A group of businessmen connected with the Scotia Prince, a ferry that ran between Portland and Yarmouth, Nova Scotia, from 1982 to 2004, wants the province to abandon the Nova Star ferry in favor of its proposal to operate a smaller, less expensive ship on the same route.
The group, which is creating a company called Canamerica Cruises, has been put together by Bruce McNeil, a Halifax resident who for nine years managed sales, the casino operations and marketing efforts for the Scotia Prince.
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Henk Pols is the lead consultant for the effort. The 80-year-old Cape Elizabeth resident is the former president of Prince of Fundy Cruises, which owned the Scotia Prince until 2000.
Martin Salzedo, former CEO and president of Celebration Cruise Line, a small line with one ship that operates between Florida and the Bahamas, would be president and CEO of Canamerica Cruises.
McNeil’s team believes that Nova Star Cruises, which on Tuesday finished a disappointing maiden season, will never succeed financially because its ship, the Nova Star, is too large, too costly to operate, and charges too much.
McNeil said a ferry service on the route could be profitable if operated with a smaller ferry – one with a capacity of 650 to 700 passengers rather than the Nova Star’s 1,120-passenger capacity. The ship would have some cruise ship amenities, like live entertainment and a casino, but it wouldn’t be as luxurious as the Nova Star, which cost $165 million to build, McNeil said.
“A $165 million ship on that route will never work,” he said. “You will never pay for the vessel.”
During the peak season this summer, it cost $1,115 for two people to make a round-trip on the Nova Star, including a cabin and car transport, although the company offered several discount packages to attract passengers. McNeil said the Canamerica group’s fares would be 40 percent to 45 percent lower, and the company expects to focus on providing basic ferry transportation rather than competing with cruise ship lines.
“Pick your market and cater to them,” he said, noting that people with the money to afford a Nova Star ticket would be more likely to spend it on a traditional cruise than a ferry ride.
McNeil said the Nova Scotia government can escape from its contract with Nova Star Cruises because the company has failed to deliver on its terms. The contract calls for the government to provide Nova Star Cruises with a forgivable loan of $21 million (Canadian) over seven years, but in the first season, the government allocated $26 million so Nova Star could pay its bills.
McNeil is proposing that the government provide Canamerica Cruises with the same kind of financial package offered to Nova Star. The difference, he said, is Canamerica Cruises will own the vessel and use it as collateral for its government loan, which would allow the province to seize the vessel if the company does not pay the loan back.
Nova Star Cruises is leasing the Nova Star from the Singapore shipyard that built it.
Sarah Levy MacLeod, a spokesperson for the Nova Scotia Department of Economic and Rural Development and Tourism, said the province is working with Nova Star Cruises to evaluate its first season and discuss plans for next year.
“We don’t want to lose the positive momentum we were seeing,” she said in an email. “That said, if a company has a proposal they want us to look at, we are prepared to look at it. Our main interest is to ensure a continued reliable ferry service between Yarmouth and Maine, based on realistic costs, the right business plan, and the best interests of Nova Scotians.”
Dennis Bailey, spokesman for Nova Star Cruises, said it will take time to rebuild the ferry service, which petered out when The Cat, a high-speed ferry, ceased operations after the 2009 season. He said the company believes the service did well in its first season despite some big obstacles, primarily its late start. The company wasn’t able to sell tickets until the end of March because it lacked a federal permit.
“We are going to be better next year and better after that,” he said. “People are going to need to be patient here. Give it more time before they change horses in midstream.”
He said Nova Star selected a vessel that met the province’s requirements set out last year in a request for proposals, and it was the only available vessel that met that criteria.
The Nova Star ended the season carrying 59,018 passengers, far short of the 100,000 it had expected. In 2000, the last season the Scotia Prince was operated under Pols, the ferry carried 158,218 passengers, Pols said. If Canamerica secures a contract, it would maintain the same schedule of one daily round-trip from April through October.
Pols said the operators of the Nova Star made several missteps due to inexperience, such as not knowing the company needed a permit from the U.S. Maritime Administration to sell tickets.
He said McNeil’s team won’t make those kinds of mistakes. “I think what they are trying to do is surround themselves with people who know how these things are supposed to work,” he said.
ANOTHER ATTEMPT
This is not the first time McNeil has tried to win government funding for a ferry service. In 2011, he headed a company called Scotia Cruises, which proposed restarting Portland-to-Yarmouth ferry service. The government rejected the proposal, saying it was too expensive. Scotia Cruises also had proposed a Halifax-to-Portland service, but that plan went nowhere.
Darrell Bryan, president of Clipper Vacations, which operates a ferry between Seattle and Victoria, British Columbia, said he likes the team McNeil has put together.
Still, any new ferry service will need time to build business before it will be profitable, he said.
“No matter how good they are or how experienced they are, they will go through a period of loss,” he said.
Jeff Monroe, a seaport consultant who worked as port director for the city of Portland while the Scotia Prince was operating, said the Nova Scotia government is fortunate that Canamerica Cruises plans to make a proposal because it creates competition and gives the government options.
He said a ferry service that focuses on low prices rather than luxury stands a better chance for success.
“What you need between Nova Scotia and Maine is basic transportation,” he said. “You don’t need a cruise ship.”
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