Ferry service business needs radical course change in business strategies

To the Expositor:

As a real estate broker, market value appraiser and cottage owner on the Island for the past 40 years, I read with interest the articles as well your editorial in the September 4 edition of the paper pertaining to the proposed Official Plan.

As was stated and further supported by building permit statistics, a significant portion if not most of the potential future development on the Island is based on recreational and or retirement residential usage with an emphasis on waterfront property development.

No one will argue the significant impact that population growth with have on the future economic well being of the region. In the southern Georgian Bay area where I reside and run my real estate business, I can attest that our local real estate market and indeed the economy is being driven by those from southern Ontario looking to purchase recreational and or retirement properties. Their arrival has had a profound impact on the local landscape both visually and economically. The economic benefits are many with additional retail, professional and other services being established and successfully run to meet the needs of a growing population.

I can further attest that planning restrictions, development and other fees, improperly implemented can have an adverse impact on development. Whether it involves a large scale single family housing/condominium project or simply a couple looking to build their dream recreational or retirement home, planning and zoning along with the associated fees can effectively derail the largest to the smallest of projects. Manitoulin has in my opinion, however, a much more pressing issue affecting future development and its economic prosperity, that being the matter of accessibility.

On numerous occasions I have commented on the plight of the Owen Sound Transportation Company (OSTC), stemming from your paper’s numerous articles as well as my personal experiences after several decades of ferry usage. On the Friday night of this past Labour Day weekend, I arrived in Tobermory for my reservation one hour prior to the 8 pm sailing as required, only to find the ferry parking lot perhaps 50 percent full. The Chi-Cheemaun, with little more than 50 percent of its capacity utilized on the Friday evening of a long holiday weekend was not so long ago unimaginable. This clearly illustrates the dire predicament that the OSTC now finds itself facing. With a steady decline in ridership totaling 22 percnt from 2005 to 2011 this is not a one weekend or one season trend. The ferry’s revenue stream is essentially in a rapidly declining state and contrary to your July 17 cover story entitled “Ferry loss would be devastating to South Baymouth” it would be foolish to believe that the lack of a ferry service would not have a significant ripple affect across the entire Island.

Notwithstanding the ongoing improvements to Highway 69 which is playing a significant role in the ferry’s dilemma, reduced accessibility even just seasonally via the loss of the ferry would have a profound impact on virtually every aspect of Island life. Less business for motel/resort owners, gift shops, gas stations and other retail establishments is the first and perhaps most obvious. What about development potential and the value of existing recreational and other properties? These too would be adversely affected if the only means of accessing the Island was via the single lane bridge at Little Current.

It would be naive to believe the Ontario Government will idly let this provincial agency continue to flounder to the point of running up large annual operating losses resulting from the ongoing decline in revenues. With a provincial debt expected to reach $272 billion by the end of 2013, you can bet that everything will be under scrutiny for potential cost savings especially if a new party comes in to power with the next election. Many people I spoke with this past summer all shared the same skepticism as to whether the ferry service would continue to be operating in five to seven years.

Following the detailed study released on behalf of the OSTC by the consulting firm CPCS Transcom Limited earlier this year, a number of opportunities and recommendations were made. Early last spring the OSTC announced a number of initiatives that were being implemented in an attempt to arrest their declining revenues. This included the elimination of the controversial “reservation fees.” While this was a welcome move by those of us that use the ferry service regularly, the elimination of the reservation fee was offset by yet a further increase in fares. At the time these changes were announced, users were promised that a “Frequent Sailor” discount or loyalty program would be “announced at a later date.”

In late May while attempting to book an online reservation, I began searching the OSTC website to see what I could find about the promised loyalty program. Buried in the news section of the website, most of which was pertaining to the remedial work being done on the docks, I found details of what was billed as a Frequent Sailor Loyalty Program. On May 30 I wrote a letter to Ms. Susan Schrempf, president and chief executive officer of the OSTC. In my letter I detailed the numerous shortcomings of the so-called Loyalty Program, also suggesting an alternative for her to consider. To this date I received no reply from Ms. Schrempf.

As of today I can no longer find any reference to the Frequent Sailor Loyalty Program on the OSTC website. I found no reference to this program on the OSTC Facebook page or in their Twitter postings. Frequent users of the ferry that I spoke with through the summer knew nothing of its existence. Stating that a Frequent Sailor Loyalty Program would be “announced” later in the season then essentially not falling through in making the program known to users hardly constitutes an announcement nor does it reflect the efforts of a company trying to turn their misfortune around. Essentially I feel that as a regular customer I have been both lied to and ignored.

For reservation purposes, many of us have been in the OSTC computer system for years including our names, addresses, telephone numbers and credit card information. No effort whatsoever has ever been made by the OSTC to communicate with us about the loyalty program or about anything for that matter affecting our use of the ferry. It is hard to conceive that a company, and especially its president, would not effectively be trying to turn their faltering business around by reaching out to their current and perspective customers with some proactive marketing. To Ms. Schrempf, it would appear that simply acknowledging a letter from a longstanding customer is of no consequence to improving customer relations and building a stronger business base to increase revenues.

The OSTC is a provincial agency subsidized by Ontario taxpayers. As the president and CEO of a company regardless of whether it is publically or privately owned, there comes with that position great expectations and a high degree of accountability. I know because I have been there. Failure to acknowledge a simple customer letter or to implement some positive marketing initiatives to stop the steady ongoing decline in ridership during her tenure has president illustrates a complete lack of ability and accountability on her part.

Last May I wrote The Expositor a letter in response to the delayed start to the ferry service again citing Ms. Schrempf’s role in the matter. Copies of the letter were sent to Michael Gravelle, minister, Northern Development Mines and Forestry. Mr. Gravelle’s ministry is responsible for the OSTC. Also copied were Michael Mantha, MPP Algoma-Manitoulin, Bill Walker, MPP Bruce Grey-Owen Sound, Carol Hughes, MP Algoma-Manitoulin and Larry Miller, MP Bruce Grey-Owen Sound. Some of these politicians were quick to use the media for their own political “grand-standing” by attending public rallies at the docks and making quotes in the newspapers regarding the low water levels affecting the docking issues that delayed the start to the season. None of these five individuals ever acknowledged my letter, further evidence of the lack of accountability that exists in the public sector.

If the OSTC is going to continue to exist beyond the next few years, it is going to take the immediate implementation of effective business strategies to capitalize on the market opportunities identified in the consultant’s report. I for one have no confidence in the ability of the current OSTC management to implement this strategy thus helping to ensure the ongoing viability of the Island’s ferry service.

With a provincial election perhaps looming in the not too distance future, the citizens of Manitoulin, the tourism sector and the entire Island business community needs to make the ferry service a key election issue with candidates. In no way am I suggesting that the adoption of the Official Plan is unimportant. As a real estate broker I deal with planning and zoning issues on a regular basis. The elimination of the ferry service however could have far more severe and far reaching economic implications to Manitoulin than proposed restrictions on recreational lakefront development and this issue needs immediate attention prior to another sailing season or we may be one season closer to having no ferry at all.

Yours truly,
Rick Crouch