FL MORRIS / FMORRIS@STARBULLETIN.COM Despite the bankruptcy of American Classic Voyages, operator of the ms Patriot, Hawaii's cruise industry will rebound, observers say, as new ships pick up the slack.

Isle cruise industry
still alive

---

By Bruce Dunford
Associated Press

Despite September's financial sinking of Hawaii's only interisland cruise ship company and its plan to add two big ships, Hawaii's ocean cruise industry is reported to be alive, well and growing.

"Currently, Hawaii receives about 2.6 percent of North American cruise industry business," John Hansen, president of the nine-member North West CruiseShip Association, said yesterday as he briefed the Hawaii Tourism Authority on the industry's future in the islands.

"But with the increasing demand for cruise vacations, it is expected that this percentage will grow significantly in the next five years," he said.

The cruise ships SS Independence and the ms Patriot stopped their seven-day cruises around the islands as Miami-based American Classic Voyages Inc. declared bankruptcy, citing losses following the Sept. 11 terrorist attacks.

The company's $1 billion contract with Northrop Grumman to build two 1,900-passenger ships in Mississippi for the Hawaii market was canceled.

A quarter-million passengers are expected to visit Hawaii for cruises next year, growing to 275,000 by 2004, according to Hansen. That's up from 160,000 this year.

The growth is primarily due to the arrival this week of the 2,200-passenger Norwegian Star to be home-ported in Honolulu and its sister ship the Norwegian Wind which will spend six months a year in the islands.

The Norwegian Star is scheduled to arrive in Honolulu Saturday on a trip from Mexico to begin its cruise schedule Sunday, offering seven-day voyages. It will spend four days in Hawaii before making a three-day trip to Fanning Island, 600 miles to the south in the Republic of Kiribati, to satisfy federal restrictions.

The Jones Act prohibits internationally flagged ships from carrying passengers solely between U.S. ports.

Also expected to spend winter months in Hawaiian waters is Holland America's Statendam which now operates Alaskan cruises, Hansen said.

The number of cruise ships making port calls in Hawaii has grown from 36 in 1990 to 237 this year and is expected to reach 638 by 2004, he said.

The cruise ships, whose passengers spend an average $83 a day on shore, are expected to pump more than $90 million into Hawaii's economy next year. Meanwhile, the cruise lines will spend $9 million in marketing Hawaii tourism, Hansen said.

While the sudden downturn in tourism after Sept. 11 is blamed for the failure of American Classic Voyages, Hansen said the attacks may be stimulating the nation's cruise industry.

"The reason is that a lot of cruise lines have repositioned ships back into the North American market and from the customer's standpoint ... traveling to Hawaii is not seen to be traveling a long distance outside the nation. It's a safe and secure place to come to," Hansen said.

Hawaii's berthing and mooring facilities are adequate to meet the cruise ship needs, but require some improvements that will be paid through port fees charged to the cruise companies, he said.

"These are not major redevelopments," Hansen said. "They are improvements to existing facilities like extending a dock so that you could instead of being able to tie up one ship you could tie up two ships."

State Transportation Director Brian Minaai said his department is working with Hansen's association on the needed improvements, especially at Hilo Harbor.

Tourism authority Chairman Roy Tokujo expressed concern about the landing of passengers by boat off Lahaina on Maui, saying it needs to be made as easy as possible to keep the passengers happy. He noted the new ships will be much larger than American Classic Voyages ships.