 (Table
B.12).
2. Passenger traffic is assumed to decline 8% in year 2 and increase by 1% per year thereafter.
3. Visitor spending in the region is assumed to increase by approximately 15% from years 1 to 10.
Gardner Pinfold
47
Table B.16
Forecast total Yarmouth-Portland ferry visitor expenditures in the South Shore Tourism Region - Years 1 to 10 ($)
Vehicle
Operation
and Repair
89,915
82,722
85,112
87,570
90,100
92,703
95,381
98,136
100,971
103,888
926,498
Local
Culture, Rec, and
Year
Accommodations
Restaurants
Transportation
Groceries
Entertainment
Retail
1
218,366
249,196
5,822
74,540
53,901
154,492
2
200,896
229,260
5,356
68,577
49,589
142,133
3
206,700
235,883
5,511
70,558
51,022
146,239
4
212,671
242,697
5,670
72,596
52,495
150,463
5
218,814
249,708
5,834
74,693
54,012
154,809
6
225,135
256,921
6,002
76,851
55,572
159,281
7
231,638
264,343
6,176
79,071
57,177
163,883
8
238,330
271,979
6,354
81,355
58,829
168,617
9
245,214
279,836
6,538
83,705
60,529
173,487
10
252,298
287,919
6,726
86,123
62,277
178,499
Total
2,250,063
2,567,742
59,988
768,068
555,404
1,591,903
Notes:
4. 1. Forecast total expenditures based on total ferry passenger expenditures in the South Shore tourism region, year 1 (Table B.13).
5. 2. Passenger traffic is assumed to decline 8% in year 2 and increase by 1% per year thereafter.
6. Visitor spending in the region is assumed to increase by approximately 15% from years 1 to 10.
Gardner Pinfold
Other
42,985
39,546
40,689
41,864
43,074
44,318
45,598
46,915
48,270
49,665
442,925
Total
889,218
818,080
841,712
866,027
891,044
916,783
943,267
970,515
998,550
1,027,395
9,162,591
48
Gardner Pinfold
Annex C
Yarmouth – Maine Ferry
Tourism Analysis and Traffic Projection
1.
Market Assessment – Factors affecting tourism traffic
Tourism is a $1.8 billion dollar industry in Nova Scotia and accounts for roughly 32,000 jobs,
making it a key contributor to the province’s economy. Tourism also directly benefits many Nova
Scotians and their families by stimulating community development and supporting the growth of
supporting businesses. All indicators point toward a rebound in global travel in 2011 with modest
growth predicted for Nova Scotia.
In order to analyze the potential tourism travel for Yarmouth and the surrounding area as a result
of the reintroduction of ferry service from Yarmouth, it is important to understand the trends in
tourism travel, changes in consumer preferences, and the major drivers affecting the Nova Scotia
tourism market.
Our analysis of tourism traffic includes a review of the following:









2.
global tourism trends
travel by visitors from the United States to Canada
travel trends of visitors from the United States to Nova Scotia
key drivers affecting tourism trends to Nova Scotia
road traffic patterns of visitors to Nova Scotia by origin
travel patterns of visitors to Nova Scotia
emergence of travel profiles of visitors to Nova Scotia
market analysis of market potential demand for Yarmouth ferry service
projected tourism traffic patterns for Yarmouth ferry service
Global Tourism Trends
The tourism market is increasingly fragmented
Nova Scotia competes in a large and highly competitive global tourism business. According to
the World Tourism Organization (UNWTO), the top 15 destinations in 1950 accounted for 88%
of international arrivals. However, these top 15 destinations represented only 75% in 1970 and
57% in 2005. This reflects the emergence of new tourism destinations, many of them developing
countries, such as Singapore, Vietnam and Papua New Guinea. Tourism is not only an important
economic sector in Nova Scotia, it is a now recognized as a worldwide economic growth engine
worth over a trillion dollars ($US) globally in 2010, and representing 5% of global GDP, 6% of
jobs and 6-7% of jobs internationally.
Nova Scotia not only competes in a highly competitive global tourism business, it also competes
with the rest of Canada in attracting US and other international visitors annually. The tourism
sector in Canada generates over $70 billion in revenue, $28 billion in GDP, of which $14 billion
is exports. The tourism sector also supports over 618,000 jobs and 178,000 businesses across
Canada.
Gardner Pinfold
49
50
Upward trend in International Tourism
According to the World Tourism
Organization (WTO), the economic woes
associated with the global recession in
2008 was not enough to stop upward
trend in worldwide international tourism
resulting in the fifth consecutive increase
in worldwide international tourist
arrivals. International tourism continued
its upward trend in 2008, (increased by
2.0% over 2007), with a record of 922
million tourist arrivals. This increase
came in the first half of 2008 and was
large enough to absorb the decline in
tourism demand in the second-half of 2008 brought on by the worldwide economic downturn. As
a result, the WTO has suggested that the tourism sector has been more resistant to the economic
downturn than other sectors.
However, The Tourism Landscape Continues to Shift
Since 2000, tourist arrivals in the Middle East have increased an average of 10.5% annually,
making it the leading emerging market. France remains the top destination, (roughly 79.3 million
international tourist arrivals in 2008), ahead of the United States (58.0 million) and Spain
(57.3 million). However, the United States generates the largest tourism receipts,
(US$110.1 billion in 2008). The United States relies more on higher-spending, long-haul
travellers, while France, Spain and other European countries attract more short-term visitors. This
helps to explain why the United States ranks third globally in tourist arrivals, but first in
international tourism receipts.
Global travel is rebounding but not as quickly for Canada
The recovery is disproportionately
weighted to emerging destinations in the
Middle East, Asia and the Pacific.
Therefore the global growth experienced
internationally is not contributing to an
increase in visitors to Canada. Canada
ranks 14th in international tourist arrivals
and 15th in terms of international tourism
receipts.
In the middle of the global recession in
2009, Canada witnessed a drop in global
travel of approximately 4.2%. However,
the picture was brighter in 2010. In the
first 9 months of 2010, international arrivals to Canada increased by 2%. However, visitation
from the United States was flat, while visitation from other countries increased by 7%. The
UNWTO predicts international tourist arrivals will increase by 4% in 2011 with a long-term trend
of 4% per year. While international arrivals have increased, international expenditures have not
recovered as quickly.
Gardner Pinfold
51
Decline in overnight travel from the United States to Canada
Since peaking at 16.2 million trips in 2002, overnight travel from the United States has
continuously fallen. Various factors
including the 9/11 terrorist attacks, the
Severe Acute Respiratory Syndrome
(SARS) crisis in 2003, higher gas
prices, an unfavourable exchange rate
and the slowing economy may have all
contributed to this prolonged decline.
The economic downturn in the United
States is likely the largest contributor
to the 2008 decline. Overnight travel
from the United States declined for the
fourth consecutive year in 2008,
dropping 6.5% to 12.5 million trips, the
lowest level since 1993.
However, travellers from overseas countries are visiting Canada more than ever. Since
falling 16.0% in 2003, overnight travel from overseas countries has increased 41.0%. Overnight
travel from overseas countries reached a high of nearly 5 million trips in 2009, representing the
fifth consecutive increase in overseas travel to Canada.
The majority of all overnight trips from the United States are made by auto (car travel accounted
for roughly 59% in 2009), with plane travel representing roughly 30 percent of their overnight
trips. Americans also made 10.1 million same-day trips to Canada, and 90.1% of those were by
car. New York, Michigan and Washington make up over one third of the total United States
overnight market to Canada. These three states also accounted for close to three quarters of all
same-day trips into Canada. Residents of New York State stayed 5.9 million nights in Canada in
2009 and, in the process, spent $654 million, both more than any other state.
Same-day car travel from the United States
Same-day car travel from south of the border reached a high of 27.3 million trips in 1999 and has
since been in a decade-long decline. Many factors have contributed to this decline, including
enhanced border security subsequent to the events of September 11, 2001, the increase in the
price of gasoline, the rising value of the Canadian dollar as well as the more recent economic
downturn.
Outbound market: Canadian travel overseas continues to rise
Meanwhile, during the same period, the
number of Canadians travelling
internationally has continued to increase, and
in particular, overnight travel to the United
States.
Canadian travel in overseas countries
continued its upward trend in 2008, with
Canadians taking a record 8.1 million
overnight trips, up 9.7% from the previous
Gardner Pinfold
52
high set in 2007. Travel overseas has historically shown steady increases. In fact, it has fallen
only twice in the last 20 years: in 1991, as a result of the cross-border shopping phenomenon in
the United States, and in 2002 following the events of September 11, 2001. Travel overseas even
posted an 8.4% increase in 2003, despite the global SARS crisis. Moreover, the rates at which
these steady increases have occurred are fairly significant. Since 2002, overnight travel overseas
has increased an average of 9.6% annually and since 1991, the number of overnight trips has
nearly tripled.
Canadians made 18.9 million overnight trips to the United States in 2008, up 6.5% from 2007 and
the most since 1991. This was the fifth consecutive increase in overnight travel south of the
border, and in that span, overnight travel has jumped 49.3%. Nights spent on trips in the United
States increased 12.1% to 147 million. On average, Canadians stayed 7.8 nights on overnight
trips, up from 7.4 nights the previous year. As a result, overnight spending south of the border
climbed 11.9% to a high of $12.9 billion. Average spending on overnight trips increased
from $650 to $683, while average spending per night remained unchanged at $88.
Overnight travel by Canadians to the United States highest since 1991
Seven out of 10 overnight trips by Canadians abroad were to the United States in 2008. Most
overnight trips to the United States – about 66.5% – were for less than one week. About 79.8% of
overnight trips by Canadians outside the country were for pleasure purposes, slightly higher than
the previous year. Business travel accounted for 11.7% of outbound trips by Canadians in 2008.
Most provinces recorded increases in overnight travel abroad by its residents, except
Saskatchewan and Nova Scotia, which declined 2.3% and 0.6% respectively. Overnight business
travel by Canadians abroad decreased 3.2% in 2008, while pleasure travel increased 9.3%. The
drop in business travel can be attributed to a 5.9% decline in business trips to the United States.
Same-day car trips by Canadians in the United States remains relatively unchanged
Canadians made 24.0 million same-day car trips to the United States in 2008, down 0.7%
from 2007. Same-day car travel south of the border had shown increases the previous five years,
increasing 15.3% in that span. The recent upswing pales in comparison to the one that began
in 1986, in which same-day car travel from Canada to the United States more than doubled during
a five-year span, peaking at 59.1 million trips in 1991.
3.
Analysis of Tourism Traffic to Nova Scotia
What do we know about visitors to Nova Scotia?
A careful examination of where visitors to Nova Scotia originate is required to understand market
trends in visitor travel to Nova Scotia, (including mode of travel, tastes and preferences, and
identified visitor profiles). Only in this way can reasonable tourism traffic projections be
developed for a proposed new ferry service out of Yarmouth. Visitor information provided in this
section is based on the recent data analysis of the 2010 Nova Scotia Visitor Exit Survey (VES).
The 2010 VES represents the first full year (including non-peak tourism period) of data based on
visitors to the province in 2010. A total of 6,400 surveys were completed representing 1.7 million
visitors.
Based on the 2010 VES data, over half of Nova Scotia visitors (55%) in 2010 originate from
within Atlantic Canada, with the next largest portion (21%) coming from Ontario. As of the end
of October 2010, Nova Scotia was performing reasonably well, experiencing 1% growth in
visitation over 2009. The ‘staycation’ phenomenon contributed to 3% growth in regional
Gardner Pinfold
53
visitation, while the Ontario visitors market grew by 1%. Visitors from Western Canada were
down 7% during the year. Internationally, visits from Germany were up 5%, while United
Kingdom visits fell 8% and total overseas visitors decreased 8%. Visits from the United States were
down slightly (2%) in 2010 as compared to 2009.
Source: 2010 Nova Scotia Visitor Exit Survey (VES) data
Interestingly, road traffic accounted
for the highest growth in tourism
visitation to Nova Scotia in 2010, up
3% over 2009 levels. Air travel
declined in 2010, with the exception
of business travel.
Examining the export component of
tourism visitation (excluding Nova
Scotia travelers), we see that visitors
from the US comprised roughly 10
percent of total visitors to Nova
Scotia in 2010.
While visitors from outside Atlantic
Canada account for a small share of
overall visitation, they account for a
disproportionately higher percentage
of revenue, indicating they spend
more on average than visitors from
Atlantic Canada. Visitors from the
US typically stay longer and spend
more per person than the average
length of stay and spending for all
visitors to Nova Scotia.
Tourism Visition to Nova Scotia by Origin, 2010
Other Canada
32%
Atlantic Canada
55%
US
10%
Other international
3%
Atlantic Canada
Other Canada
Other international
Percentage of Tourism Visitor Spending in Nova Scotia by Origin,
(Excluding Tourism expenditures by Nova Scotians), 2010
Other Canada
38%
US
16%
Atlantic Canada
39%
Other international
7%
Atlantic Canada
Gardner Pinfold
US
Other Canada
US
Other international
54
Total US overnight visitors traveling to NS by road fell in 2010
Total US overnight (staying one night or longer) visitors entering NS has followed a generally
declining trend since 2002, falling by 4.9% in 2010 following a slight increase in 2009.
US Overnight Visitors Travelling by Road (Auto, Motorcoach and RV)
Entering NS Through (Amherst, Yarmouth, Digby, and Caribou)
(2000-2010)
Number of US Overnight Visitors
250,000
200,000
150,000
100,000
50,000
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Year
Total (Amherst, Yarmouth, Digby and Caribou)
Yarmouth Only
Total US overnight visitors entering NS by road (including Amherst, Yarmouth, Digby and
Caribou entry points) dropped from 217,082 in 2002 to 105,595 in 2010. US overnight visitors
entering NS via the Yarmouth ferry followed a similar pattern, reaching a peak of 90,307 in 2002
then declining to a total of 23,416 in 2009. The decline through Yarmouth, though, was
substantially sharper than the overall decline (74.1 vs. 53.9%), suggesting that the quality of the
experience on the ferry itself (the Cat) may have played a role. This was confirmed in our
discussions with US travel agents.
Nova Scotia has highest number of visitor nights by United States travelers in Atlantic
Canada
Total Visitor Nights by US residents, Atlantic Canada, 2008
1,585
1,600
1,400
Total Visitor Nights (Thousands)
When examining the overnight visits
from the United States in Atlantic
Canada, New Brunswick receives the
greatest number of person visits (341
person visits in 2009), followed by
Nova Scotia (300 person visits).
However, when we examine the
number of nights stayed, Nova Scotia
receives the largest number of total
visitor nights (1,585) by United
States resident among the Atlantic
Provinces (46% greater visitor nights
than New Brunswick).
1,083
1,200
1,000
800
506
382
600
400
200
0
New Brunswick
Nova Scotia
Prince Edward Island
Newfoundland and
Labrador
Gardner Pinfold
55
Combining visiting friends and relatives with pleasure
Examining tourism visitation to
Nova Scotia by purpose of trip based
on an analysis of the 2010 VES data,
we see that the majority of visitors
come to Nova Scotia for pleasure,
visiting friends and relatives (VFR),
or for the combined purpose of VFR
and tourism activities combined.
Combined, roughly 74% visitors for
Nova Scotia fall into the category of
VFR and traveling for pleasure. The
2010 VES data also shows that
roughly two thirds of visitors that fall
into this category (either VFR or
traveling for pleasure) arrive by road.
In addition, a slightly larger proportion
of visitors that are either visiting
friends and relatives or traveling for
pleasure travel as couples, are more
active, have a longer length of stay, and
have higher spending per person than
the overall average of total visitors to
Nova Scotia. When examining their
origin, roughly 47% originate in
Atlantic Canada, with 25% originating
in Ontario, 10% in the US, 9% in
Western Canada, 5% overseas, and 4%
from Quebec.
Tourism Visition to Nova Scotia by Purpose, 2010
Pleasure
35%
Other 5%
VFR & Tour
21%
VFR Only
VFR
Only
VFR & Tour
Pleasure
Business
Other
Tourism Visitors to Nova Scotia Visiting Friends and Relatives
and Pleasure, by Origin, 2010
Atlantic Canada
47%
Ontario
25%
US
10%
Rest of Canada
13%
Overseas
5%
Overseas
Atlantic Canada Visitors
More than half of Nova Scotia’s visitors are from
Atlantic Canada. Most of these visitors arrive by road
and are likely to be traveling as a family with
children. There is also a higher than average
percentage of business travelers from Atlantic
Canada as compared to visitors from other origins,
including both commercial and personal business
purposes. Visitors from Atlantic Canada have a much
shorter average length of stay in Nova Scotia and
engage in proportionately less activity while they are
here, therefore resulting in a smaller average spend per trip.
Gardner Pinfold
Busines
s
US
Rest of Canada
Ontario
Atlantic Canada
56
Ontario Visitors
Two out of ten of visitors to Nova Scotia are from Ontario and
roughly half arrive by road and with the other half arriving by air.
Visitors from Ontario are more likely to be visiting friends and
relatives, have a slightly longer length of stay and have a slightly
higher average spending per person as compared to travellers
from other origins. Over 50% of visitors from Ontario participate in outdoor activities. Looking to
the future, based on demographic projections, visitors from Ontario will be older, more ethnically
diverse, travel less, and engage is less outdoor activity.
Our New England Neighbours
Visitors to Nova Scotia from New England
represented three percent of total visitors to Nova
Scotia in 2010. Almost 9 out of 10 drive to Nova
Scotia and they are predominantly couples and
largely pleasure travelers. Based on the analysis
of the 2010 VES data, visitors from New England
have a longer average length of stay and a greater
average spend per person in comparison with
total visitors to Nova Scotia. On average, fewer
visited Halifax waterfront, however, a larger
proportion visited museums and craft shops, as compared to total visitors to Nova Scotia.
Visitors from the Middle Atlantic States
Based on the 2010 Nova Scotia VES data,
approximately two percent of Nova Scotia’s total
visitors come from three mid-Atlantic states,
(New York, New Jersey, and Pennsylvania). Two
thirds of the visitors from the mid-Atlantic states
drive here, and they are less likely to have been
here before than visitors from other origins.
Visitors from the mid-Atlantic states also
comprise a higher proportion of pleasure travelers, are more likely to be traveling as couples, and
have higher average spending person as compared to visitors from other origins.
The Mid-Atlantic and New England markets have been identified by the province as the primary
US target markets for 2011. The US market is reached through Nova Scotia’s investment in the
Atlantic Canadian Tourism Partnership (ACTP) agreement. The ACTP agreement activities
include advertising and travel trade partnerships.
The mid-Atlantic market has been identified as a priority developmental market with substantial
growth potential based on the market intelligence compiled by the Atlantic Canada Tourism
Partnership (ACTP), including use of the Canadian Tourism Commission’s (CTC’s) Market
Portfolio Analysis. The Mid-Atlantic region is seen as a growth opportunity for Nova Scotia
given the large market potential (more then 3.5 million), proximity to the market and current
momentum in the market.
It is important to note that the VES data do not include US visitors arriving by cruise ship.
Including these visitors increases US representation in the Nova Scotia tourism market.
Gardner Pinfold
4.
57
Key Drivers for Tourism Travel to Nova Scotia: Competitive
factors
The following discussion highlights the key competitive factors influencing both commercial and
visitor traffic. While these factors do not necessarily explain the underlying rationale for
particular forms of traffic (the factors driving traffic), they are important in determining overall
traffic levels.
Exchange rates
Exchange rates play an important role in influencing traffic levels for tourism, not only for road
travel from the U.S., but also air travel where fuel surcharges are in effect (e.g., U.S. and EU).
The rising value of the Canadian dollar against the U.S. dollar since 2002 has caused the U.S.
dollar cost of travel to Canada to increase by about 40%, contributing to a steady decline in
traffic.
Canada-US Exchange Rate (US Dollars per Canadian
Dollar)
2003-2011
$US per $Cdn
1.1
1
0.9
0.8
0.7
Ja
n
M '03
ay
Se '03
pt
'0
Ja 3
n
M '04
ay
Se '04
pt
'0
Ja 4
n
'
M 05
ay
Se '05
pt
'0
Ja 5
n
'
M 06
ay
Se '06
pt
'0
Ja 6
n
M '07
ay
Se '07
pt
'0
Ja 7
n
M '08
ay
Se '08
pt
'0
Ja 8
n
M '09
ay
Se '09
pt
'0
Ja 9
n
M '10
ay
Se '10
pt
'1
Ja 0
n
M '11
ay
'11
0.6
January 2003 - May 2011
Source: http://www.x-rates.com/d/CAD/USD/graph120
Consumer Confidence: An Important Indicator of Economic Recovery
Consumer confidence is an important barometer of the health of an economy from the perspective
of the consumer a critical indicator when forecasting consumer spending for goods and services,
including tourism. Consumer
confidence in Canada showed a
strong rebound following the
recession in 2008-2009, indicating
that Canadians are feeling brighter
about the economy’s future
prospects.
However, consumer confidence in
Canada has not returned to the prerecession level of 2007 and hesitancy
still remains when it comes to major
purchases. Increased spending on
Gardner Pinfold
58
these major purchases may lead to a sustained economic turn-around will increase consumer
spending similar to the levels in 2007.
Source: TNS Trends, Spring 2011
US Consumer Confidence Lagging
However, the same is not true in the
US economy. Consumer confidence
in the US economy suffered a much
deeper drop during the 2008-2009
recession and subsequently, has been
a lagging indicator showing a much
slower rebound following the
recession. However, very recent data
indicates that the consumer
confidence in the United States
improved to 65.4 in April of 2011
from 63.8 in the previous month
(March 2011) indicating that the US
economy may be turning the corner
on consumer confidence.
Source: TNS Trends, 2011
Gasoline Prices Impact Travel Patterns
Combined with a stronger Canadian dollar, high fuel prices negatively impact travel patterns, and
more broadly, road traffic in general. Given that fuel prices are a significant component of total
costs for all modes of road transportation, discretionary travel in particular is affected by changes
in fuel costs. As gasoline prices rise, it is not surprising that recreational travel is negatively
affected given the significance of fuel costs in road travel. However it is difficult to determine the
price of fuel that triggers changes in tourism-related road traffic or the extent to which road traffic
is reduced because of higher gas prices (elasticity of demand). With the majority of visitors to
Nova Scotia arriving via road traffic, it is reasonable to expect that the sharp rise in gasoline
prices experienced in early 2011 will have a dampening effect on tourism traffic to the province
for the 2011 tourism season.
Average retail gasoline prices increased in the early part of 2009 in Nova Scotia, and remained
steady, with the retail price of regular unleaded gas hovering around $1.00 per litre in Nova
Scotia over the period from May to September (average price of $1.01 in Halifax). Gasoline
prices in 2010 also remained stable but were slightly higher over this period (average retail price
of $1.03 per litre for regular unleaded gasoline in Halifax). However, the average retail price of
regular unleaded gas has risen sharply in early 2011 heading into the peak tourism season
(average monthly price in the month of May being $1.33 per litre for regular unleaded gasoline in
Halifax). Higher gasoline prices are likely to result in shorter distances traveled for summer
vacations. Given that road travel remains the most popular mode of leisure travel, the impact of
higher gasoline prices are an important consideration in projecting tourism demand.
Gardner Pinfold
59
Average Retail Gasoline Prices (Regular Unleaded),
Including Taxes, Self Serve,
Halifax, NS, 2009-20011
140
130
Cents/Litre
120
110
100
90
80
2009
2010
2011
70
60
Jan
Feb.
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Month
Source: MJ Ervin & Associates (http://mjervin.com/gasoline_prices.htm)
Changing Tastes – Increasing Cruise Demand
In addition to changes in exchange rates and fuel prices, changing tastes help to explain choice of
mode of travel to Nova Scotia from
5-year Summary of Cruise Ship totoals, Halifax, NS
2006-2010
the U.S. (e.g., cruise ship or air vs.
auto). Cruise traffic to Atlantic
127
125
118
Canada from the northeast U.S. has
92
increased steadily since the early
89
2000s, providing U.S. tourists with
an attractive option for visiting the
region. Nova Scotia had a record
year in the cruise industry in 2010,
with the number of vessels calling at
Halifax rising from 89 in 2006 to 127
in 2010, and the number of
passengers rising from 170,000 to over 260,000.16
140
Number of Cruise Ships per Year
120
100
80
60
40
20
0
2006
16
http://www.cruisehalifax.ca/our-visitors/statistics.html
Gardner Pinfold
2007
2008
2009
2010
60
This is a large and growing industry and one that actively utilizes a directed marketing and
advertising campaign to ensure this
5-year Summary of Cruise Ship Passengers, Halifax, NS
growth continues. Nova Scotia has
2006-2010
been well ranked as a popular
destination among the spring,
summer and fall cruise arrivals.
Efforts to promote 'homeporting" in
Nova Scotia have paid off in recent
years, with more ships picking up
and dropping off passengers and
passengers staying in Nova Scotia
longer as opposed to just passing
through.
300,000
261,216
228,133
Number of Cruise Passengers per Year
250,000
200,000
227,797
176,742
169,824
150,000
100,000
50,000
0
2006
2007
2008
2009
2010
The Nova Scotia cruise industry has
successfully focused on tours of New England and Atlantic Canada, with an increasing number of
passengers arriving in Nova Scotia before their seafaring excursions begins to extend their stay
prior to their departure, supporting hotels and local businesses while they are in Nova Scotia.
Nova Scotia’s cruise marketing initiatives continue to be supported through a partnership with the
Atlantic Canada Cruise Association and the Halifax Cruise Homeport Gateway Partnership.
Cruise Industry is Highly Competitive
Increasingly the cruise ship industry is actively targeting a younger-than-industry-average group
of passengers during the peak tourism season that are keen to explore during their short shore
visits. Additionally, cruiselines are adding features that interest passengers with healthy and
active lifestyles. In addition to some of the usual luxury amenities offered on board, increasingly
cruise ships offer gyms filled with exercise equipment, active shore excursions, with some now
offering bicycles on board for passengers to use while ashore.
The cruise ship industry is also changing its routes and offering shorter cruises that appeal to
younger working couples with children. Many of the recent cruise offerings out of New England
allow passengers to take a 4-day cruise over a long weekend. This product is directly targeting
younger working families with limited vacation time. For example, this year, Carnival Cruise
lines is offering a 4-day cruise out of New York at competitive prices beginning at $399.00 per
person (departing Thursday and returning on Monday). Carnival also offers a 5-day cruise
(Saturday – Thursday) out of New York, NY with stops in Halifax and Saint John for price
beginning at $499.00.
In addition, to the shorter cruises from New York, Carnival is for the first time offering 4-day and
5-day cruises out of Boston, targeted at the New England market, younger working couples with
families, who do not want to travel to New York for their departure. These shorter cruises out of
Boston are offered at even lower prices, with the 4-day cruises beginning at $289 and the 5-Day
cruise beginning at $389 per person.
Gardner Pinfold
5.
61
Analysis of Road Traffic from the US to Nova Scotia
US visitors entering Nova Scotia via Yarmouth
Passenger traffic on the Yarmouth–Maine route over 2002-2009 period fell from a peak of over
320,000 passengers in 2002 to less than 75,000 in 2009, a decline of over 77 percent, as shown in
the figure below. Based on a review of Stats Canada data, there is slightly higher inbound than
outbound traffic through the Yarmouth ferries over this time period.
Total Ferry Passenger Traffic, Yarmouth Ferries,
(1999-2009)
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
1999
2000
2001
2002
2003
2004
Bay Ferries
2005
2006
Scotia Prince
2007
2008
2009
Total
U.S. passenger traffic on the
US Visitors Entering Nova Scotia at Yarmouth by Mode
Yarmouth–Maine route over this
1996 to 2009
period was predominantly auto
traffic, followed by walk on traffic,
motor Coach and other modes. U.S.
auto traffic reached a peak at over
82,000 vehicles in 2002 and 81,000
in 1999, and fell to just over 20,000
vehicles in 2009. Auto traffic is
largely comprised of overnight (2
days or more) auto traffic. Walk on
passengers reached a peak in 2001 at 59,000 and fell to less than 7,400 in 2009.
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Walk On Auto Motor Coach Other Traffic
Canadian passenger traffic on the
Yarmouth–Maine route over this
period was much smaller by
comparison and predominantly
comprised of auto traffic, with a
smaller walk-on component.
Canadian auto traffic reached a
peak at 14,500 vehicles in 1999
and fell to 5,701 vehicles in
2009.
Canadian Visitors Entering Nova Scotia at Yarmouth by Mode
1996 to 2009
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1996
1997
1998
1999
2000
Walk On
Gardner Pinfold
2001
Auto
2002
2003
Motor Coach
2004
2005
Other Traffic
2006
2007
2008
2009
62
U.S. overnight visitors entering NS through Yarmouth largely from New England
Given that the visitor traffic on the on the Yarmouth–Maine route was largely comprised of
overnight (2 days or more) traffic, we examine the origin of US overnight visitors entering Nova
Scotia through Yarmouth over this period. As can be seen in the following figure, US overnight
visitors are largely comprised of visitors from New England, followed by the mid-Atlantic and
south Atlantic states. Overnight visitors from New England represented the largest drop off
between 2002 and 2005, followed with a steady continued decline between 2005 and 2009.
Visitors from the mid-Atlantic also showed a steady decline over the same period.
US Visitors (Overnight) Entering NS Through Yarmouth by US Origin,
(Auto, Motorcoach and RV Total) (2000-2009)
60,000
50,000
40,000
30,000
20,000
10,000
0
2000
2001
New England
2002
2003
Middle Atlantic
2004
South Atlantic
2005
2006
North Central
2007
South Central
2008
2009
Mountain+Pacific
We also we examine US overnight visitor traffic (non-commercial) entering Nova Scotia through
Yarmouth over this period by mode of travel as well as origin to determine whether there are
significant changes in auto, motor coach, and RV traffic, respectively. US overnight visitors
traveling by auto are largely visitors from New England, followed by the mid-Atlantic and southAtlantic states. Overnight auto visitors from New England represented the largest drop, and
decreased by more than one half between 2002 and 2005 (dropped from 44,645 in 2002 to
21,2002 in 2005), followed with a steady continued decline after 2005 to 11,049 in 2009. This
represents a 75 percent decrease between 2002 and 2009. Visitors from the mid-Atlantic also
showed a steady decline over the same period from 17,008 in 2002 to 4,296 in 2009.
Gardner Pinfold
63
US Auto Visitors (Overnight) Entering NS Through Yarmouth
by US Origin, (2000-2009)
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2000
New England
2001
2002
Middle Atlantic
2003
2004
South Atlantic
2005
North Central
2006
2007
South Central
2008
2009
Mountain+Pacific
US overnight visitors traveling by motor coach and entering Nova Scotia through Yarmouth were
predominantly visitors from the mid-Atlantic from 2003 to 2009, followed by New England and
the south-Atlantic states. Overnight motor coach visitors from the mid-Atlantic decreased from
3,523 visitors in 2002 to 581 visitors in 2009, an 83.5 percent decline between 2002 and 2009.
Visitors from the New England also showed a steady decline over the same period from (fell from
3,097 in 2002 to 1,277 in 2009).
US Motorcoach Visitors (Overnight) Entering NS Through Yarmouth
6,000
5,000
4,000
3,000
2,000
1,000
0
2000
2001
New England
Gardner Pinfold
2002
2003
Middle Atlantic
2004
South Atlantic
2005
2006
North Central
2007
South Central
2008
2009
Mountain+Pacific
64
The number of US recreational vehicle (RV) visitors (overnight) entering Nova Scotia through
Yarmouth was higher in 2000 than in 2002 and decreased since 2000, but leveled off between
2004 and 2009. US recreational vehicle (RV) visitors from New England decreased from 685
visitors in 2000 to 2571 visitors in 2005. From 2005 through to 2009, RV visitors from the southAtlantic states represented the largest group of RV visitors.
US Recreational Vehicle (RV) Visitors (Overnight) Entering NS Through Yarmouth
800
700
600
500
400
300
200
100
0
2000
2001
New England
2002
2003
Middle Atlantic
2004
South Atlantic
2005
2006
North Central
2007
South Central
2008
2009
Mountain+Pacific
US overnight visitors entering Nova Scotia via Digby increased in 2010
Following the closure of the Bay Ferries Yarmouth ferry service in late 2009, we note there was
an increase in total US overnight visitor road traffic (auto, RV, and motor coach) entering Nova
Scotia on the Digby ferry in 2010. In total, US overnight visitors almost doubled, increasing from
7,153 to 13,598, a 90 % percent increase. We also note that the largest number of U.S. overnight
visitors entering NS through Digby are from New England, and that this group had a significant
increase in 2010, rising from a low of 4,047 in 2009 to 7,536 visitors in 2010 (an 86.2 percent
increase in one year). Similarly, Overnight visitors from the mid-Atlantic increased from a low of
1,186 visitors in 2009 to 2,641 visitors in 2010 (greater than 100 % increase in one year).
While this is encouraging in the sense that there continues to be US interest in travel to SWNS
(US visitors to other parts of Nova Scotia would by-pass the Digby ferry and enter the province at
Amherst), the increment of overnight visitors that appears to have spilled over from the Yarmouth
ferry is only about 25% of the number taking the Cat in its final year of service (about 24,500
passengers). In other words, it would appear that a direct link between Maine and SWNS is
essential to maintain travel numbers to this region of the province (this point is reinforced by
overnight accommodation data, which shows that occupancy rates increased slightly or were
stable in all areas of Nova Scotia in 2010, except in SWNS where rates declined).
Gardner Pinfold
8,000
65
US Visitors (Overnight) Entering NS Through Digby, (Auto, RV and Motorcoach)
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2000
2001
2002
2003
New England
South Central
6.
2004
2005
Middle Atlantic
Mountain+Pacific
2006
2007
2008
South Atlantic
2009
2010
North Central
Projected Tourism Traffic Flows
Tourism traffic flows are projected over a 10-year span based on the tourism market analysis
above, input from key industry stakeholders and other economic information. As discussed
above, a number of key issues impact tourism traffic flows.





Canadian-US Dollar Exchange Rate
Fuel Prices
Rising consumer confidence in Canadian and US economies
Increase in consumer preferences for cruise tourism
Marketing and competition from a wide variety of other destinations
Conference Board of Canada tourism projections indicate a modest recovery
The Conference Board of Canada provides national and provincial tourism projections based on
their economic forecasting model and travel markets outlook analysis. The following table
provides the national tourism projections by the Conference Board of Canada. The values for
2010 are forecasted values based on the actual values in 2009. This table illustrates some key
results relative to tourism projections for Nova Scotia:



Tourism visitation was down in 2009 for Canada as a whole
Modest 1.4% growth overall in 2010 but US & Overseas visitation is still down
Tourism visitation from the US to Canada as a whole is forecasted to increase in 2011 by
1.6% with a modest growth of 1.8% in 2012 and 1.6% in 2013.
Gardner Pinfold
66
Table
Tourism Insights: Conference Board of Canada
Travel Markets Outlook for Canada
2009 to 2014
Canada
Total (`000s overnight province visits)
Domestic
Business
Pleasure
United States
Overseas
Total Expenditures ($ millions
overnight)
Travel Price Index
2009
104,815
-4.3
86,929
-3.5
5,688
-6.2
37,736
-4.2
12,653
-6.0
5,233
-12.1
35,689
-6.3
-0.62
2010f
106,271
1.4
88,934
2.3
5,835
2.6
38,608
2.3
12,249
-3.2
5,088
-2.8
37,029
3.8
3.00
2011f
109,749
3.3
91,980
3.4
6,038
3.5
39,939
3.4
12,443
1.6
5,326
4.7
39,206
5.9
2.51
2012f
112,908
2.9
94,692
2.9
6,220
3.0
41,104
2.9
12,664
1.8
5,552
4.2
41,416
5.6
2.61
2013f
116,077
2.8
97,432
2.9
6,402
2.9
42,259
2.8
12,864
1.6
5,780
4.1
43,714
5.5
2.61
2014f
118,845
2.4
100,025
2.7
6,551
2.3
43,342
2.6
12,864
0.0
5,956
3.0
45,746
4.6
2.50
Sources: Statistics Canada (preliminary release), The Conference Board of Canada
The Travel Price Index rose in 2010, having lost ground in 2009 (meaning that travel was more
affordable in 2009, especially for international travelers. The exchange rate will impact prices in
2011 as the Canadian dollar is expected to remain strong throughout the year.
The following table provides the tourism projections by the Conference Board of Canada for
Nova Scotia. Based on the Conference Board of Canada projections total US visitation to Nova
Scotia is projected to increase 1.1% in 2011 over 2010, followed by a modest yearly increase
ranging from 1.4% in 2012 to 1% in 2014.
Table
Travel Markets Outlook for Nova Scotia
Conference Board of Canada
2009 to 2014
Nova Scotia
2009
2010f
2011f
2012f
2013f
2014f
Total (`000s overnight province visits)
(% change)
Domestic
3,192
0.3
2,746
0.3
162
3.5
1,174
1.5
298
-3.0
148
-6.0
1,145
-0.3
0.5
3,212
0.6
2,788
0.6
164
1.0
1,192
1.5
284
-4.8
140
-5.1
1,175
2.6
3.10
3,295
2.6
2,861
2.6
168
2.5
1,222
2.5
287
1.1
147
4.9
1,240
5.5
2.8
3,365
2.1
2,921
2.1
172
2.2
1,245
1.9
291
1.4
153
4.0
1,297
4.7
2.4
3,432
2.0
2,980
2.0
175
2.1
1,267
1.8
294
1.1
158
3.4
1,357
4.6
2.5
3,497
1.9
3,036
1.9
179
2.0
1,289
1.7
297
1.0
164
3.3
1,418
4.5
2.5
Business
Pleasure
United States
Overseas
Total Expenditures ($ millions overnight)
Travel Price Index
Sources: Statistics Canada (preliminary release), The Conference Board of Canada
Gardner Pinfold
67
Recovery of Yarmouth-Maine ferry traffic begins with the right travel experience
Taking these projections into consideration, and in light of a range of other factors, we expect
road-based tourism traffic from the US to recover much of the ground lost over the past 10 years.
We believe it is unreasonable to expect a full recovery because a significant part of the demand is
now being met by other means, chiefly, cruise ships. Also, during the peak years, Yarmouth
benefited from the traffic generated from two markets with somewhat different demand profiles.
A new service would operate on just one route, while offering a modified cruise experience.
We expect a well-developed and well-marketed seasonal cruise ferry operating between
Yarmouth and Portland could build from an initial traffic level of 120,000 passengers (US and
Canadian). We believe this represents a reasonable year-1 estimate for the following reasons:






It is conservative in that it represents only about one-third of the total achieved during the
late 1990s-early 2000s.
The Cat experience in its final year or two of service does not provide a useful indicator
of US ferry travel demand for two reasons: apparent discontent with the quality of the
ride (nausea was common), and 2008 and 2009 coincided with one of the worst economic
downturns in US history.
Consumer confidence in the US and Canada are rising as the global economy is showing
signs of recovery.
Border security and passport requirements are becoming mainstream, no longer
representing a barrier to travel (clear explanations of what’s required would be part of
any marketing campaign).
As the US economy strengthens and the dollar recovers its dominant role as an
international reserve currency, it will appreciate against the Canadian dollar, reducing the
cost premium now faced by US travellers in Canada.
Though we expect fuel prices to remain high and continue to exert downward pressure on
discretionary spending for road transportation, this could work to the advantage of a ferry
service since the latter would reduce road costs. This should also form an important
aspect of a marketing campaign.
We believe there would be great interest in a newly launched Yarmouth-Portland or YarmouthBar Harbor ferry service, though this depends in large part on the type of service. Our discussions
with tour operators and travel agents in the US indicate that there is latent demand for a ferry
service into Nova Scotia through Yarmouth. Tour operators would incorporate the ferry
experience into their tour itinerary, if the service offered the kinds of amenities and experiences
on-board that are offered by the major cruise lines. In other words, the desire is for a cruise ferry
that offers the passenger more than simply transportation.
Visitors are increasingly looking for experiential learning, an opportunity to participate in new
destination-related activities, and reasonably priced luxury amenities while onboard the vessel.
Given the shorter cruises now offered out of New York and Boston, the competitive pricing of 4day and 5-day cruise itineraries into Atlantic Canada, and the increasing focus by cruise lines on
younger families and couples, the resulting increase in cruise travel by US visitors is reflective of
changing consumer expectations. The traditional motor coach traveller is being replaced by aging
baby boomers seeking healthy and active travel.
Additional compelling educational experiences while on-board the Yarmouth-Maine cruise ferry
might include educational activities such as films and lectures on the Bay of Fundy ecosystem,
historical talks or folklore, photography lessons, culinary experiences (e.g., A Taste of Nova
Gardner Pinfold
68
Scotia), historical movies or videos, and other learning experiences. Visitors are also looking for
an improved culinary experience offering healthy choices, local food and wine offerings, as well
as traditional culinary fare.
Attracting US visitors to a newly launched Yarmouth-Maine ferry cruise would require new and
innovative travel promotions aimed at an aging but active baby boomer market, younger to
middle-aged couples and families, as well as younger adventure travelers. Advertising and
marketing efforts could include travel packages that combine a cruise ferry experience with a
land-based travel experience while in Nova Scotia (including tours along the south shore, deepsea fishing, Annapolis Valley tours, and longer tour packages including visits to Halifax and other
regions of the province). Marketing efforts should include web-based information as well as
newer forms of social media that travelers can easily access.
Yarmouth-Maine ferry traffic projection
In light of the foregoing, the following table provides an estimate of tourism-driven passenger
visitation over ten years of operation. This analysis uses a growth rate of 1.6% in Year 2,
reflecting an increased interest in a new ferry Yarmouth-Maine ferry service, followed by a
growth rate of 1.4% in year 3, and a modest growth rate of 1.2% in year 4 and 1.1% in the
remaining years.
Yarmouth-Portlant ferry - trtaffic forecast
Year
Walk On
Motor Coach
1
50,000
2,400
2
46,000
3,400
3
45,000
4,500
4
45,540
4,554
5
46,000
4,600
6
46,460
4,650
7
46,920
4,700
8
47,400
4,750
9
47,800
4,800
10
48,000
4,850
Overnight Auto
65,500
58,700
59,500
60,110
60,720
61,440
62,150
62,860
63,470
64,180
Other Traffic
2,100
1,900
1,930
1,950
1,970
1,990
2,010
2,030
2,050
2,070
Total
120,000
110,000
110,930
112,154
113,289
114,540
115,780
117,040
118,120
119,100
Gardner Pinfold

2 Yarmouth ferry report

Transcription

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