With an influx of federal funding and 17 percent growth rate, the old-fashioned ferryboat is making a comeback.
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As highways in and around urban centers become more congested, the old-fashioned ferryboat is making a comeback. Private ferry services in urban areas that offer both a commuter function and recreational component are thriving.
One company, Clipper Navigation, hit just under $30 million in revenue in 2009. It shuttles visitors back and forth from Seattle to Victoria Island and offers bundled vacation packages. Another, Hornblower Cruises and Events, which is based in San Francisco, has managed to capitalize on the recreational market in California and New York, winning concession contracts with the National Park Service to provide ferry transportation to Alcatraz and Ellis Island and as a result saw almost $130 million in revenue this past year.
Given a significant amount of federal spending for building ferryboats and terminals is included in the 2009 economic recovery act, opportunities are expanding for eager and well-endowed entrepreneurs. Terry MacRae, CEO of Hornblower Cruises and Events, has been in the water transportation industry for 30 years, and he predicts in the coming years, public sector agencies will increasingly turn to private companies for help. (Read the full story, including more of MacRae's industry outlook.)
Barriers to entry, though, are steep. A new Coast Guard-certified ferryboat that carries 150 passengers can cost about $6 million, and operators must pass stringent inspections of their vessels. Overall, the industry experienced 17 percent growth last year, according to AnythingResearch.com.
By the numbers:
Ranking in AnythingResearch.com's "fastest-growing industries that are hospitable to small businesses": 2
Year-over-year growth rate, according to AnythingResearch.com: 17 percent
Expected job growth in the water transportation industry through 2018, according to the Bureau of Labor Statistics: 15 percent