Posted on: Sunday, July 17,
2005
New cruise liner lifts economic prospects
By Lynda Arakawa
Advertiser Staff Writer
Tony DeLellis plans to hire up to three more drivers and
buy more SUVs at his small Hilo tour company as he ramps up for a spike
in customers from the Pride of America cruise ship.
The 2,144-passenger ship arrives in Hawai'i tomorrow to
join the Pride of Aloha as the second U.S.-flagged vessel dedicated to
interisland tours.
DeLellis, working now with a staff of four, gets about
90 percent of his business from cruise ships, which he said have been
" awesome for us and for anyone who has a business ... because you have
a
captive audience of 2,000 people with nothing to do and some bucks in
their pocket."
Norwegian Cruise Line will eventually operate three
U.S.-flagged ships in the state when the Pride of Hawaii joins the NCL
America fleet next year.
The three ships will add more than 10,000 jobs and $270
million in wages and salaries a year to the state's economy by 2007,
according to a 2003 PriceWaterhouse Coopers report commissioned by NCL.
About 3,000 of those jobs will be aboard NCL's ships and the rest will
be on shore, including jobs at small businesses such as DeLellis' tour
company.
" The trickle-down effect has been great, especially for
a port like Hilo, where there's not necessarily that much in the way of
tourism," said DeLellis, 38, a partner in KapohoKine Adventures. "We've
been booked solid every time the ships come into port."
State economists estimated that cruise passengers aboard
the Pride of Aloha and Pride of America will spend an average of $188.46
per person daily. Of course, most of that goes to NCL, but onshore
companies get more than a third, or an estimated $70.96, of the average
daily spending. Average daily spending now among all tourists is $164
per person, according to the state.
NCL officials are quick to add that their company buys
produce and other goods from local farmers and businesses, including
sugar, pineapple, vegetables and ice cream, which further supports the
state's economy.
Norwegian also operates the foreign-flagged Norwegian
Wind, which runs 10- and 11-day cruises that include a stop at Fanning
Island in the Republic of Kiribati.
Doug Smith, who owns Pony Express Tours on Maui with his
wife, Kathryn, said cruise ship customers become particularly valuable
during the "shoulder seasons" when tourism slows.
" This (summer) being the busi-est time of the year, if
all of a sudden the cruise ships just stopped coming in, we would still
fill up all these horses," said Doug Smith, who offers horseback riding
tours. "But come September, October, when everything begins to slow down
a little bit, they come in real handy. ... There are times when you're
looking at your booking for the week and you think, 'Oh, thank God for
NCL.' "
Cruise ship passengers make up about 15 percent of Pony
Express Tours' revenue, he said. And he's looking forward to the arrival
of the Pride of America.
" It will be fun," he said. "We've got another block that
we've given them, so hopefully they'll be able to fill it."
While some local businesses welcome another cruise ship,
others have concerns about the growth of the cruise industry here.
Environmental groups have called for the state to do
more to protect Hawai'i waters and regulate wastewater discharges. The
industry has a voluntary agreement with the state to refrain from
dumping wastewater and chemicals in coastal waters, but environmental
advocates say the agreement and a new law passed this year to regulate
the industry do not go far enough.
A couple of years ago, a group of Moloka'i residents
protested ship stops at their island. Some state residents, particularly
on Maui, also question whether their island's infrastructure can handle
the tourists coming off the ships.
In addition to questions about environmental impacts,
" the bigger concern we hear from the community is just overrunning local
spots - they're not used to seeing a big cruise ship in the harbor - and
that it's just changing the character of some of the communities," said
Jeff Mikulina, director of the Hawai'i chapter of the Sierra Club.
" We have to look at it in the context of tourism growth
altogether and how much the Islands can sustain," he said. "Tourism
will
always be part of our economy and we can do it in a way that it's a
healthy mix. But we can't just indiscriminately increase the number of
bodies in Hawai'i and hope everything will work out OK."
Critics also question how much money from the cruise
ships actually reaches local communities.
Robert Kritzman, executive vice president and managing
director of Hawai'i operations for NCL America, defended the cruise
industry, saying it brings many economic benefits with relatively small
negative impact on the community.
" You can't have any type of economic impact without some
impact, but we think that this is a very low-impact form of tourism on a
relative basis," he said.
Kritzman said the addition of Pride of America will mean
a ship will be in port on more days, rather than having more ships in a
single port. He said the ships are self-sufficient, recycle goods and
operate their own incinerators.
Some see the growth of the cruise industry as a valuable
impetus for Hawai'i's No. 1 industry.
Atlantis Adventures - which operates submarine and ocean
tours on O'ahu, the Big Island and Maui - has seen about a 10 percent
increase in business from the Pride of Aloha, said president and chief
executive officer Ron Williams. Cruise visitors still make up a small
share of the company's business, and he said it's still unclear how much
of a difference the Pride of America will make.
" It's exciting though," Williams said. "It's more
opportunities for businesses to continue to grow, so that's a good
thing."
Williams, who is head of the Activities and Attractions
Association of Hawaii, said members have had mixed results from the
Pride of Aloha.
" The people who are getting the business are really
happy, and then there's probably some who wish they had more of it."
The Pride of America has been a long time coming for
NCL. The vessel was originally scheduled to start cruises in July last
year, but construction was delayed after the ship was damaged in its
shipyard in Germany during a January 2004 storm. NCL replaced it with
the Pride of Aloha, which was reflagged after previously running as the
Norwegian Sky under a Bahamian flag.
The U.S.-flagged ships must employ U.S. workers and
follow U.S. labor laws. Without the U.S. flag, cruise ships serving
Hawai'i have to add a stop in a foreign port.
NCL officials have said that about 40 percent of the
crew members on the Pride of Aloha and Pride of America are from
Hawai'i, the largest group from any state or territory.
NCL officials say they've taken steps - including more
crew training and recruitment - to avoid the growing pains that the
Pride of Aloha endured last year. Passenger complaints about the Pride
of Aloha began escalating in August last year, about a month after the
ship started its interisland cruises. Complaints mostly centered on
cleanliness, quality of food, and long waits for meals.
NCL apologized to passengers, issued $35 refunds, and
brought in a senior management team from its headquarters in Miami. The
problems were partly attributed to a lack of experience among crew
members.
Kritzman said that since then, customer ratings have
improved to an average of "between 'very good' and 'excellent.' "
" Having known what we did during that period and when we
did run into some service problems (and) how quickly we turned it
around, and then seeing where we are today with the number of crew, the
training program that we have, the quality of the crew and the
experience that we have, I'm actually quite confident," Kritzman said
last month, referring to the Pride of America. "I certainly feel much
better."
Many local tour businesses are also feeling better.
Doug Arnott, who owns Arnott's Lodge and Hiking
Adventures on the Big Island, expects a 50 percent growth in business
from the Pride of America. Arnott said that without business from the
Wind and the Pride of Aloha, his company would need only about four
vans. Now he's about to get his 17th and is looking into getting a
larger vehicle.
" Money flows out to our drivers ... it flows out to gas
stations, to repair people, to people who paint our vans when they get
banged up, we have people who wash vans," Arnott said. "We just built
rock walls that we never would have built. It's a never-ending stream of
money flowing into the community."
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