Moving Ferries Up‐market

Going up‐market is a strategy often proposed for the ferry industry to compete with the Channel Tunnel. In 1984, Sealink spent £6 million on a luxury service to Jersey and Guernsey, replacing a previous high volume/low yield marketing approach. Many criticisms can be made in retrospect of the marketing and pricing tactics used, which contributed to the £11 million loss incurred in the first year. However, given a direct choice between comfort and cost‐savings, most customers chose the latter. In the light of this experience the author argues that reinvestment in luxury ferries on the short sea routes to retain business in the face of competition will need to be financed by staff cost reductions rather than price increases.