STAR-BULLETIN / JUNE 2004 Cruise ship business in the islands is expected to get a boost in 2005. Above, the cruise ship Pride of Aloha sits docked at the Port of Hilo on the Big Island.

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Catching the wave

Hawaii's cruise business is
expected to increase 30% to 50%
this year, according to a cruise agent

HAWAII'S cruise industry is riding high this wave season, the winter booking time when cruise lines net much of their annual reservations.

Based on bookings since December, business for the state's cruise industry is expected to grow as much as 30 percent to 50 percent in 2005, said Danny Ching, president of Non-Stop Travel, Norwegian Cruise Line's largest cruise agent in Hawaii.

"It's the best year we've had since 2001," Ching said. "Bookings have been coming in pretty heavy."

Norwegian has hired about 25 percent more employees to work bookings during the season, which usually lasts through March and represents about 35 percent of the company's annual business, said Robert Kritzman, NCL America's executive vice president and managing director.

While Hawaii has long been a stop on cruise ships bound for other destinations, the state's cruise industry took off last year when Norwegian Cruise Lines introduced Pride of Aloha, Hawaii's first home-ported vessel for interisland cruises since American Classic Voyages went out of business following 9/11.

Norwegian's fleet will expand this summer with the introduction of Pride of America, Hawaii's second U.S.-flagged ship. Pride of Hawaii, which will also be home-ported in Hawaii, joins the fleet in 2006.

Hawaii has become popular enough that the July arrival of Pride of America hasn't alleviated booking pressures, Ching said.

"NCL did the right thing by offering interisland cruises," he said. "Demand is high enough that they are getting $150 a night or so per customer -- that's way more than most cruise lines."

Since Norwegian launched its U.S.-flagged ships in Hawaii, the company has been plagued by bad weather, production delays, labor issues and a deluge of consumer complaints over amenities and services; yet bookings and interest in interisland cruises have remained high.

Complaints about Norwegian's Hawaii cruises have almost become a thing of the past, said Ching, who regularly surveys the Pride of Aloha passengers he has booked.

"Since October or November, we've gotten very few complaints," Ching said.

Norwegian has increased the number of employees on Pride of Aloha by about 100 to about 900 and plans to hire about 1,000 for Pride of America, Kritzman said.

The company plans to transfer about 30 percent of the employees currently sailing on Pride of Aloha to Pride of America so that the ship will have experienced personnel when the ship goes into service this summer, he said.

The state's cruise industry has been buoyed as demand has picked up on the mainland, he said. Rising interisland air fares have also prompted more kamaaina travelers to book cruises, Ching said.

"In recent surveys, 93 percent of our customers rated the cruise as good, very good or excellent," he said. "That's very similar to the performance of our international ships."

Although most cruise lines heavily discount tickets to fill boats rather than sail at low occupancy, steady demand has kept prices high in Hawaii, said Preston Lum, vice president of Cruise Holidays.

"We've seen that Hawaii pricing has not had to drop at all," Lum said. "That's good for the cruise lines as well as for the travel agents selling them."

After 9/11, many cruise lines dropped ticket prices to attract passengers and the industry suffered, he said.

Norwegian's continuing expansion, combined with the continued popularity of cruises, has brought more business to Hawaii-based travel agencies, Lum said.

"We're already turning down a lot of business," he said.

When fully implemented, Norwegian's planned three-ship U.S.-flagged fleet will bring $250 million in wages and salaries a year and 10,000 jobs to Hawaii, making Norwegian one of the top five employers in the state, the cruise line said.

The arrival of Pride of America will give Norwegian a second chance to make a good impression. If all goes well, Hawaii could become a cruise destination instead of just an exotic stop on an itinerary bound for somewhere else, Ching said.

"Hawaii has always been a place that people want to go and if you can offer them a chance to see the islands all at once for an affordable price, they'll take it," Ching said.

Norwegian sees Hawaii as one of the strongest domestic markets, Kritzman said.

"For us, it's an ideal location for cruising much like Alaska, where the cruise business has grown tremendously in a relatively short period of time," he said.