Full Speed Ahead

With service complaints left in its wake, Norwegian Cruise Line America brings a third U.S.-flagged and –staffed ship into Hawaiian waters

photo: Jimmy Forrest

When the Pride of Hawaii pulls into Nawiliwili Harbor later this month, Norwegian Cruise Lines America will have three U.S.-flagged and -crewed ships plying Island waters year round. This is in addition to the company's two foreign-flagged vessels, which visit Hawaii eight months out of the year. Altogether, NCL America's Hawaiian armada will represent 30 percent of the company's fleet, a $1.4 billion investment in less than five years. In 2004, NCL America had 15 employees in Hawaii. This year, it will employ more than 4,000.

For someone who has overseen so much growth, so fast, Robert Kritzman, NCL America's executive vice president and managing director of Hawaii operations, seems pretty relaxed. He has good reason to be optimistic. Nationally, the cruise-ship industry is predicting a strong 2006, with passenger counts rising by about a half a million. In Hawaii, Kritzman expects stronger growth. From his corner office overlooking Honolulu Harbor, he is reviewing sales records for his ships. For the second quarter, they are nearly booked solid and for the third quarter they are almost half full, good numbers for this time of year. Here's what Kritzman had to say about NCL Hawaii's efforts to right the cruise-line after having a rough start in Hawaiian waters and its plans for the future.

HB: The Pride of Aloha had a tough first voyage, with complaints about long waits for food and substandard service. What measures have you taken to ensure that it won't happen again on the Pride of Hawaii?
RK: The Pride of Aloha had some service issues early on, but, to put it into perspective, it was a startup operation. Normally, we can draw on some of the crew from our existing ships, but we couldn't do it in the case of the Pride of Aloha, since it was a U.S.-flagged ship and it needed a U.S. labor force and there was none at the time. We had to hire 1,000 crewmembers, 98 percent of whom were completely inexperienced, and we ran into some service issues right off. We are actually quite pleased with how quickly we were able to resolve the problems. Last summer, we brought out the Pride of America successfully. Some of the measures that we took included expanding our training program. So now our staff take three- or four-week programs before they step on board. They train at Piney Point, where our union (The Seafarers' International Union) has a school and training facilities. The union handles the safety program, and we do everything else: service training, hospitality training with a Native Hawaiian module, and specific job training. Right now, 95 percent of our passengers rate our service either good, very good or excellent.

HB: Any plans to bring the training center to Hawaii?
RK: We went to Maryland, because the union had the facilities in place, and we could get up and running quickly. We do intend to bring that training to Hawaii once our third ship is in place. We are hoping by sometime early next year, and we are talking to the community colleges here.

HB: When your service issues with the Pride of Aloha became very public, some observers felt that your struggles were an example of how American workers can't compete with foreign workers for service-sector jobs today. Do Americans have a tougher time with these types of jobs?
RK: We don't feel that way at all. This is the world's largest economy, and we didn't get here by having a bad work ethic. We have a lot of great people with great attitudes working on our ships. There are advantages to having an American work force. They are more outgoing. And since language is not a barrier, there is a lot more communication between staff and passengers. And there are a lot of simple things like if there is a Red Sox and Yankees game on TV, our bartender can carry on a conversation.

HB: Hawaii has probably the tightest labor market in the country. Small-business people are having a hard time staffing their stores or restaurants, how were you able to fill up an entire ship?
RK: We have 965 crewmembers on board the Pride of Hawaii. We wanted to hire here, but it is so tight that we have to go to the Mainland. We also hired from Guam, but we had to go all over. Right now, about 25 percent to 30 percent of our workers are from Hawaii.

>> FAST FACT:

Of the 573,412 visitors who came in February 2006, 67,061 visitors either flew to the state to board Hawaii home-ported cruise ships or arrived on foreign cruise ships visiting the islands, up 57.3 percent from last February. Cruise visitor days climbed 73.6 percent over February 2005.

Source: Department of Business, Economic Development and Tourism - Research and Economic Analysis Division

HB: With the Pride of Hawaii, you'll have five ships in Hawaii waters. Is this enough to meet the market's needs? Is it too much at this time?
RK: Hawaii will have a good year and it is growing much, much faster than the rest of the industry as a whole. By putting this ship here, we will grow by 30 percent. We obviously think that Hawaii has tremendous potential, since we'll have put in $1.4 billion worth of ships in Hawaii. The market looks good and our bookings are strong. The economy and hospitality industry here are going very, very well. We will fill up the ship. It will run full.

HB: Is the Hawaii cruise-ship passenger any different than cruisers from other markets?
RK: Hawaii is a little different market. Compared to the Caribbean cruiser, the Hawaii passenger comes from a higher socioeconomic bracket, quite comparable to the Alaska or European market. Age-wise, the demographic is pretty consistent and age fluctuates tremendously throughout the year. The average age of our passenger in the summer is in the early forties and once the kids go back to school and into the winter, the average goes into the early fifties. Otherwise, the cruiser coming here is more destination-oriented rather than just cruising. They are here to see Hawaii. In the Caribbean you have a lot of people who just want to cruise.

HB: Rising fuel costs are big impediments to businesses across the board. How will fuel costs affect your plans for growth in the Islands?
RK: Fuel is a big cost in the industry. It's something we can't control. Fortunately, even though fuel here is very expensive, we use much less fuel here than other itineraries. We don't travel very far. This June, we will be bringing about 8,000 people a week down here. It is an awful lot of growth very quickly, but all the signs seem to indicate that the demand is there for this growth. I think we should sit back and take a look at things. Realistically, I don't think that the Neighbor Islands can handle any more traffic beyond what is in the market in Hawaii without significant improvements to their ports. Right now, the ports will meet our needs, but the state clearly has issues that need to be dealt with.

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