A stumble out of the gate and a deeper financial hole than expected combined to sink V2V Vacations’ passenger ferry service after just two and a half years in business.
The service, which launched in May 2017 and connected the downtowns of Victoria and Vancouver, was shut down permanently this week after its Australian parent company, Riverside Marine, decided it could no longer justify the financial risk.
“The board made the decision before Christmas, but we had a few other things we were looking at, some opportunities we were trying to keep it going, but they all came to an end last week,” said general manager Julian Wright. “We had significant growth last year, [but] it simply wasn’t enough.
“We wanted to be more confident coming into this year, we wanted to have doubling of the business year-on-year, which we didn’t do, and that’s probably what led to the decision.”
Wright, who moved to Canada in 2018 to run the V2V division of Riverside, said he is disappointed as the family had been optimistic and enthusiastic about establishing passenger ferry service between Victoria and Vancouver.
Wright is the nephew of Riverside CEO Hume Campbell, and is the fourth generation to be involved in the family business.
When he took over V2V, Wright said Riverside’s 90-plus years in business moving people on the water could make the service viable, given enough time.
In an interview Tuesday, Wright said they just ran out of time to produce results. “We had trust issues with consumers and locals and I think we did a lot to fix that, but it came down to we didn’t get the financial returns and revenue growth to indicate to us that more investment in this business was worthwhile,” he said.
The service got off to a rough start. The inaugural sailing of the 242-seat V2V Empress was pushed back two weeks to the middle of May 2017 to allow for more crew training. It struggled with low ridership and then, just three months into the season, the vessel blew an engine and was sidelined for four months at Point Hope Shipyard as new engines were installed.
That cost the company $2 million, on top of the $10 million it had already spent to establish the firm. The vessel returned to service in January 2018.
“It was a wonderful product, it needed more time to settle and make things right and go through the growing times,” said Wright.
When asked what they could have done differently, Wright said that will require a deeper dive and an internal review. “But there’s no question the mechanical failure didn’t help on the trust side of things. But in terms of how much we marketed ourselves, engaged the community, I think we did a really good job there,” he said. “Every new business, especially in a new country, will have its growing pains. We’re certainly not perfect, but we didn’t do this half heartedly, either.”
Paul Nursey, chief executive of Destination Greater Victoria, said V2V gave it a shot, but in the end had to make a business decision.
“It’s disappointing, but not terribly surprising,” he said, noting his initial meetings with the company included talking about a three-year window in which Riverside hoped to establish itself. “The reality is they made a prudent decision. They gave it a really determined effort and they made a prudent decision after three years of trying.”
Nursey agreed the mechanical failure in the first few months was a killer that added both financial pressure to the company and increased skepticism of the service. “It’s not a big loss [to Victoria] in terms of passenger volume, but if there’s any loss, it was a neat and interesting, high-end experience, but it’s not a big loss in terms of transportation capacity,” he said.
Wright said the company might try and recoup its losses by optimizing its assets. They will consider all options, including selling the vessel and other assets, or employing them in another market.
The closure immediately affected eight on-shore jobs and 16 crew. The crew is seasonal, as the vessel only sailed between March and October.
The company says it is offering full refunds for those holding tickets for the 2020 season. Wright estimates that is about 1,000 people, most of whom bought tickets via travel agents and other resellers. V2V will have staff on hand to deal with the 200 or so customers that bought tickets directly through them.
Affected ticket holders can call 1-855-554-4679 during office hours or email email@example.com.