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Hong Kong’s Star Ferry struggling to stay afloat

Hong Kong’s famed Star Ferry Company revealed its biggest-ever decline in passengers as the company warned of an ‘uncertain’ future

It carried 3.2 million passengers in the first six months of the year, down 68% on 2019.

The company has operating costs of HK$1 million per week, it said.

The iconic ferries have been operating for over 120 years and are a major tourist favourite

It currently operates two routes – Wanchai to Tsim Sha Tsui and Central to Tsim Sha Tsui.

The Star Ferry's ferry crossings at Victoria Harbour are acclaimed as an important part of the commuter system between Hong Kong Island and Kowloon, and essential journeys for visitors. The National Geographic Traveler named the ferry crossing as one of 50 places of a lifetime. The ferry ride is also well known as one of the world’s best value-for-money sightseeing trips.

The Star Ferry traces its origins to 1880 when Dorabjee Naorojee Mithaiwala, a Parsee cook, embarked on a new vocation. He began a ferry service across Victoria Harbour with his steamboat, the Morning Star. The fledgling service was known as the Kowloon Ferry Company. A local newspaper reported in 1888 that the ferry ran at all hours between Pedders Wharf and Tsimshatsui on a 40-minute to one-hour trip. On Mondays and Fridays, the service halted for the boat’s coaling. By 1890, the Kowloon Ferry boasted four single-deck Star Ferries. Later on, the ferries acquired a second deck.

During the next ten years, businessman Sir Catchick Paul Chater bought all the boats and in May 1898 the Star Ferry Company, as it is known today, became a public company. Its name derives from the ferries, which all bore the name “Star”.

The Company celebrated its centenary in 1998. Its fleet of 9 ferries is now serving two franchised ferry routes between Tsimshatsui and Central,Tsimshatsui and Wanchai. In addition to ferry services'

These operation statistics would normally suggest an imminent collapse for an ordinary company, but the Star Ferry will likely live on thanks to the backing of a billionaire family and its retail ambitions — and deep love in the city for an institution that many will be saddened to lose.

The Star Ferry Company is owned by property company Wharf Real Estate Investment Co., which operates the ferry on a 15-year franchise granted by the government. Meanwhile, the Star Ferry pier in Tsim Sha Tsui, one of Hong Kong's most popular shopping destinations, is just minutes-walk away from Harbour City, the flagship mall of Wharf. Pre-pandemic, many tourists would ride the "must-see" Star Ferry from Hong Kong island and make their way toward the shopping center that has everything from Uniqlo and Lululemon to Hermès and Chanel.

Wharf is owned by the family of Peter Woo, Hong Kong’s fifth-richest man with a net worth of $18 billion, according to Bloomberg data. Patrick Wong, a real estate analyst with Bloomberg Intelligence, said that keeping the Star Ferry afloat is essential to the company’s retail ambitions and one that it won’t easily give up. It helps that the business is just a small part of Wharf’s overall portfolio.

Four decades later, a government decision to demolish the pier in Central, close to the city’s main financial buildings, triggered sit-ins and hunger strikes. The movement is widely credited with sparking renewed interest in local identity and a new generation of protesters. Many continue to bemoan the site of the new pier in Central as being inconvenient for pedestrians and gaudy in its aesthetics.

The idea that the Star Ferry’s survival is dependent on a rich developer and Chanel handbags is hardly the romantic outcome befitting of such a storied institution. But Hong Kong is a city where heritage conservation is often superficial or totally sidelined in favor of development, and efforts to rescue heritage sites frequently fall onto wealthy tycoons who can monetize them.

Some examples include 1881 Heritage, a former marine police headquarters near the Star Ferry in Tsim Sha Tsui built in a Victorian style, which now contains a hotel and shops such as Van Cleef & Arpels and is owned by Hong Kong's richest man Li Ka-shing. Another tycoon, Adrian Cheng of conglomerate New World Development Co., recently bought the city’s oldest theatre. While he plans to preserve the building, the space behind the theater will be turned into apartment towers.

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