Shane Nelson
Shane Nelson

InsightThrough the first three months of 2014, the number of visitors arriving to the Hawaiian Islands onboard cruise ships declined nearly 30%.

The drop-off was even more pronounced in March, with cruise arrivals plunging more than 56% vs. March 2013, according to the Hawaii Tourism Authority (HTA).

“It’s very cyclical,” David Uchiyama, the HTA’s vice president of brand management, said of Hawaii’s cruise business. “So based on the pattern, we knew this was going to be a down year. Cruise lines like Crystal cut their business to the Islands in half every other year. So that plays into the mix. Disney, instead of two [ships], is coming in with one, and there are [other companies] that are like that.”

It should be noted that travelers arriving to Hawaii by cruise ship accounted for only 161,600 of the more than 8 million visitors welcomed by the Aloha State in 2013. Still, Uchiyama said bolstering Hawaii’s cruise revenue has been an area of increased focus.

“We’ve engaged the cruise business in the last couple of years more than we ever have,” he said. “When we first got in here and [overall tourism] business was down, the first thing we did was attack the airlines and work with them. We’ve kind of gotten that under control. We’re continuing to grow airlift into the Islands, but now we feel we need to look at the cruise business and see what opportunities are there.” ShaneNelson

Hoping to build a better foundation for cruise business, the HTA has begun work on a software program to help the state and cruise lines better schedule stops at the Islands’ various ports. Currently, the Hawaii Department of Transportation and the Department of Land and Natural Resources manage the ports used by cruise companies across Hawaii.

“There is no system that marries the two together in terms of scheduling ships of any nature, freighters or cruise ships,” Uchiyama explained. “And one of the things we discovered in talking with the cruise lines is they would sometimes get bumped from a pier because a freighter was docked.”

Another chief aim of the new scheduling software would be increasing shore excursion revenue. At some of Hawaii’s smaller port communities, tour operator products are limited, and having just one 2,000-passenger vessel arrive can max out a destination’s ability to meet a cruise ship’s activity needs.

“When you take two ships into the same harbor, you really have limited shore excursion product that can be shared between the two ships,” Uchiyama added. “So you don’t really get an optimum revenue opportunity.”

Having too many ships in a port at one time isn’t only bad for the cruise lines; however, it also doesn’t make a lot of sense for Hawaii-based tour operators, who end up swamped one day but then don’t have any cruise business sometimes for a week or more, according to Uchiyama.

“Scheduling on the [software] program will allow the cruise lines to adjust their itineraries so they can optimize shore revenue,” Uchiyama said. “And in turn, our vendors on shore can get a more consistent flow of revenue into their businesses.”

Asked what type of feedback the HTA received from cruise lines about the new scheduling software plan, Uchiyama admitted not everyone thought it was a home run.

“Some of them said it didn’t matter; others said, ‘Yeah, it does matter.’ So we got mixed reviews,” Uchiyama reported. “But I think anytime you can orchestrate scheduling and see who is where or where’s the opportunity for me to go [that] creates a better environment, and with that other ships can enter into the scheme.”

Uchiyama said the program is still quite a ways from completion, and they’re just beginning the search for business partners to create the product, but he’s hopeful the program could have an impact on cruise business to the state by 2016.

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