Motel and hotel operators in Picton say they could lose up to 80 per cent of their business if the Government decides to sail their guests south.
The operators who spoke to the Marlborough Express said up to eight in every 10 guests stayed in Picton only because they were heading for the ferry, or had come off one.
An anonymous survey in January showed most accommodation businesses expected to lose at least half their turnover if the ferries left Picton, with five of the 11 estimating they would lose at least 80 per cent.
They are concerned those guests will disappear - along with their business - if the Government builds a new interisland ferry terminal at Clifford Bay, on the Marlborough coast between Seddon and Ward.
The Gables bed and breakfast co-owner Ian Allen has run the homestay in Waikawa Rd with his wife Paula for 12 years and says they could lose 80 per cent of their business, at least in the short term, if the ferries stopped coming to Picton.
That percentage was common among smaller accommodation providers, he said.
Most guests stayed one night after getting off a ferry or before boarding one.
"I would like to think in the long term Picton will develop into more of a destination, better than it has been, but if they do take away the ferries there will be an initial blow to us.
"The other hope is that someone will fill the gap to bring in maybe passengers and light freight. If the proposal is all about getting freight to Christchurch and back, well I think tourists would choose Picton over Clifford Bay if they could.
"Interislander has been like a sword of Damocles hanging over our heads, always threatening to leave. I think most of us are at the point where we just want a decision either way."
Anglesea Motel owner Jon Nicol said most guests were ferry passengers and losing the ferries would have a significant impact on his business.
He had lived in Picton since 1974 and first heard the threat of the ferries moving in 1975.
"We know they're looking at moving the ferries - they've been talking about it on and off for 30-odd years.
"Some people say there will be passenger ferries kept on but who knows how much of that is true?
"Other people might say that it'll become more like Queenstown, but it certainly won't if the council doesn't relax some of the red tape."
At a public meeting in Picton on Monday, Jasmine Court Travellers Inn owner Tommy Waters said 75 per cent of his business came from ferry passengers. Forcing them to use a terminal at Clifford Bay would ruin existing tourism opportunities in the Marlborough Sounds.
Another business owner said at least 60 per cent of his business was ferry-related. "What do we do if they move?" he said. "My business is my retirement fund."
While most operators see only bad news for the town under the proposal, a Waikawa Rd motel owner said accommodation providers might need to become more proactive in marketing to lure guests.
The woman bought the motel last year based on the ferry traffic but would work harder to create discount packages and other promotions.
It was no use having a "poor me" attitude and watching business disappear, she said.
"If we start building up what we have now, the effect won't be such a shock if they do go. It would be nice to keep the ferries coming but there are things people can do to help themselves."
Mercure Picton manager Matt Juniper said it was too soon to tell the effect of the proposal.
- The Marlborough Express