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The Honolulu Advertiser
Posted on: Friday, September 2, 2005

Cruise-ship industry booming

By Jaymes Song
Associated Press

Passengers from Norwegian Cruise Line's Pride of America come ashore at Kailua Pier in Kailua, Kona, on the Big Island. Hawai'i has become a "huge market" for cruise-ship companies like Norwegian.

MICHAEL DARDEN | Associated Press

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Hawaii's cruise-ship industry floundered in the days following the Sept. 11, 2001, terrorist attacks, as the state's sole interisland cruise operator was flooded with cancellations while bookings fell by 50 percent.

American Classic Voyages Inc. filed for bankruptcy protection just 38 days after the attack and shut down its Hawai'i operations, scuttling plans for two new ships.

Since then, however, the Hawai'i cruise ship industry has made an aggressive recovery. It has seen unprecedented growth, led by Norwegian Cruise Line and fueled by vacation-starved baby boomers.

What used to be a seasonal business with a few ships making calls here, is now a year-round mainstay with Hawai'i's ports bustling with activity.

"For us, it's a huge market," said Robert Kritzman, NCL's executive vice president and managing director of Hawai'i operations. "Very few people ha've cruised Hawai'i. There's an untapped market still there and Hawai'i is a phenomenal place to come through."

Norwegian, which operates the U.S. subsidiary NCL America, is betting big on Hawai'i, spending $1.4 billion on three luxury liners to serve the Islands. The Miami-based company estimates it will own about 85 percent of the cruise-ship market here by 2007.

The 1,900-passenger Pride of Aloha was the first, introduced last summer.

Formerly the Norwegian Sky, it was redesigned with a Hawai'i theme and reflagged to a U.S. vessel, allowing it to carry passengers solely between U.S. ports.

The new 2,100-passenger Pride of America made its debut in June as the largest U.S.-flagged cruise ship ever.

By the time its sister ship, the Pride of Hawaii, is built and arrives next summer, the company will have three year-round lavish cruise ships — as well as a seasonal foreign-flagged vessel — carrying an estimated 8,000 passengers per week.

"Being able to welcome an additional 8,000 people on a weekly basis will allow us to continue to grow our economy because we are almost at our capacity where our land-based accommodations are concerned," said Marsha Weinert, the state's tourism liaison.

In July, Hawai'i hosted 22,725 cruise-ship passengers, up 57 percent from July 2004, according to the latest state figures.

Hawai'i had 151,164 cruise passengers this year through July, up 34.6 percent from the first seven months of last year. About two-thirds of the visitors are extending their vacations and staying a couple days in hotels or time-share units.

John Hansen, president of the North West Cruiseship Association, projects the number of cruise-ship passengers in Hawai'i will exceed 400,000 next year, up from about a peak of 150,000 annually before the 2001 terrorist attacks.

It's part of a worldwide trend.

In 2004, nearly 10.5 million people took a vacation cruise, an increase of nearly 40 percent from 2001.

Five years ago there were just four key cruise ports: Los Angeles, Miami, Fort Lauderdale, Fla., and Vancouver, British Columbia. Today, there are more than 20 key homeports that have emerged including Honolulu.