NCL learns from Aloha launch

By Lynda Arakawa
Advertiser Staff Writer

NCL America is getting ready to begin interisland cruises on its second U.S.-flagged vessel, Pride of America, next month, but not without some lessons learned.

Robert Kritzman, executive vice president and managing director of Hawai'i operations for NCL America, shows a model of Pride of Aloha. Gregory Yamamoto • The Honolulu Advertiser

NCL America has since stepped up its training and recruitment, and the Pride of America's staff will include employees who have already worked and gained experience aboard the Pride of Aloha, said Robert Kritzman, executive vice president and managing director of Hawai'i operations for NCL America, a subsidiary of Norwegian Cruise Lines.

In all, NCL officials say they feel better about this ship's launch.

Last year, "I think we were concerned because of the uncertainty," Kritzman said. "I think we also got a very late start in the recruitment and training efforts. But having known what we did during that period and when we did run into some service problems how quickly we turned it around, and then seeing where we are today with the number of crew, the training program that we have, the quality of the crew and the experience that we have, I'm actually quite confident.

"I certainly feel much better."

The Pride of America will be officially handed over to NCL today in Bremerhaven, Germany, before heading to New York for a christening ceremony. Following will be a cruise to Miami, during which the syndicated morning show, "Live with Regis and Kelly," will be broadcast aboard the ship.

The vessel will make a cruise to the West Coast before arriving in Hilo, July 18.

Since the Pride of Aloha began its interisland cruises last summer, NCL's shore-based staff in Hawai'i has grown from 30 to 90 full-time employees plus about 20 part-timers. The number of crew members has more than doubled, starting with about 850 on the Pride of Aloha to a total of 2,200 employees for two ships. There are also about 560 more people either in training or about to be trained, Kritzman said.

About 40 percent of the crew members are from Hawai'i, the largest group from any state or territory. The rest are from California, Texas, Florida, Guam, Washington and elsewhere. Monthly salaries for waiters are about $3,000 while stateroom stewards make about $2,700.

But the overstaffing comes with the expectation that there will be some turnover of employees. Kritzman said the annualized turnover rate for the Pride of Aloha was more than 50 percent during the first couple of months of service. Now it's about 30 percent to 40 percent, he said.

"The attrition numbers have come down a lot but as with anything when you have that many new employees all at once — and basically we've added about 1,000 employees to the system in the last couple months — you're going to have higher turnover than you would have on a steady state basis," he said. "And so that's one of the reasons for having the additional numbers in process."

About a third of the Pride of Aloha's crew have been moved to the Pride of America so the new ship would have a base of experienced employees, Kritzman said. It probably won't be until after NCL's third U.S.-flagged ship, the Pride of Hawaii, arrives next year that NCL will know what the long-term turnover rate will be, he said.

Kritzman said the turnover rate isn't unusual for a large, startup hospitality business. But it represents a challenge in launching a U.S.-flagged ship, which must employ U.S. workers and follow U.S. labor laws.

The employee turnover at the company's international ships are "very, very low," he said.

"People just don't leave those jobs. They get paid very well compared to what they'd make at home. Relatively speaking, they get paid extremely well."

With a U.S.-flagged ship "we're competing with the U.S. workforce and U.S. pay scales (and) work standards."

Recruiting and training employees is a key issue for NCL, which has partly blamed a lack of experience among crew members for the Pride of Aloha's growing pains.

Passenger complaints about the Pride of Aloha began escalating in August last year, about a month after the ship began interisland cruises. Complaints largely centered on cleanliness, quality of food and long waits for meals.

"We underestimated the task from a recruitment and training perspective," Kritzman said.

The situation prompted NCL to apologize to passengers, issue $35 refunds and bring in a senior management team from its headquarters in Miami.

The company also expanded its training program from one week to three and stepped up its recruitment efforts. It opened a satellite recruitment office in Guam and hired contract recruiters to cover the Seattle-Tacoma area, Houston, New Orleans, Arizona and Southern California.

Kritzman said customer ratings by Pride of Aloha passengers have improved. Overall results from passenger surveys rate the cruise ship "a little above 'very good,' " he said.

He also said business for the Pride of Aloha and the Pride of America is strong, with both ships being more than 80 percent booked for the third quarter.

Bookings were somewhat slow for the first few cruises for the Pride of America, which Kritzman attributed to concern in the market that the cruise ship might go through the same type of problems as the Pride of Aloha.

"But that's picked up and the America will be running full when she enters service," he said.

"The revenue numbers have been good," he said. "We don't discuss specifics, but we're pleased. ... On a steady state business, when you take out startup expenses, it's basically according to plan. The startup costs have been a little higher than we anticipated, but that's really just an investment.

"The Pride of Aloha is now performing and rated by our own guests as between very good and excellent," he said. "And (now) that we have both the experience and the opportunity to draw on the Pride of Aloha's crew to start off with a base of experienced crew on the Pride of America, ... we feel quite comfortable."

Reach Lynda Arakawa at 535-2470 or larakawa@honoluluadvertiser.com.