The fast ferry service from a Sussex port is being scrapped prompting fears about trade from nearby businesses.
Hoverspeed took over the service when P&O Stena Line pulled out
Hoverspeed has announced it is cutting its service, which has transported people from Newhaven to Dieppe in two hours from April to October since 1999.
The firm said it struggles to compete with rivals Transmanche Ferries, which is subsidised by Dieppe authorities.
Negotiations between the two companies that would have seen Transmanche take over the fast service have broken down.
The announcement has prompted fears from businesses in the town because it will mean a drop in visiting tourists.
Flora Papanicolau, manager of the Harbourside Hotel, said: "It is very worrying because the majority of business we get comes from the ferries.
"And without them our business is in jeopardy."
Geoffrey Ede, managing director of Hoverspeed, said: "We have been in discussions for some time regarding the charter by Transmanche of the SuperSeaCat vessel to be manned by Hoverspeed crew.
"It is disappointing for us but more importantly our passengers that negotiations have proved inconclusive.
"The service which was scheduled to restart on 28 April will not now operate and the craft will be redeployed."
The Transmanche ferry service has been beset by problems in recent months with ships withdrawn at short notice and services cancelled.
But the company has said new ferries are on the way which will improve the situation.
It said it had not ruled out further negotiations with Hoverspeed next year.