Ferry Firm Tallink Suspends Service to City
By Galina Stolyarova
Estonian ferry operator Tallink has suspended its services to and from St. Petersburg that had been intended to continue year round.
Citing unexpected and significant rises in port fees, it announced Wednesday that it will cease the service it began in April between St. Petersburg, Helsinki and Tallinn on Jan. 2.
Tallink Group, a leading player in the eastern Baltic shipping industry, announced it will refund tickets to all passengers and compensate all expenses that would-be passengers may have spent on obtaining visas to Estonia.
Tallink's chief executive Enn Pant said a decision whether to resume operations will be made in spring and for that reason the company will not close its representative office in the city.
"There are very few passengers in winter, while harsh weather conditions force us to drastically increase fuel consumption," Pant said in a press release. "We aren't very optimistic that the visa regime will be eased [soon]. The last straw came two days ago when Morskoi Vokzal, the city's sea passenger terminal, told us they will double their fees from Jan. 1, and we definitely can't afford that."
Russia requires visas of almost all citizens except those from some CIS countries, while Russians need visas to almost all other countries, including Estonia and Finland.
Travel industry professionals were upset by Tallink's decision.
"I am not sure that the fees alone would be sufficient to make them suspend their services," said Sergei Korneyev, head of Northwestern branch of the Russian Union of the Tourism Industry (RST). "It is possible that their market forecasts were a bit more optimistic than realistic, and the fees became a formal excuse."
Vladimir Malik, director of Morskoi Vokzal, denied port fees are to double, but said that like many local hotels and companies involved in tourism, the port has decided to switch from billing clients in dollars to euros.
With the current exchange rate of $1 to 1.35 euros, this represents a 35 percent increase.
Vladimir Salikhov, general director of the St. Petersburg branch of Intourist Co., said the tendency to switch to euros and inflation are working against the fragile local tourism industry in general. He suggested a special commission, like one that regulates prices in the energy sector, be created to regulate pricing policy in tourism sphere.
"Reasonable market regulation can bring only positive results," Salikhov said. "We can only stop a decline of visitors by introducing an appropriate pricing policy, but not by charging our guests more than they can afford."
The lowest fare on Tallink to Helsinki is 25 euros per person. It costs 50 euros to take a car on board but four people traveling together can take a car on board for free. Cruise tickets allowing passengers to continue to the triangular route Tallinn and back to St. Petersburg are available for 40 euros. Since it started its service on April 1, Tallink's ferry Fantaasia, which can carry up to 1,200 passengers, has carried around 100,000 passengers on the St. Petersburg route.
Pant said the company's wish to continue serving St. Petersburg is emotional rather than rational.
"We aren't just going to forget about the St. Petersburg market because it has potential, but our partners will have to seriously consider the price-quality ratio, while neighboring countries should think about easing the visa regime for travelers," Pant said.
Korneyev admitted the port's infrastructure leaves much to be desired but said things are sure to improve with construction of the new passenger terminal, which is expected to receive first passengers in 2007. The up-to-$500 million, 400,000-square-meter terminal is to be built on reclaimed land covering 49 hectares. It will be able to process 1.2 million passengers a year.
"Despite the ailing infrastructure, I am convinced that if they had enough passengers on the route, it would have mattered to them less, but Fantaasia was getting at best a 50 percent occupancy in high season," he said. "It is a well-known fact that a new tourist product takes about three years to become profitable because time is needed for the customers to get used to it. I, just like many of my colleagues in the tourism industry, hope that Tallink will return in spring."
Earlier this year major Finnish shipping company Silja Line suspended its passenger ferry services between St. Petersburg and Rostock, Germany, via Tallinn until April, owing to a lack of passengers. When the company launched the route in spring it had announced that its Finnjet boat would operate year round. But the city is pinning its hopes on the ferry business.
"According to World Tourism Organization standards, a 3 percent to 4 percent growth is considered good," said Viktor Pakhomkov, deputy head of City Hall's external relations and tourism committee. "But the ferry and cruise ship business in St. Petersburg has demonstrated a stunning 30 percent growth over the past year."
Pakhomkov said next year, a high-speed catamaran will link St. Petersburg and Kotka in Finland, one hour's drive from Helsinki. The ferry ride is expected to take just 3.5 hours.