Cruise ships carried aloha
| • | Isle cruise ships sail into ports, mothballs |
| • | Attacks end firm's struggle to regain stability |
| • | Effects of bankruptcy filing |
By Andrew Gomes
Advertiser Staff Writer
On a typical Friday morning, cruise passengers from the Independence would be streaming into ABC store No. 59 for knickknacks, buying jewelry at Maui Divers, and flying off to Mount Wai'ale'ale with 'Ohana Helicopter Tours.
Photo by Deborah Booker; photo illustration by Stephen Downes • The Honolulu Advertiser
But last Friday that usual rush at Anchor Cove Shopping Center near Nawiliwili Harbor on Kaua'i was absent.
American Classic Voyages on Friday filed for bankruptcy and announced the shutdown of its two-ship interisland cruise operation. More than 1,000 people lost their jobs.
The Independence's port call was canceled by American Classic Voyages as it filed for bankruptcy and announced the shutdown of its two-ship interisland cruise operation.
And so the economic ripples began to form in Nawiliwili, Honolulu, Kahului, Kona and Hilo — regular ports of call for the Independence and sister ship the Patriot.
The idling of the ships, which carried an average total of 2,000 passengers a week to four islands where they did everything from shopping to horseback riding, will pinch Hawai'i's economy by an estimated $12 million in the next month, or about $150 million a year, based on state calculations.
Thousands of people — including stevedores, food and beverage vendors, small-business owners, tour operators, hoteliers, marine mechanics and 1,100 American Classic employees — will feel the sting of a shutdown that so far represents the single-worst loss of jobs and spending in the local economy since the Sept. 11 terrorist attacks staggered the tourism industry.
"It's going to impact everything from soup to nuts in the state, from tax revenues to palm frond sales," said Bill Thayer, Hawai'i representative for the North West CruiseShip Association and president of Waldron Steamship Co. Ltd. "It's unfortunate for the state."
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The economic loss will be largely replaced in December when Norwegian Cruise Lines bases a 2,200-passenger superliner in Honolulu. Still, the halt of American Classic business is being felt far and wide.
The Independence, like its sister ship the Patriot, brought well-heeled tourists to Hawai'i, who often then helped to sell the Islands' aloha spirit on the Mainland and elsewhere.
Joe Manalo, owner of Pearl City-based JMI Contractors, built his business on American Classic. The steel work Manalo does today for the cruise line represents about 30 percent of his work, and he's had to lay off about 30 percent of his crew.
"I had 12, now I'm down to nine right now, including me," he said. "We're going to have to diversify."
Barry O'Connell, president of food supplier HFM Foodservice, said losing the Independence and Patriot is like losing two of the state's larger hotels, and represents about $1 million of HFM's $80 million annual revenue.
"It's not good news," he said. "They were a good customer."
Erv Contrades could also be out $1 million in the next year. The operations manager for 'Ohana Helicopter Tours said he lost 84 booked passengers from the Independence on Friday alone. American Classic was one of his company's biggest contracts, averaging 100 to 130 passengers each time a ship was in port.
At McCabe Hamilton & Renny Co. Ltd., the stevedore firm that handles American Classic ships on Maui and Kaua'i, "there will be less work available for people," said Kraig Kennedy, company executive vice president.
At Tesoro Hawai'i, the Independence and Patriot burned 10 million gallons of heavy ship fuel a year. Andy Nomura, vice president of commercial marketing for Tesoro, would not disclose the value of the fuel, but said, "That's a big number."
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For Trans World Airlines — which already was severely affected by the Sept. 11 attacks and the resulting plunge in air travel — the shutdown of American Classic's Hawai'i operation means the airline loses a weekly charter flight that had been dedicated to ferrying the cruise company's passengers from the Mainland to Hawai'i.
Many Island retailers benefited from the willingness of cruise ship travelers to shop for Hawai'i-related goods. Other firms served the industry by transporting the luggage of disembarking passengers.
The economic impact also has hit the state. Gov. Ben Cayetano said the state will defer some Honolulu Harbor improvements that were designed primarily for American Classic. He added, however, that Neighbor Island harbor improvements remain a high priority and will go forward.
Still, the state will lose $1.2 million that the company paid in annual wharfage, cleaning, utility and other fees.
Neighbor Islands will feel the pinch as well.
The Maui Prince hotel in Makena entertained 250 to 400 American Classic passengers at a recent Tuesday lu'au set up just for them.
"It's a pretty big blow to us on the food and beverage side, to lose a lu'au of that magnitude," said Liana Mulleitner, who does marketing for both the Maui and Hawai'i Prince hotels.
For the past 10 years, Queen Ka'ahumanu Center near Kahului Harbor has been running free shuttles for cruise ship passengers. So far this year, about 11,000 passengers have visited Maui's largest mall, according to Kathy Kameda, mall marketing manager.
Although the center's focus is Maui residents, merchants have enjoyed the business of passengers and crew, Kameda said.
"With all the different things that have happened and continue to happen, it's too early to judge the impact, but it wasn't a huge portion" of mall sales, she said. But, with the already-slowed tourism business, "any loss at this point is going to be felt."
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"There is certainly an impact," said Paul Kosasa, president of ABC Stores. "When the ships come in, sales go up. When there's no ship, we've lost that customer — not only us, Crazy Shirts, JJ's Broiler, Ho-nolua Surf Co. ..."
Cruise ship passengers who traveled between the major islands via the Patriot enjoyed not only the sensation of being at sea but also a full range of tourist activities that the Islands have to offer.
Robert Taylor, president and chief executive officer of Maui Divers, estimates American Classic cruise passengers accounted for 6 percent of his company's sales.
For others, it was much more. Jill Painter Christierson lost most of her income. She sold watercolors and hand-painted clothing three days a week at craft fairs aboard American Classic ships while in port at Kahului.
Though she's hoping to find other venues to display and sell her work, she recognizes the bigger loss for Hawai'i.
"It's just so sad," she said "There were so many good things about those ships. They tried to foster the aloha spirit, and it was a great vehicle to show off the state of Hawai'i."
That's the same sobering note sounded by tour and transportation firm Roberts Hawai'i, which had a multi-million dollar contract with American Classic.
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"They were selling Hawai'i on the Mainland," said Roberts spokeswoman Sam Shenkus. "That adds to the loss. They were one of our biggest supporters. It was a wonderful relationship."
The Patriot was the largest ship dedicated to cruising exclusively in Hawai'i. Local artists, food suppliers and a variety of other businesses says its presence and the aloha it helped export will be missed.
Many affected by American Classic's loss expect to recover with the arrival of the Norwegian Star, when it starts sailing year-round cruises between Hawai'i ports and Fanning Island.
Roberts, for instance recently agreed to transport Star passengers and baggage.
"The timing was kind of bittersweet," Shenkus said.
Troy Brown, assistant manager with Waldron Steamship, said the Star is expected to offset losses from American Classic's shutdown.
"In December," he said, "we're going to be looking at more cruise ship visitors than before (American Classic) went out of business."
Advertiser staff writers Lynda Arakawa and Christie Wilson contributed to this report.
