What Does NCL's One-Ship Departure Mean for Hawaii?

April 25, 2007

NCL Renames Pride of Hawaii

NCL America to Re-Flag Pride of Hawaii

NCL Withdraws Pride of Hawaii from ... Hawaii

Like most business moves, Norwegian Cruise Line's decision to pull Pride of Hawaii from Hawaii and send it to Europe renamed Norwegian Jade comes down to the almighty dollar. The U.S.-flagged brand NCL America comprised of three ships -- Pride of Aloha, Pride of America and Pride of Hawaii -- simply isn't profitable. As it turns out, deploying three contemporary ships in the same region offering the same itineraries didn't spark demand as hoped. Instead, it forced NCL to lower prices. Now the line is scrambling to come up with a new strategy.

And if the idea of offering a better budget alternative to Hawaii's fairly pricey land-based vacations seemed sound in philosophy, the oversaturation (which is not limited to NCL's own ships) has resulted in stupendous deep discounts not seen this side of the Caribbean. In Cruise Critic's Bargains section for example, a seven-night cruise onboard Pride of Aloha is advertised from just $549. Longer sailings (15 nights) on Princess and Holland America start from just $1,299 and $1,499 respectively.

But get this: Jeffrey Anderson, the vice president of marketing for America's Vacation Center, tells us the prices won't stay low for long. "With Pride of Hawaii leaving the Hawaiian cruise market, it's only natural that prices will go up because there will still be a high demand, only a lower supply. There's no question that Hawaii will continue to be one of the hottest cruise destinations. The bottom line is that vacationers shouldn't wait to buy because prices may never be this low again."

We also wondered: Beyond pricing, what does the pullout of NCL's Pride of Hawaii in February 2008 mean for the islands? The loss of the ship -- and 94,544 annual cruisers -- will cost the islands up to $200 million in visitor spending in 2008, provided no other line fills the berths left open (at this point, no cruise lines have made itinerary changes in response to Pride of Hawaii's departure), according to Honolulu's Star Bulletin. The pullout also threatens some 200 activities and attractions that NCL America does direct business (Aloha Kauai Tours' Michael Hopkins told the Star Bulletin that NCL America provides about 70 percent of his total business), as well as the company's food and service suppliers.

However, Hawaii is a survivor when it comes to tourism's ups and downs, and officials there say that NCL's removal of one ship will hurt -- but not cripple. The islands have been through worse before; in 2001, NCL America's U.S.-flagged predecessor American Classic Voyages, which operated two ships, went completely bankrupt. In this case, NCL America still has two U.S.-flagged vessels in the region year-round -- Pride of Aloha and Pride of America -- in addition to occasional Norwegian Sun sailings.

Officials are also hopeful that after Pride of Hawaii departs in February 2008, the growing number of foreign-flagged cruise ships entering the market from the West Coast will beef up business. Other cruise lines that visit Hawaii seasonally will continue to offer similar itineraries, mostly between 10 and 15 nights. These include Carnival, Celebrity, Holland America, Royal Caribbean, Princess and Silversea.

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--by Melissa Baldwin, Senior Editor