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Hawaii


Cruise ship moving from Hawaii to Europe

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Feb 04, 2008

The Pride of Hawai'i ends its weekly interisland cruise service today and begins its journey for a new assignment in Europe, leaving in its wake lost economic opportunity that could amount to as much as $542 million a year, according to a state analysis.

The Pride of Hawai'i — with full passenger count of 2,466 — could account for nearly 140,000 visitors in a year, state economist Pearl Imada Iboshi said.

"Given the average length of stay and the per-person per-day spending in 2006, if none of those visitors come as a result of the leaving of the Pride of Hawai'i, the total spending loss of these visitors would be $368.8 million," Iboshi said. "Using multipliers to look at the impact on the economy, it could possibly mean a loss of $542 million in output and 5,000 jobs," she said.

Hilo, Hawai'i, tour operator Tony DeLellis will feel the loss. He said his small business has grown along with NCL America, and will feel the impact. "It's a ship that was guaranteed to come one day a week. That's 2,200 guests that we'll miss each week," he said.

He owns a tour company called KapohoKine Adventures that specializes in small-group luxury tours — in sport utility vehicles and vans — to off-the-beaten path locations. The company employs 11 people and runs a fleet of nine; it started in 2004 with just one vehicle.

HILO COMMUNITY AT LOSS

While his business is directly affected by any big shift in visitors, he said the entire Hilo community feels some impact from the ship visitors. "It's just more broad-based than a lot of people think," DeLellis said, because his company in turn purchases food and gas, pays for car repairs and so on. His employees spend their money in the community on their families, buying necessities, going to the movies, the mall, etc.

Last year the number of cruise ship passengers visiting Hawai'i grew 20.6 percent to 501,698, according to the state Department of Business, Economic Development and Tourism. That figure includes passengers who flew to the state to board cruise ships or came by cruise ships visiting Hawai'i. In 2007 there were 77 cruise ship arrivals, compared to 64 in 2006.

NCL CITED FINANCES

NCL America announced last year it would pull the ship from Hawai'i in the face of mounting financial losses. Last summer, NCL Corp. said continued weakness in ticket pricing for its Hawai'i cruise operations contributed to the company's second quarter $24.6 million loss.

The Pride of Hawai'i will leave today and sail a five-day cruise to Los Angeles, arriving on Saturday, said NCL spokeswoman AnneMarie Mathews. The ship will enter a six-day wet dock in Los Angeles, where the vessel will be reflagged and renamed Norwegian Jade and the colorful Hawaiian-themed hull artwork will be painted over. NCL's two other U.S.-flagged ships, the Pride of Aloha and the Pride of America, will continue to operate in Hawaiian waters. The company said it would re-evaluate its Hawai'i operations this year.

State tourism liaison Marsha Wienert predicted "a huge impact on the economy overall as well as many different types of activities" from the departure.

However, under the best-case scenario "it is our hope that the two existing NCL ships will absorb those passengers," she said.

"People see the cruise ships come and go and don't really think about the benefit," said Hilo's DeLellis. He believes that the state and Hilo should nurture the cruise industry.

He said ship passengers go on tours, don't rent cars but do spend money, and usually spend only a few hours in each port. "They're very low-impact," he said.

KAUA'I LU'AU WILL HURT

Kaua'i's Kilohana Plantation has enjoyed a huge weekly influx of NCL passengers, according to partner Fred Atkins.

When the Pride of Hawai'i arrived every Saturday night on the Garden Island, he said between 650 to 950 passengers sat down for a lu'au at Kilohana, which would mean jobs for more than 100 people to handle the crowd. "Our whole budget is 33 percent less now," Atkins said.

Add in the other companies that get direct business from the visiting ships. "It's a major impact," Atkins said. "It's an industry that has built up tremendously on Kaua'i in the last eight years," he said.

STUDY '5 YEARS LATE'

Atkins believes the state needs to do more to help the industry and questions why the Hawai'i Tourism Authority waited to commission a cruise-ship industry study, one that isn't due to be complete until October even as NCL evaluates its commitment here.

"It's about five years late," Atkins said. "I hope it's not too late."

He said that NCL has proven a good corporate citizen, investing money in the community. At Kilohana alone, he said the company "spent $3 million here to build a pavilion," one that's used by lu'au guests but also by the community.

While some residents complain about the sudden influx of passengers from the big ships, Atkins said he believes the industry seems to him to have less long-term impact than other industries or even other land-based visitors.

"Only 10 percent of them rent cars," he said.

He said NCL should be supported in its effort to pay higher wages to American-based ships. Foreign-flagged vessels pay lower wages to their crews and can operate more cheaply.

Atkins looks forward to more business from the other NCL ships and remains cautious about the future. "If they don't turn the company around by the end of the year, they're going to be gone," he said.

Spokeswoman Mathews said an estimated 940 Pride of Hawai'i crew members "are part of the NCL family and have been offered positions on other NCL or NCLA ships including Pride of America, Pride of Aloha, the reflagged ship and the balance of the NCL international fleet." But she did not provide the number of employees who have transferred within the company or left.

LOSS OVERESTIMATED?

Linda Zabolski is president of Destination Kona Coast, a Big Island program paid for by Hawai'i Tourism Authority to welcome cruise visitors. She also owns Captain Zodiac tours, taking visitors on snorkeling, whale-watching and other tours.

Zabolski said the ships make a huge difference to tourism: "On a non-ship day the town of Kailua, Kona, is practically a ghost town.

But she also thinks it's important to keep in perspective that the cruise industry was thriving before NCL added a third ship — and that NCL still has two more ships.

"It's sad to see the Pride of Hawai'i go but they've only been here a year-and-a-half and things were pretty damn good before they got here," Zabolski said. "It's not the doom and gloom that's being projected."

A BRIGHT SPOT IN MARKET

Cruise ship specialist Tim Deegan publishes Hawaiian Shores magazine, a free guidebook for Hawai'i cruise visitors that comes out twice a year with a distribution of about 200,000.

Deegan believes it's important for the state to support cruise ships that are based in America and those that fly foreign flags and come here on their way to or from another destination.

The NCL ships come more often, he said, while the foreign flag ships "spend less time but spend more money."

He said cruise ships are a special bright spot in the otherwise cooling Hawai'i tourism market because they attract new business for the state's No. 1 industry.

"Cruisers are cruisers," Deegan said. "You're not deciding between a Hawai'i land-based vacation or a cruise. You're deciding between Mexico, the Caribbean or Hawai'i."

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Cruise ship moving from Hawaii to Europe
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