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The Honolulu Advertiser
Posted on: Friday, December 19, 2008

Isles' cruise-industry growth may lag U.S.

By Robbie Dingeman
Advertiser Staff Writer

Hawai'i's cruise industry is projected to grow at a slower pace than the overall North American cruise market over the next decade, according to a study released yesterday.

The study, paid for by the Hawai'i Tourism Authority and the state Department of Transportation, also concluded that the economic benefits of the industry far outweigh any direct costs to the state in terms of its impact on things such as air quality, harbors, airports and state parks.

The study concluded that that direct benefits of cruise tourism amount to $475.4 million a year, while the costs to the state are less than $3.3 million a year.

The study — which cost $896,000 — was made public yesterday at a meeting of the Hawai'i Tourism Authority's strategic planning committee.

It was commissioned after the state's cruise industry doubled in size from 2001 to 2005. It was designed to assess the cumulative impact and benefits of the cruise industry from 2007 through 2018.

While the state has welcomed the boost in tourism and economic benefits, some have questioned what the various effects of the industry have been, including environmental concerns about water and air quality related to discharges from the big vessels.

The report will be presented to the Legislature.

The study predicts that U.S.-flagged cruises will remain at a low level following the departure of to NCL America ships from the Hawai'i market earlier this year.

There also will be no significant increase in foreign-flag ships in the short-term. The report projected there will be long-term growth that is lower than the North American cruise market average.

That translates into a projection of a net average annual growth rate of Hawai'i cruise passenger volume of just 1.29 percent over the 2009-2018 period.

Lloyd Unebasami, president and chief executive officer of the Hawai'i Tourism Authority, said the committee will meet again to discuss the report in more detail in response to questions from members.

A group of 30 leaders from across the Islands in business, government, and organizations provided input, oversaw study approaches and reviewed findings.

The study's authors conducted more than 275 interviews with cruise lines, ports staff, service providers, tourism businesses, recreational harbor users, environmental groups, government agencies and others during the yearlong study.

The study also concluded that the Islands do not benefit equally from the cruise industry: Honolulu and Hawai'i County show the largest net benefit from the cruise industry under all scenarios examined, whereas Kaua'i County and especially Maui County show different levels of benefit under different assumptions.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com.