"It's been constantly growing," said Mendy Dant, company vice president. "Certain things end up taking a season away from you — like the war or an airlines going on strike — but for the most part, each year continues to grow a little more and we get busier."

Fair Wind Cruises is one of more than 350 companies involved in Hawai'i's tour-boat industry, which generated about $183.5 million in revenues in 2003, according to a recent survey conducted by economic consultant Mike Markrich.

More than 480 tour boats and fishing charter boats are contributing to the growth of the industry statewide. These companies employ more than 2,000 people. Two decades ago there were only 112 boats generating generating about $50 million in revenue.

"This is a healthy industry that employs a lot of people," said Markrich, who also conducted the survey 20 years ago. "The industry has grown because the principal attraction of Hawai'i, to many people, is the ocean experience."

According to the survey, the tour-boat industry carried more than 2.7 million people, or about 40 percent of the number of visitors to Hawai'i in 2003. Maui had the largest share of passengers — about 1.1 million — due largely to its distinct destinations, such as Molokini Islet off Maui, Lana'i and Moloka'i. Maui also leads the state in whale-watching. O'ahu was second with more than 850,000 passengers that year, many of them going on large dinner cruises, scuba-diving trips and beach catamaran rides.

Outfitters Kaua'i illustrates how fast this segment of Hawai'i's No. 1 industry has grown. Outfitters Kaua'i opened in Po'ipu in 1988 with just six kayaks and two employees. Now the company has grown to 40 staffers and about 125 kayaks, adding bike rentals and tours, hiking excursions and other outdoor adventures to its menu of offerings.

In the past 10 years, passenger counts have grown by 200 percent, said president Rick Haviland. More than 90 percent of his customers are tourists.

The company has had to adapt to changing customer needs and desires by expanding its offerings to include activities such as downhill bike tours and hayrides on farm wagons.

"All business is driven by the marketplace," Haviland said. "But more than that, we just keep dreaming up fun things to do, and we have a lot of fun creating new programs. It seems like other people share our interest and tastes because these new programs seem to be doing pretty well."

In addition, Haviland had to add programs that were geared to different ages and abilities.

"One of our goals has been to create adventures suitable for all different kinds of people," he said. "You can be an elite athlete or a couch potato and you'll have a great time on our tours."

Being flexible and innovative has been one reason the industry has grown, Markrich said

"There's been a change in what people want to do," he said. "We have a new kind of visitor ... The market has changed and matured, and these entrepreneurs have adapted to that."

This has been particularly true for O'ahu's dinner cruises, Markrich said.

"What's happened over time is these boats have become bigger, fancier and more expensive," Markrich said. "These boats now compete with high-end restaurants in Waikiki, which would have been unthinkable 20 years ago ... Quality and cost have gone way, way up."

The success of Hawai'i's tour-boat industry over the past 30 years is in part because of a government policy that benefited tour-boat companies already operating, Markrich said.

The state limits the number of tour-boat permits with access to day-use mooring at popular tourist destinations such as Kealakekua Bay and Molokini Crater, while outlawing anchoring to protect the state's coral reefs.

Tour-boat companies with day-use mooring permits and slip rights are automatically renewed as long as applications are in order and rules and regulations are followed.

A tour company wanting to join the mix has to put its name on a waiting list or buy out someone who has a permit.

The state Department of Land and Natural Resources, which oversees permits for day-use mooring, is considering changing the process to allow new businesses to enter the ocean tourism industry. DLNR may opt for a lottery system to decide who gets the mooring permits.

DLNR is working with the state attorney general's office on the new rules and will make a decision on the process soon, said director Peter Young. Keeping the process the same is a possibility as well.

"We're looking at the process to make sure whatever we do, we feel is the right way to do it," Young said.

Those operating tour boats say changing the process, especially if it becomes a lottery system, would take away their stability and ultimately harm the industry's growth and sustainability.

"We've built up a reputation and that (could be) gone," Dant of Fair Wind Cruises said. "If (DLNR) makes changes and does away with companies that have been in business for all these years, they'll be such an outcry."

On the other hand, companies that have been unable to get a permit support a change in the process that would allow them a shot at starting a commercial tour-boat operation.