SALEM — The Salem ferry doesn't attract enough passengers or make enough money to be a viable, daily service from June through October, according to the ferry operator.
"We really gave it a great effort, but financially it's just not working out," said William Walker, president of Water Transportation Alternative of Quincy, which may be stepping aside after operating the Salem-to-Boston service for the past six years.
When the 149-passenger Salem ferry begins a new season on Memorial Day weekend, there could be a new operator.
Walker, who is still under contract, told city officials he planned to cut back service this year, possibly running a daily, round-trip ferry only in the peak tourist months of July and August and operating a three-day, weekend schedule in the shoulder seasons.
The ferry runs from Memorial Day through Halloween. While schedules have varied over the years, it generally offered about a half-dozen daily, 50-minute runs between the two cities.
Walker, who does business as Boston's Best Cruises, cut back the Salem run to long weekends last fall.
The decision not to operate a full schedule this season prompted Mayor Kim Driscoll to announce that the city will be putting out a request for proposals seeking a new operator. She said she already has had inquiries from interested companies.
Walker said he has had a good working relationship with the mayor and City Council and contended he has tried hard to build up the business. Although criticized in some quarters for not promoting the ferry enough, Walker said he spent $85,000 last year on advertising.
During a shortened 2011 season, the Salem ferry carried 73,000 passengers. That's just not enough business, Walker said.
"We'd like to get it up to 100,000-plus riders," he said.
After running a state-subsidized demonstration project in the late 1990s, Salem began full ferry service in 2006 when it signed a contract with WTA. The company is one of the largest around, operating a year-round MBTA commuter ferry between Quincy, Boston, Hull and Logan Airport; a Boston Harbor cruise; and a New England Aquarium whale watch.
All of those businesses make money, according to Walker.
The T commuter ferry, however, receives a $1.2 million state subsidy.
The Salem ferry, which is owned by the city of Salem, does not receive a subsidy.
WTA pays a $100,000 user fee to the city. It also picks up the bills for fuel, repairs and employee-related costs.
Walker said he has been hurt in recent years by skyrocketing fuel costs, the sagging economy, and unpredictable weather on the open-ocean run from Salem to Boston.
Earlier, Walker told city officials he could no longer afford to do an early morning commuter run, which drew only about 40 passengers.
Ridership, he said, has "kind of flattened out" the past few years. "Part you could say is weather-driven, part you could say is the economy," he said.
In 2010, nearly 90,000 people rode the ferry. However, the jump in ridership was due, in part, to a rate cut of up to 20 percent in an effort to compete with train service. An adult round-trip ticket, for example, dropped from $24 to $19.
Kate Fox, executive director of Destination Salem, the city's tourism office, said the Salem ferry faces a unique challenge.
"It's neither transportation nor excursion, but it's both," she said "... If it's going be transportation, it has to be competitive with the train, and if it's going to be an excursion, it needs to have either concierges or tour guides, and it's been very hard to balance that."
Russ Vickers, a former president of the Salem Partnership, a major backer of ferry service, said Salem may not be able to support a daily ferry other than during the peak tourism season.
"You've got to tailor the service to the market demand," he said, "and I think Bill's (Walker) probably got it right. ... If the state or public wants more, then I think there's got to be a subsidy. ..."
"It's a very expensive boat to operate, and every time you make a round trip, it's a lot of fuel you're burning."
Walker said he wants to stay in Salem but doesn't know if that's possible.
"If there was a way to make this work, we'd love to be part of the solution," he said. "But part of the solution is you guys may have to find another operator."
Salem ferry ridership
Source: Water Transportation Alternative