Mackinac Island fears ‘economic strangulation’ by ferry. Will Lansing step in?

• Mackinac Island’s ferries are owned by a Florida-based private equity company that increased rates and sued the city when it tried to prevent it
• New legislation would allow the island to control all aspects of ferry service, including parking
• Fears are growing that increased costs will hurt tourism, the region’s top industry

MACKINAC ISLAND — Over 1 million travelers are spending more this summer to reach Michigan’s iconic vacation destination, and the officials fear price increases on the only ferries to the island could be devastating.

New fees could push the cost of a family day trip to the island to upwards of $200,  the result of a Florida company, The Hoffmann Family of Companies, gaining a monopoly on ferries to one of Michigan’s top tourist attractions.

Nowadays, when friends or family visit him on the island, “You’re into this for a lot of money,” bookstore owner Joe Brandonisio told Bridge Michigan.

In response, state Sen. John Damoose, R-Harbor Springs, introduced Senate Bill 304 in May that would allow the island to change its city charter to control “all aspects of ferry service.” 

The fear, Damoose said, is that “families are beginning to consider whether they can afford to go over to Mackinac Island.”

Tickets to the island are $38, despite the island government saying Florida-based Hoffmann had to hold the price to $36. The ferry operator also added unregulated charges: Passengers pay a $3 convenience fee, plus extra for bringing a bicycle or to skip the line. Some parking fees increased, too.

Mackinac Island “believes if it is to be saved from economic strangulation by this Florida based company, and Michigan tourists are to be saved from being ripped off, we need to amend this charter,” Dennis Cawthorne, a former state representative and Mackinac Island resident, said Thursday as the Senate Committee on Regulatory Affairs considered Damoose’s bill.

“The Hoffmann family's unwavering dedication to Mackinac is rooted in a deep respect for its history, a passion for its preservation, and a vision for its thriving future,” Geoff Hoffman, co-CEO of the Hoffman Family of Companies, said in an emailed statement. “We are proud to contribute to this incredible community through our commitment to excellent service for Mackinac Island visitors, workers and residents.”

Chris Shepler, president of Shepler's Mackinac Island Ferry Service, testified the price hikes were necessary to continue established service and maintenance. Now an employee of Hoffmann, he and his family sold the three-generation ferry business to Hoffmann in 2022. 

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Running fast ferries, including maintaining the docks and parking lots, “is not cheap,” Shepler said.

“If we're not allowed to make money to pay for upkeep, then we have to find it another way, “ Shepler said, noting that staff uniforms, decorative flowers and shuttle services could be cut.

‘Ferries … are the road’

The ferry controversy is forcing the region to confront the fact that much of its tourism is tied to a major Florida private equity company.  Hoffmann’s holdings in Michigan extend beyond the docks to multiple other sites on the island and in Mackinaw City and St. Ignace. The company says it owns 51 buildings and 6,500 parking spaces in the area, employing 500. It owns the newspaper on the island and in St. Igance. Throughout the country, the company owns 100 brands and employs 11,000.

Hoffman sued Mackinac Island in March after Mackinac Island denied its rate increase, a move city leaders say is permitted by the city’s charter. Mackinac Island counter-sued. 

The situation illustrates the vulnerability of the island’s residents and tourist industry, Damoose said. Since there is no actual road to the island, Damoose said, “the ferries basically are the road.”

“Absolutely nobody comes to northern Michigan just to ride the ferry,” Damoose said.

Shepler answered multiple questions from legislators on Thursday, including some who pressed for the purchase price of his business and costs of operations. 

Those details can remain undisclosed with a business under private ownership, he said. 

But he also defended how he and the Hoffmann company are continuing to run the ferry legacy in Mackinac amid cost hikes. The $2 rate request declined by Mackinac Island was the first request in two years, he said. 

Despite multiple potential buyers, the Sheplers chose to sell to Hoffmann because of the family ownership, Chris Shepler said. 

“(We were) making sure that this private equity firm doesn’t come in and break up everything,” Shepler said. “They lived up to that commitment.”

Costs increased after Hoffmann bought the last competing ferry company in 2024, now the Arnold Mackinac Island Ferry, and faced increased maintenance because of the condition of the fleet, Shepler told legislators.

Shepler remained in budget by cutting expenses, he said. That included trimming the number of ferry passes to the island’s hotels, which in turn generated ill will as the ferry price war escalated.

The Grand Hotel has had to pay $85,000 more this year to shuttle passengers to the island, the city said in a court filing.

“Elimination of (ferry) competition is already hurting the wellbeing of residents who can no longer regularly see their family members, limiting the ability of commuters and tourists to visit the Island, and affecting the economy of the Island,” the city argued in court documents.

‘One tiny nail in the coffin’

Mackinac Island tourism bureau officials are trying to assure visitors that the ferry spat is a local issue that doesn’t need to impact travel to the island. The bureau spends about $2 million per year in marketing, adding $155,000 last fall and this spring on “advertising to overcome the bad publicity,” Timothy Hygh, director of the island’s tourism office, said in a court filing to support the island’s position in the lawsuit.

Businesses are still assessing this year’s season. David Wood, general manager at Winchester’s Whiskey and Bourbon Room and the Carousel Arcade on the island, said the dip in Canadian tourists has been obvious to businesses. 

Some of that’s from the higher costs of reaching the island, he said, which he said “puts a little dent in the average man’s pocket,” but it could also be from cooler temps so far this year and federal trade policies that have prompted some Canadians to boycott the US.

“Every little thing adds up,” he said. The ferry price hikes are “just one tiny nail in the coffin.” 

Overall, however, Wood said he’s glad the Hoffmans came to the Straits because the size of their operation and their wealth will bring stability to the ferries’ operations.

“They have the ability to invest,” he said.

No vote was taken Thursday on Damoose’s bill. If it is passed in the full Legislature, it would allow Mackinac Island to put the measure to a vote of its residents 60 days after Gov. Gretchen Whitmer signs the approved bill.

“Ideally, Mackinac Island would be able to just handle this on their own, but since they are the only city in Michigan that does not have home rule we have to do it” through the Legislature, Damoose said. 

He offered an amendment on Thursday that he said he hoped would clarify that this bill should not hurt Mackinaw City or St. Ignace’s ability to make their own decisions about the ferry docks and parking lots.

Margaret Doud, Mackinac Island mayor, did not respond to Bridge’s request for comment. 

However, last August, as Hoffmann acquired the remaining independent ferry line, Doud sounded hopeful that the city could navigate what she described as the new “monopoly” at a council meeting. 

“We all have to work together to take care of our residents and visitors — we all need to be proactive, and not reactive, and support each other as we get through this,” she said. “In the end, everyone will benefit from better service to Mackinac Island.”