Hawai‘i Cruise Study

FINAL REPORT
Prepared for:
The State of Hawai‘i
Prepared by:
ICF International

December 2008
Hawai‘i Cruise Study
Two-page executive summary (1 of 2)

] Objective and Purpose: The Hawaii Cruise Industry Study was conducted to assess the
cumulative impacts and benefits of the cruise industry on each island and the State of Hawai‘i in
2007 and projected out to the year 2018. The study will be used by policymakers to assess the
need, if any to make decisions in response to the impacts and benefits.
] Team: The study was conducted for the State of Hawai‘i—including four agencies led by the
Hawai‘i Tourism Authority (Momi Akimseu) and the Department of Business, Economic
Development, and Tourism (Pearl Imada Iboshi)—by a team of consultants led by ICF
International.
] Steward Oversight: A diverse panel of 30 Stewards, or "servant leaders," from across the islands
in business, government, and NGOs provided input, oversaw study approaches, and reviewed
findings.
] Public Input: In addition, over 275 interviews with cruise lines, ports staff, service providers,
tourism businesses, recreational harbor users, environmental groups, government agencies, and
others were conducted over the course of this year-long study from 11/2007 to 12/2008.
] Final Study Reports: The final body of work consists of 13 module reports. Please contact the
Hawai‘i Tourism Authority to access the reports. Phone#: (808) 973-2255
] Direct costs of cruise tourism are less than $3.3 million per year: The study found that the
direct costs of cruise tourism statewide, including the impacts on air quality, airports, state parks,
ports and harbors, and vehicle trips, total less than $3.3 million per year. The cruise industry
imposes other costs to the state, but because of data limitations the study team was not able to
estimate dollar values for these costs. These impacts have been described in depth in other
modules of the study.
] Direct benefits of cruise tourism are $475.4 million per year: The cruise industry provides
direct benefits to the state in the amount of $475.4 million on average per year. This benefit stems
from the increase in economic activity generated by the cruise industry, as measured by GRP.

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Hawai‘i Cruise Study
Two-page executive summary (2 of 2)

] The cost-benefit analysis shows a net benefit of the cruise industry for the state: The study found that the
estimated benefits of the cruise industry exceed the estimated costs for the state as a whole.
] The islands do not benefit equally from the cruise industry: Honolulu County and Hawai‘i County show a
large net benefit from the cruise industry under all scenarios examined, whereas Kauai County and especially
Maui County show different levels of benefit under different assumptions. Kaua’i County benefits from the cruise
industry so long as 16.7 percent of cruisers are exclusive cruisers who would not otherwise come to Kaua’i and
stayed in land-based accommodations. Maui County requires the highest— 51.8 percent to be exclusive cruisers.
On the other hand, Honolulu County and Hawai‘i County show the opposite trend of Maui and Kauai—even if 0
percent of cruise visitors were exclusive cruisers, the cruise industry still represents a net benefit.
] Why Maui is different: A key component of the cost-benefit analysis is the unrealized economic benefits (or
“opportunity costs”) from the cruise passengers who we assume would have stayed in land-based
accommodations in the absence of a cruise industry. These large, unrealized economic benefits of land-based
accommodations are included in the “costs” column in the cost-benefit analysis for the cruise industry. These are
higher for Maui because Maui benefits from the largest increase in GRP per land-based visitor of all the counties
and the second highest volume of tourism from non-cruise tourists after Honolulu County.
] Direct taxes outweigh direct costs: The study also found that the total direct taxes (State and county) paid by
the cruise industry outweigh the total direct costs by its presence in the State of Hawai‘i. However, the study could
not specifically measure the direct revenues to each county versus the direct costs of the industry in each county.
] Hawai‘i is a strong visitor destination, but trails others as a cruise destination: Visitor demand for Hawai‘i is
strong (71% of US mainland travelers are extremely or very interested in visiting Hawai‘i) but their interest in
Hawai‘i as a cruise destination trails other cruise destinations (Caribbean/Eastern Mexico, Alaska, Bahamas, and
Bermuda). Still, demand for cruising in Hawai‘i grew by 22% from 2002-2005 (coinciding with the NCL America
entry to the market).
] Uncertain future for cruise industry in Hawai‘i: The future of cruising in Hawai‘i is uncertain. Using best
available information the study team predicts that U.S.-flagged cruising to Hawai‘i will stay constant at the lower
level seen in 2008, and there will be no substantial increase in foreign-flag ships in the short-term, but there will be
long-term growth that is lower than the North American cruise market average. This translates into a projection of
a net average annual growth rate in total Hawai‘i cruise passenger volume of 1.29% over the 2009 - 2018 period.

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Contents of this Report
This PowerPoint report is an executive summary of the key
findings of the Hawai‘i Cruise Study

] Introduction, Objectives, and Overview of Study

] List of Public Stewards who Oversaw the Study
] Approaches & Key Findings of Study, by Module
(see next slide for list of modules)
] Overall Key Findings of Hawai‘i Cruise Study
] For More Information

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Introduction, Objectives, and Overview of the
Hawai‘i Cruise Study

] Objective: The Hawaii Cruise Industry Study was

conducted to assess the cumulative impacts and The study was conducted in 13 modules:
benefits of the cruise industry on each island and the
State of Hawai‘i in 2007 and projected out to the year
2018.
] Purpose: The study will be used by policymakers to ] Module 1: Assessment of the Cruise Industry
assess the need, if any to make decisions in ] Module 2: Assessment of Hawaii’s Cruise
response to the impacts and benefits.
Industry
] Team: The study was conducted for the State of
Hawai‘i—including four agencies led by the Hawai‘i ] Module 3: Impact on the Economy
Tourism Authority (Momi Akimseu) and
the Department of Business, Economic ] Module 4 A: Impact on Harbor and Port Facilities
Development, and Tourism (Pearl Imada Iboshi)—by ] Module 4 B: Impact on Public Roads, Streets,
a team of consultants led by ICF International.
and Highways
] Steward Oversight: A diverse panel of 30 Stewards,
or "servant leaders," from across the islands ] Module 4 C: Impact on Community Infrastructure
in business, government, and NGOs provided input,
oversaw study approaches, and reviewed findings. ] Module 5 A: Impact on Marine Environment
] Public Input: In addition, over 275 interviews with ] Module 5 B: Impact on Air Quality
cruise lines, ports staff, service providers, tourism
businesses, recreational harbor users, environmental ] Module 5 C: Impact of Cruise Passenger
groups, government agencies, and others were Onshore Activities
conducted over the course of this year-long study
from 11/2007 to 12/2008. ] Module 6: Impact on Heritage Sites
] Final Study Reports: The final body of work ] Module 7: Cost-Benefit Analysis
consists of 13 module reports They can be accessed
on the project web portal using Username: GUEST ] Module 8: Comparison with On-Shore
(case-sensitive; use all caps); Password: Accommodations
hawaiicruise.
https://quickplace.icfconsulting.com/hawaiicruisestud ] Module 9: Best Management Practices
yicf

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The Stewards of the Hawai‘i Cruise Industry Study
This diverse group of 30 servant leaders met quarterly during the yearlong study to provide
information resources, review research methods, offer objective review and revision of all
study findings, and “contextualize” the study results.
] Ms. Haunani Apoliona, Chairwoman, Office of Hawaiian Affairs
] Mr. George Applegate, Executive Director, Big Island Visitors
Bureau
] Ms. Lulani Arquette, Executive Director, Native Hawaiian
Hospitality Association (NaHHA)
] Ms. Toni Marie Davis, Executive Director, A3H (Activities &
Attractions Assn. of Hawaii)
] Mr. Les Enderton, Executive Director, O‘ahu Island/Visitor
Industry
] Ms. Laura Fabrey, Education and Outreach Coordinator,
Department of Land and Natural Resources
] Mr. Alfred Grace, Vice President, Sales, Polynesian Cultural
Center
] Ms. Paula Helfrich, Chief Executive Officer, Economic
Development Alliance of Hawaii (EDAH)
] Ms. Sue Kanoho, Executive Director, Kaua‘i Visitors Bureau
] Ms. Leimomi Khan, President, Association of Hawaiian Civics
Clubs
] Mr. Harry Kim, Mayor, Hawai‘i County
] Ms. Teri Leicher, Board Member, Malama Kai Foundation
] Mr. Kaipo Lum, Economic Development Chairperson,
Association of Hawaiian Civics Clubs
] Mr. Mark McGuffie, Executive Director, Hawaii Island Economic
Development Board, Inc.
] Mr. Ku`uhaku Park, Government & Public Affairs Manager,
Horizon Lines - Honolulu
ICF International
] Ms. Carol Pregill, President, Retail Merchants Hawai‘i
] Mr. Patrick Shaw, Hawai‘i Representative, Northwest
CruiseShip Association
] Mr. John Strom, Enterprise Honolulu (Oahu's Economic
Development Board)
] Mr. Neil Takekawa, Vice President of Sales and Marketing,
Hawai‘i Superferry (Formerly President, Roberts Hawai‘i Tours)
] Ms. Miwa Tamanaha, Executive Director, KAHEA: The
Hawaiian Environmental Alliance
] Ms. Enriqueta Tuason Tanaka, Manager, Industrial Engineering,
Matson Navigation Company
] Ms. Deidre Tegarden, Coordinator, Office of Economic
Development, Maui County
] Ms. Beth Tokioka, Director of Economic Development, Kaua‘i
County
] Mr. Roy Tokujo, President, Cove Entertainment
] Mr. Murray Towill, President, Hawai‘i Hotel & Lodging
Association
] Ms. Terryl Vencl, Executive Director, Maui Visitors Bureau
] Ms. Mary Pat Waterhouse, Director of Budget and Fiscal
Services, City and County of Honolulu
] Ms. Marsha Wienert, Tourism Liaison, State of Hawai‘i
] Mr. Alan Yamamoto, Vice President, Hawai‘i Operations, NCL
America
] Ms. Mattie Yoshioka, President and CEO, Kaua‘i Economic
Development Board, Inc.
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 Approach & Key Findings of Each Module of
the Hawai‘i Cruise Study:
Modules 1-9

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Module 1: Assessment of the Cruise
Industry—Approach

] Overview of the Global The 3 Companies that Dominate the Cruise Market, and Others
Cruise Industry, including
History, Key Players, Key Carnival
Carnival Corporation
Corporation

Trends, Technologies,
Industry Outlook, and
Discussion of Cruising and
Impacts on Select Cruise Royal
Royal Caribbean
Caribbean Cruises Ltd..
Cruises Ltd Star
Star Cruises
Cruises Ltd.
Ltd.
Destinations Competitive with
Hawai‘i.
] Conducted over 50 interviews
with cruise industry and Independent
Independent Cruise
Cruise Lines
destination stakeholders, and Lines

did exhaustive review of

secondary research and
literature focusing on those
issues and activities that are
most important and relevant
to Hawai‘i.

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Key Findings on Assessment of the Global
Cruise Industry

] Key Trends:
– Worldwide passenger
growth The Trend in Annual Worldwide Cruise Passenger Growth*
– A plethora of new ships 15 12.8
– Ever bigger vessels 12.0 12.6

M illio n s o f P a s s e n g e r s
11.2
– New destinations 12 10.5
9.5
– The growth of US 8.7
homeports 9 7.2 7.5
6.3
– Something for everyone
4.7 4.8 4.7 5.0 5.4 5.9
– New source markets 6 3.8 4.2 4.4
] Outlook and 3
Observations:
– The appeal and growth of 0
cruising show no signs of
abating.
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06

2 0 (P )

)
(P
– The outlook—barring a
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
07
08
major accident or

20
catastrophe at sea—is for
continued growth from both *Passengers of CLIA member lines.
US and international Source: CLIA
source markets
– A wide range of issues and
impacts have developed as
a result of the growth of
cruise tourism

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Module 2: Assessment of Hawai‘i’s Cruise
Industry—Approach

] History, Market, Outlook, Growth

Projections, and Regulatory Framework Most Appealing Place for Next Cruise among Past Cruisers
for the Hawai‘i Cruise Industry
] Drew on Menlo Consulting Group’s Caribbean/Eastern Mexico 47%
proprietary TravelStyles data on Alaska 28
American and Canadian outbound Bahamas 22
travelers to profile the Hawai‘i cruise
Bermuda 16
market and demand outlook.
Hawai‘i 16
] Researched and reported on the
regulatory environment for cruising in Mediterranean/Greek Islands/Turkey 13
Hawai‘i, including all authorities and Europe 10
jurisdictions applicable to cruise West Coast of Mexico 9
industry in Hawai‘i.
Panama Canal 9
] Conducted over 25 interviews with key
Canada/New England Area 6
cruise lines, visitor bureaus, and other
authorities in Hawai‘i applicable to the Coastal U.S. 5
cruise industry in order to document the South America 4
industry’s development and project
future growth out to the year 2018.
Source: CLIA. 2006 Cruise Market Profile.

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Key Findings on the Projected Future Growth
of Hawai‘i’s Cruise Industry

] Visitor demand for Hawai‘i is strong:

71% of US mainland travelers are
extremely or very interested in visiting Actual and Projected Total Hawai‘i
Hawai‘i. Cruise Passenger Volume
] …But Hawai‘i trails others as cruise
destination: The Caribbean/Eastern 550,000
(1996 to 2018)
Mexico, Alaska, Bahamas, and 501,698
Bermuda all surpass Hawai‘i as the 500,000
most appealing place for next cruise 450,000
among past cruisers.
400,000

Number of Cruise Passengers

] Still, demand for cruising Hawai‘i
grew by 22% from 2002-2005: This 350,000
coincided with NCL America entry to the
market. 300,000
266,515 248,677
] U.S.-flagged cruising to Hawai‘i will 250,000 235,027
stay constant at the lower level: Likely 200,000 221,673
to remain constant at 1 ship, with
possibility for another ship to return, 150,000 130,609
probably no earlier than 2010.
100,000
] Foreign-flag cruising will grow, but 92,250
slower than the North America 50,000
average: There will be no substantial 0
increase in foreign-flag ships in the
short-term, but there will be long-term
growth (Annual Average Growth Rate of
2.5%), albeit at a lower rate than the Actual v olume Projected v olume
North American cruise market as a
whole (AAGR 4.3%).
] Projected AAGR of 1.29%: The above
predictions translate into a projection of
a 1.29% AAGR for Hawai‘i cruise
passenger volume over 2009 - 2018.

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Module 3: Impact on the Economy—Approach

] Model Used: REMI Policy Insight

– Dynamic regional economic impact model
– Estimates impacts for 4 counties
• Hawaii, Honolulu, Kauai, and Maui
] Inputs into Model:
– Cruise line spending: Based on 2008 survey conducted by
study team.
– Crew member spending: Based on 2008 survey conducted by
study team.
– Cruise passenger spending: Based on 2007 DBEDT annual
passenger survey data.
– State/Local taxes and fees: Estimated based on various tax
rates and expenditures by the other three categories

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Key Findings on Economic Impact

] Gross Regional Product: In 2007 the Hawai‘i

cruise industry added close to a billion dollars
(about $973 million) to the state’s gross regional Impact of Cruise Industry on Gross Regional
product, the most comprehensive measure of Product (GRP), by County, 2007-2018
regional economic activity. This represents about
1.56 percent of the state’s GRP.
] County-level findings: Honolulu gains the most
from cruise industry activity in absolute terms
(over $450 million in 2007), but due to the
smaller size of the Kauai economy, it is more
dependent on cruise activity (representing nearly
5.3% of its economy in 2007).
] Employment: In 2007 the cruise industry
supported about 17,000 jobs in the Hawai‘i
economy (including direct, indirect and induced
jobs).
] Disposable Income: Disposable income for
Hawai‘i residents grew by about $435 million in
2007 due to the cruise industry.
] Taxes and Fees: The cruise industry generated
close to $110 million in 2007 in total tax revenues
(direct and indirect) related to the cruise activities.
] Future Impact: Declining growth trends indicate
that the incremental impact of the cruise industry (in
GRP) will be smaller in subsequent years, estimated
$468 million in 2018. Decline cruise activity will
flatten the job impact to 6,000 - 7,000 in 2018.

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Module 4A: Impact on Ports and Harbors—
Approach

] Analyzed the cruise industry impact on:

– Government services
– Maintenance and operations
– Harbor usage and waterside infrastructure
– Pier and terminal facilities capacity
– Landside access management
– Costs of operations and modernizations
] Analyzed impact on nine ports and harbors that serve the cruise industry, both:
– Current impact in 2007 prior to implementation of modernization plan
– Future impact, post-modernization implementation, using projections of cruise activity
] Observed cruise vessel operations at each harbor and collected baseline information on waterside and
shoreside infrastructure and harbor operations management.
] Estimated cruise visitors numbers, itineraries, and vessel calls to each harbor between 2007 and 2018,
and estimated commercial vessel calls to each harbor.
] Assessed current impact of cruise industry by examining the gap between current capacity and existing
demand on waterside and landside infrastructure and government services.
] Assessed future impact of cruise industry by examining how harbor modernizations will mitigate capacity
gaps and conflicts identified in current demand analysis.
] Measured the monetary impact of the cruise industry in three primary ways:
– The impact on personnel and costs of personnel as a consequence of cruise trade activity.
– The documentation of cruise events and situations that may require involvement of personnel and investment of resources that are
not part of normal operations and budgets.
– The analysis of the alternative use potential for cruise-related facility space and its income potential.
] Collected data through survey and interview with DOT Harbors District Managers and various ports staff.

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Key Findings on Impact on Ports and Harbors

] Government Services: The U.S. Department of Homeland Security (DHS) regulations requirements for training, security,
and safety related to the cruise industry treats all cruise vessels, their passengers and their luggage with the same level of
security that it treats international vessels, their crew and cargo. This requires harbor personnel services that exceed the
demands for security and safety of domestic cargo vessels.
] Maintenance and Operations Impact: Cruise terminal facilities and comfort stations maintenance, lighting and water costs
during a cruise vessel call impacts harbor personnel, contractors and utility and maintenance expense for the operations and
management budgets of all Hawai‘i harbors.
] Harbor Usage and Waterside Infrastructure: Severe weather conditions combined with channel navigation issues at
Nāwiliwili and Hilo Harbors may result in cruise vessel delays and missed schedules in these harbors. Harbor personnel paid
by the Harbors Division and security services paid by the cruise lines must be on standby during these delays which may
result in increased operational costs if overtime is involved.
] Pier and Terminal Facilities Capacity: Cruise vessels at multipurpose piers in Hilo and Nāwiliwili harbors eliminate any
shared use of their pier locations while a cruise ship is in port and reduce the total cargo pier space capacity at Nāwiliwili to
35.5 percent and at Hilo to 53.9 percent. Kahului pier capacity is reduced to 60.9 percent of total pier space available while a
single cruise vessel is in port. In 2007 the capacity for use by cruise and cargo under normal scheduling conditions was
considered sufficient by all of those interviewed.
] Landside Access Management: When both cargo and cruise vessels are in port, their management of safety and security
in the shared-use areas in and out of single gate access situations requires harbor personnel paid by the State and/or
contracted personnel paid by the cruise lines to guard walkways, direct passenger and vehicle traffic, and check the
credentials of passengers, crew, vendors and visitors. Kahului and Hilo Harbors have only a single gate entry. This may
result in occasional overtime for harbor personnel.
] Costs of Operations: The cruise-related overtime costs of ports and harbors security staffing were found by the study team
to be approximately $336,000 on average per year for the state.
] Cost of Modernizations: Because of the current cruise industry growth projections, major cruise facility modernizations that
were planned have been deferred.
] Future Impact: There was an approximate 47% decline in cruise vessel calls between 2007 and 2008, so many impacts
described are likely to decline. At the same time, the ports improvements that remain scheduled will improve the ability to
accommodate cargo and thus indirectly reduce the impact of the cruise industry. Both of these trends contribute to the effect
of reducing the impact of cruise operations on Hawai‘i’s ports and harbors in the future.

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Module 4B: Impact on Roads and Highways—
Approach

] Construct transportation profiles of existing facilities and conditions

in the vicinity of nine commercial and small boat harbors.
] Forecast cruise ship passenger numbers using Module 2 results.
] Convert passengers to vehicle trips on public roads, streets, and
highways surrounding ports by utilizing disembarkment rates and
assigning transportation mode shares based on:
– Passenger observations
– Tour bookings
– Proximity of destinations
– Transit availability and service
– Surrounding land uses and walking environment
] Quantify current background traffic, forecast traffic for 2018, and
add cruise ship-related trips to background traffic.
] Calculate Level of Service (LOS) for roadways in the vicinity of
each harbor. Compare LOS with cruise ship to LOS without cruise
ship.
] Calculate the monetary impact of cruise-related traffic using the
transportation impact fee ordinances from each island to estimate a
cost per vehicle trip.
] Note that this analysis is NOT an assessment of the need for future
infrastructure improvements.

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Key Findings on Impact on Roads and
Highways

Level of Service With and Without Cruise Passengers

] The addition of cruise passenger-related
traffic to the roadways surrounding the
major harbors has no impact on Level of
Service. LOS is expected to be identical on
these roadways on a cruise day and non-
cruise day.
] The majority of roadways surrounding the
major harbors are expected to be at Level
of Service A, B or C (traffic flowing
relatively freely).
] No additional roadway capacity needs are
projected through 2018 on roadways
surrounding the major harbors specifically
related to cruise industry impacts.
] On transit, the absolute number and
proportion of transit riders who are cruise
ship passengers is expected to decline in
the future. If there is a need to expand
transit capacity, these needs would not be
attributed to changes in cruise passenger
ridership.

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Module 4C: Impact on Community
Infrastructure—Approach

] Analyzed the current and anticipated demands on municipal infrastructure by

cruise ships in port, and cruise passengers and crew onshore.
] Conducted over 70 interviews with:
• cruise industry,
• harbor masters,
• shipping agents,
• municipal service providers,
• county officials.
] Estimated ship in-port utility usage: Estimates for the rate of municipal service use
were used to calculate demand levels.
– Used for water, sewer, solid waste, electricity and gas services.
] Estimated passenger & crew onshore utility usage: Estimated based on the
spending patterns of cruise passenger or crew member, and the utility usage by the
industries in which the dollars are spent (See Module 8 and DBEDT’s Sustainable
Tourism Model).
– Used for water, sewer, solid waste, electricity and gas services.
] Estimated passenger & crew onshore service usage: Where quantitative data
were not available, gathered anecdotal information from service providers.
– Used for police, fire, health care, emergency services, air transportation, and visitor services.
] Estimated air transportation usage & cost: Using data on Honolulu International
Airport operating costs and the number of cruise passenger enplanements per year,
we calculated the approximate cost per passenger.

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Key Findings on Impact on Community
Infrastructure

] Municipal Utilities (Water, Sewage, Solid Waste, Electricity, Gas): Cruise passenger & crew
onshore usage is greater than usage by ships in port. Yet still, daily onshore utility demand by
cruise ship passengers and crew is lower than those by residents and land-based tourists.
] Healthcare: No indication of a regular increase in ER visits leading to an impact on ER resources
when a cruise ship is in their port. Only Hilo Medical Center and Kona Community Hospital feel an
occasional adverse impact of cruise ships in port.
] Police Services: No evidence that cruiser passengers are responsible for a disproportionate
amount of crime in any county. An extra officer is required at some ports for traffic management
(Lahaina), and some ports respond to crew fights (Kona and Lihue), though this was not
considered a strain on department resources.
] Fire Services: No evidence of substantial increases in the fire department workload when cruise
ships are in port.
] Emergency Services: No evidence of changes in frequency of emergency situations when cruise
ships are in port.
] Visitors and Convention Bureau: Cruise ship passengers comprise a very small percentage of
all visitors assisted by the bureaus. This is because of distance, time constraints, and ability to
make advance arrangements via telephone or online.
] Visitor Assistance Program: Cruise ship passengers comprise a very small percentage of all
visitors assisted by the visitor assistance programs. The exception is the Big Island, where
between 10-32% of East and West Hawai‘i VASH users are cruise passengers.
] Air transportation: Cruise passengers represent approx 1.78 percent of passenger
enplanements at Honolulu International Airport. In 2007 the airport operating expenses
attributable to cruise passengers were an estimated $5.2 million. Cruise aviation impacts are
anticipated to be minimal out to the year 2018, therefore any aviation-related infrastructure
constraints would not be attributable to the cruise industry.

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Module 5A: Impact on Marine Environment—
Approach

] Profile the marine natural resources that could be impacted by cruise ship industry operations.
– Interviews with staff from the Humpback Whale National Marine Sanctuary, NOAA, and Hawai’i DLNR
– Interviews with whale-watching and reef-diving excursion providers in Lahaina and Kona.
– Review of information from various coral reef protection organizations based in Hawai’i, including the Hawai’i Coral Reef Network;
and, review of publications released by the Humpback Whale National Marine Sanctuary.
] Characterize the cruise passenger activities that could potentially impact marine resources.
– Inquiries to the cruise industry and local excursion providers.
– Field observations of excursion providers operating at the ports.
– Interviews with district harbor managers.
] Identify the port and harbor improvements that are planned to accommodate the cruise industry, and
identify associated impacts to the marine environment.
– Interviews with Hawai‘i (DOT) Harbor Managers for Hilo, Kahalui, and Nāwiliwili
– Interview with Hawai’i DNLR dock manager for Kailua-Kona.
– Email exchanges with DLNR dock manager for Lahaina.
– Interview with Mr. Fred Pascua, Planning Engineer for the DOT Harbors Division in the Honolulu office.
– Review of Harbor Modernization Plans and the Environmental Impact Studies related to harbor improvements.
] Identify cruise ship operations that could adversely impact marine resources.
– Data on waste generation and operational discharges provided by the NWCA membership.
– Onboard tours and interviews with ship personnel for three of the larger ships that make frequent calls to Hawai‘i ports. The ships
were from three different cruise lines: Pride of America (NCL America), Diamond Princess (Princess), and Vandaam (Holland
America).
– Interviews with the district harbor managers and small boat harbor masters regarding waste management or discharge issues
related to cruise ships.
– Inquiries to the Humpback Whale National Marine Sanctuary regarding any records of whale strikes involving a cruise ship or
cruise ship passengers on off-ship excursions.
– Review of recent reports on cruise ship waste generation and management prepared by the U.S. Environmental Protection
Agency.
] Evaluate marine impacts, drawing from each of the steps outlined above.

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Impact on Marine Life

Cruise Ship Operations

and Passenger Activities
Marine Resource
that Could Adversely Impact
Resource
Monk Seals
(Note: the majority of Monk • Cruise vessels could strike the seals
Seals inhabit the
Northwest Hawaiian
Islands, not the
islands cruise
vessels visit) • Human activities at beaches can cause
seals to abandon haul-out spots
• Lights on cruise vessels attract birds,
Sea Birds which collide with the ships and are
injured
• Cruise vessels or tenders could collide
with whales while the vessel is underway,
Marine Mammals especially at night when visibility is poor.
The mother-calf pairs that occupy shallow
waters are the most vulnerable.
• Sea turtles feed in shallow coastal areas,
including reefs. Interference by humans
or degradation of habitat and feeding
areas (algae on reefs) could impact
Sea Turtles
turtles.
• Cruise vessels or tenders could collide
with sea turtles.
Current Mitigation Measures
Observed on Cruise Ships
• Cruise ships have Marine Mammal Avoidance
Procedures, and there is always a look-out on
the bridge. However, because the ships steam
mostly at night, there is limited visibility and
the Monk Seal would likely be too small to
recognize from the vessel bridge.
• None identified.
• Some adjustments to running lights have been
made
• Procedures are in place for ship’s crew to
rescue birds found on the ships
• Same as for Monk Seal above.
• None identified.
• None identified.
Resultant Expected Impact
• Risk that vessels could strike seals while
underway.
• Cruise passengers visiting beaches, while only a
small percentage of the total number of visitors,
will contribute to degradation of the habitat for
seals.
• Birds are hitting ships and injuring themselves
• Risk that a cruise vessel could collide with a
marine mammal. Although an incident involving a
cruise vessel has never been confirmed, it is
possible that the ship’s crew would not be aware
of the collision.
• Overloading of some beach areas frequented by
cruise passengers (Kahaluu, Hanauma) is likely
contributing to the degradation of these turtle
foraging areas.
• Risk that the cruise vessels or tenders could
collide with a sea turtle and possibly not be aware
of it.

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Impact on Corals
Cruise Ship Operations
Marine and Passenger Activities
Resource that Could Adversely
Impact Resource
• Coral will be significantly
damaged within the anchor
sweep zone around cruise-line
anchoring locations in Lahaina
and Kona.
• Visitors to beaches and
offshore reefs may step on live
Corals corals or interfere with feeding
turtles and fish, thus damaging
corals and impacting the reef
ecosystem.
• Mini submarines that operate
close to reefs could interfere
with the plant and animal
inhabitants of the ecosystem.
ICF International
Current Mitigation Measures Observed on
Resultant Expected Impact
Cruise Ships
• Coral will be damaged in the
• Ships are directed by the dock manager to a chain sweep area of
limited number of anchorage sites in Lahaina approximately one-quarter
and Kona. mile at each location where
a cruise vessel anchors.
• A significant number of cruise passengers visit
beaches that have accessible near-shore patch • Overloading of some beach
and fringing reefs. Also, some passengers visit areas frequented by cruise
offshore reefs for snorkeling or diving. There is a passengers (Kahaluu,
high risk that visitors will step on or disturb the Hanauma) is likely
ecosystem during snorkeling or just swimming. contributing to the
• Local groups (Reef Watch) are attempting to degradation of corals in
educate visitors to sensitive areas, such as shallow water.
Kahaluu Beach near Kona.
• Probable
• Mini submarines go at very slow speeds to limit
attraction/avoidance by fish
negative interference with the reef ecosystems.
and other mobile species.
22 Icfi.com
Impact on Water Quality

Cruise Ship Operations

Marine and Passenger Activities Current Mitigation Measures Observed on
Resultant Expected Impact
Resource that Could Adversely Impact Cruise Ships
Resource

• Discharge of nutrient rich • The three cruise vessels inspected as part of • With Advanced Wastewater
sewage (black water) effluent this study were equipped with Advanced Treatment Systems,
could contribute to the Wastewater Treatment Systems, which contribution of the cruise
production of algal blooms should result in low-nutrient discharge. Use vessels to increased nutrient
that could promote algae of Advanced Wastewater Treatment concentrations should be
overgrowth on reefs. Systems are not legally required in Hawai‘i. minimal
General Water
Quality
• Potential discharges of toxic
• There are currently enforceable regulations • Based on shipboard
pollutants (oil, cleaning
prohibiting discharges of oil and hazardous observations made during this
solvents, etc) could contribute
materials. study and the presence of
to decreased water quality
• Good waste handling procedures were enforceable prohibitions against
and subsequent impacts on
observed during vessel inspections. discharge, impacts are unlikely.
reef communities.

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Key Findings on Overall Marine Impacts

] Cruise Ship Waste Management Procedures and Mitigation

Practices are Advanced Enough to Avoid Significant,
Quantifiable Impacts: From a review of ship operations and
resultant waste streams, mitigation measures in practice on the
observed cruise vessels were sufficient to avoid significant,
quantifiable impacts to the marine environment.
] Still, Contaminant Constituents Could Have Impact: Metals,
bacteria, organics, when added to inputs from other sources, may
result in a cumulative impact on the marine environment.
] Key Impact of Cruise Industry is the Probable Destruction of
Live Coral Bottoms: Caused by the chain sweep at anchorage
areas at Lahaina and Kailua-Kona. The area of damage would be
approximately 600-foot diameter circle, and is an unavoidable result
of dropping an anchor. Impacts can be minimized by strictly
enforcing use of a limited number of anchorage locations.

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Module 5B: Impact on Air Quality—Approach

] Used two approaches to estimate air quality impacts of cruise ships in

port:
– Potential Human Health Impacts (Worst Case Scenario):
• Shows the potential highest-level impacts over short periods.
• Modeled potential maximum ambient concentrations resulting from short-term
emissions measured at nearest resident’s home under adverse meteorological
conditions.
• Vessel attributes such as size, engine power, and stack parameters were used to
estimate emissions from cruise vessels.
• Used the EPA-approved SCREEN3 model.
• Compared results to most stringent state and federal health-based standards.
– Economic Costs of Cruise Ship Air Emissions:
• Estimates the economic costs of air emissions from cruise ships on an annual basis.
• Economic costs associated with air emissions were calculated by multiplying unit values
($/tonne-1,000 people) by total emissions (tonne/yr) and population affected, resulting in
total value ($/yr) of monetary damages resulting from the subject emissions.
• Analysis is refined through use of wind rose data and data on the populations residing
within each of 16 sectors of the compass from the cruise ship port emission points.
Using these data, the percent of the time that pollutants were advected towards
population centers was factored into the analysis.

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Key Findings on Potential Human Health
Impacts

] Short-term, worst-case ambient

air pollutant concentrations Results of Screening Analysis for Air Pollutants from
attributable to cruise industry air Cruise Industry Sources Plus Ambient Background
emissions can potentially exceed Concentrations at 6 Ports in Hawai‘i
health-based ambient air quality
standards for: Pollutant
CO NO2 PM10
PM2.5 (µg/m3)
SO2
(ppm) (ppm) (µg/m3) (ppm)
– PM2.5 and PM10 near 3 of Standard Level 9 4.4 0.18 150 35 0.14
Hawai‘i’s 6 cruise ship ports;
Averaging Time 1-hr 8-hr 1-hr 24-hr 24-hr 24-hr
– NO2 near all 6 ports (though Ports
it should be noted that the
Hilo, Hawai‘i 0.0 0.1 0.51 – – –
short-term NO2 standard
used in this analysis is the Honolulu, O‘ahu 1.8 3.3 1.74 100 – 175 80 – 147 0.007
most stringent California Kahulu‘i, Maui 0.0 0.0 0.27 55 – 58 8 – 10 0.000
standard and does not apply Kailua-Kona, Hawai‘i 0.1 0.1 0.67 – – –
to Hawai’i); Lahaina, Maui 0.1 0.1 0.76 144 – 177 39 – 69 0.000
] The analysis screened out the Nāwiliwili, Kaua‘i 0.2 0.3 2.30 115 – 205 76.3 – 126.2 0.003
potential for exceedances of SO2
or CO standards at all ports. Blue shading indicates that the top range results are above the most stringent standard.
] The highest concentrations
resulting from cruise industry-
related emissions were predicted
at the Nāwiliwili port, followed by
Honolulu and Lahaina.

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Key Findings on Economic Costs of Cruise
Ship Air Emissions

] The estimated damages from

cruise ship air emissions
statewide in 2007are $14,000.
Total Current and Projected Statewide Economic Costs of
] The highest single-port damage
values were estimated for Kailua- Cruise Ship Air Emissions
Kona ($5,000 in 2007), followed
by Honolulu ($3,100 in 2007). Year Low High
] Cruise ship air emissions are
estimated to cause relatively low 2007 $7,600 $14,000
economic damages in Hawai’i
when looked at on an annual 2009 $3,600 $6,500
basis. This is because: 2012 $4,200 $7,500
– The short-term, worst-case
conditions examined in the 2015 $4,800 $8,500
Potential Human Health Impacts
Analysis occur for a relatively 2018 $5,400 $9,600
small portion of the time on an
annual basis;
– Hawai‘i’s climate features
relatively strong winds for a large
portion of the time, and
– Due to Hawai‘i’s geographic and
demographic configuration and
predominant wind directions, a
large portion of air pollutants
emitted in Hawai’i’s cruise ship
ports are advected out to sea and
away from human receptors.

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Module 5C: Impact of Cruise Passenger
Onshore Activities—Approach

] Estimate percentage of cruise passengers that participate in each type of onshore tour or
excursion to terrestrial parks or other natural areas:
– Using data from NWCA, tour and excursion companies, cruise line websites, and interviews of park
managers and other natural tourist attractions.
] Make assumptions regarding the percent of arriving cruise passengers who visit individual
key natural tourist sites:
– Using relative numbers of passengers taken to individual sites by the tour providers who provided such data,
frequency of mention of each site in excursion offerings by cruise lines, distance to individual sites from port
towns time required to visit the sites;
] Identify environmental impacts:
– Through interviews with managers of a selected set of natural sites popular with cruise passengers,
extrapolation of the information provided by these managers to other areas, and assessment of the specific
activities (and associated impacts) carried out by cruise passengers.
] Quantify environmental impacts where possible, for estimates of costs attributable to
cruise passengers for state park operations and emissions from diesel tour buses and
rental cars:
– Estimate number of diesel tour bus trips and rental car trips attributable to cruise passengers based on
previous passenger behavior information;
– Use the EPA and State emissions factors to calculate total emissions from cruise passenger trips in diesel
tour buses and rental cars;
– Use available economic cost factors to estimate total economic costs to Hawai‘i of particulate matter (PM)
emissions from tour buses. (Economic cost factors N/A for rental car emissions).
– Estimate the impacts of cruise passengers on the administration and operations budget of state parks in
Hawai’i by multiplying the estimated cruise passengers visiting state parks on each island by $1.33 (the
estimated state park expense per visitor in 2007).

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Key Findings on Impact of Cruise Passenger
Onshore Activities

] Large numbers of cruise passengers visit onshore natural sites: Ranging from 125,000 passengers on
Oahu to 200,000 passengers on Hawaii Island in 2007—but these numbers will drop in the future as cruise visits
drop.
] Cruise passengers constitute a portion of overall visitors: Can represent anywhere between 2-38% of total
visitors to parks. Generally constitute 5-15% of the visitors to the state parks. Constitute 4% of all visitors to
Haleakala National Park.
] Environmental impacts by cruise passengers occur at natural sites across the islands:
– Degradation of air quality resulting from tour bus emissions;
– Soil erosion impacts on private land as a result of horseback riding and 4X4, ATV, and Pinzgauer tours;
– Littering;
– Contribution to general wear and tear on state and natural park trails and visitor areas due to use.
] Key impacts are emissions from rental cars and tour buses:
– On each of the four islands visited by cruise ships, approximately 1,800 to 2,100 diesel bus tours took place in 2007 carrying
cruise passengers to onshore natural sites, representing 4.13 estimated tonnes of particulate matter at an approximate $1.3 M
cost.
– It was estimated that in 2007 cruise passengers drove rental cars between 660,000 to 1 million miles on each of the islands
visited by cruise passengers, or 3.3. million miles statewide, representing substantial amounts of CO, NOx, CO2, and reactive
organic gases.
] Littering and wear-and tear impacts are generally minor and reversible, but emissions from tour buses
and rental cars and soil erosion from offroading have the potential for significant impact when
considered cumulatively and can be difficult to mitigate.
] Generally, the environmental impacts of cruise passengers are no different from other types of visitors
to the natural sites, on a per-visitor basis: Interviews indicated there are no indications that the presence or
activity of cruise passengers results in overcrowding or overuse to an extent that detracts from the enjoyment of
any natural sites.
] The estimated costs of state park operations attributable to cruise passengers in 2007 ranged from
$153,456 on Maui and $166,236 on Oahu, to $189,376 on the Big Island and $248,847 on Kauai.

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Module 6: Impact on Heritage Sites—
Approach

Heritage Sites Included in the Analysis

] Heritage sites are sites where
visitors will experience the Primary Access
history and culture that Type of Data Utilized
Mode
comprise the pre-contact and
post-contact population of Tour
Site Guest
Hawai‘i. Site Tour Walking Interview Generated
Census Book
] Identify heritage properties Data
that cruise passengers visit.
Mokuaikaua Church, Hawai‘i 9 9 9 9
] Determine impacts (negative
or positive) of visitation from Pu‘uhonua O Hōnaunau,
9 9
cruise ship passengers. Hawai‘i
] Approach for selecting St. Benedict’s Church, Hawai‘i 9 9 9 9
heritage sites included in Hawai‘i Volcanoes NP 9 9
analysis:
– Heritage sites within ¼ mile of
Kōloa Town, Kaua‘i 9 9 9 9
disembarkation; Kilohana Plantation 9 9
– Heritage sites to which Russian Fort, Kaua‘i 9 9
commercial tours operate and
for which responses to data ‘Iao Valley, Maui 9 9 9 9
requests were available.
Wo Hing, Maui 9 9 9
] Methods for data collection:
– Site census on ship day vs.
Baldwin House, Maui 9 9 9
non-ship day; Hana Highway, Maui 9 9
– Interviews with site Makawao Town/ Tadeschi
managers/shop owners; 9 9
– Data from tour company; Vineyards, Maui
– Heritage site guest logs. Kahakuloa, Maui 9 9
Haleakalā, Maui 9 9 9
USS Arizona 9 9
USS Missouri 9 9
‘Iolani Palace, O‘ahu 9 9 9

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Key Findings on Impact on Heritage Sites

] Site census data for six select

Site Census Data Collected on Cruise Ship Days
sites show that numbers of
vs. Non-Cruise Ship Days
visitors on ship days was more
than double for non-ship days.
] Overall data show that cruise Koloa Town, Kaua`i
ship passengers represent a
small percentage of overall ‘Iao State Park, Maui
visitors to heritage sites.
] The greatest impact is in Baldwin House, Maui
No Ship in Port
overcrowding during peak
periods at sites with organized Ship In Port
Wo Hing Temple, Maui
tours, with pulses that average
30 minutes or less.
] However, site managers St. Benedict Church, Hawai`i
interviewed do not report any
visible physical degradation that Mokuaikaua Church, Hawai`i
results from the surges.
] Sites within ¼ mile walking
0 50 100 150 200 250 300
distance of port do not exhibit
overcrowding, although cruise
passengers represent an overall
increase.

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Module 7: Cost-Benefit Analysis—Approach

] The cost-benefit analysis is designed to answer:

– Do the benefits of the cruise industry in Hawai‘i
exceed the costs?
– How do taxes and fees generated by the cruise
industry compare to its costs?
] The approach to this CBA is to compare the benefits
and costs of the cruise industry against a hypothetical Components of the Cost-Benefit Analysis
scenario in which the cruise industry did not exist in
Hawai‘i.
] Therefore, it is important to understand that this CBA BENEFITS
BENEFITS COSTS
COSTS
not only considers the costs and benefits of the cruise == Benefits
Benefits of
of Cruise
Cruise Tourism
Tourism == Costs
Costs of
of Cruise
Cruise Tourism
Tourism
industry, but also includes the costs and benefits that ++ Unrealized
Unrealized Costs
Costs ofof Land-Based
Land-Based Tourism
Tourism ++ Unrealized
Unrealized Benefits
Benefits of
of Land-Based
Land-Based Tourism
Tourism
would have been incurred if cruise visitors had stayed
in land-based accommodations in the hypothetical Benefits
Benefits ofof Cruise
Cruise Tourism
Tourism Costs of
Costs of Cruise
Cruise Tourism
Tourism
absence of the cruise industry. •• Increase
Increase in
in GRP
GRP •• Air
Air Quality
Quality Costs
Costs
] When calculating the benefits of the cruise industry, •• Airport
Airport Costs
Costs
we consider both: Unrealized
Unrealized Costs
Costs of
of Land-Based
Land-Based Tourism
Tourism •• State
State Park
Park Costs
Costs
– The benefits of the cruise industry on the state’s •• Foregone
Foregone Air
Air Quality
Quality Costs
Costs •• Ports
Ports and
and Harbors
Harbors Costs
Costs
economic activity; and •• Forgone
Forgone Airport
Airport Costs
Costs •• Vehicle
Vehicle Trip
Trip Costs
Costs
– The unrealized costs that reflect the avoided •• Forgone
Forgone State
State Park
Park Costs
Costs •• Other
Other Costs
Costs
impacts on Hawai‘i because cruise visitors did not •• Foregone
Foregone Vehicle
Vehicle Trip
Trip Costs
Costs
stay in land-based accommodations. Unrealized Benefits
Unrealized Benefits of
of Land-Based
Land-Based Tourism
Tourism
] On the other hand, when calculating the costs of the •• Forgone
Forgone Increase
Increase in
in GRP
GRP
cruise industry, we consider both:
– The costs that reflect the impact of cruise visitors
on airports, the environment, state parks, ports and
harbors, and public transportation; and
– The unrealized benefits (i.e. opportunity costs) that
reflect the economic activity that is not enjoyed
because cruise visitors did not stay in land-based
accommodations, which tend to be associated with
somewhat higher levels of spending on state goods
and services.
] The cost-benefit analysis integrates the results of this
study’s other modules into a single evaluation.

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Key Findings of the Cost-Benefit Analysis

] Direct costs of cruise tourism are less than $3.3 million per year: The study found that the direct
costs of cruise tourism statewide, including the impacts on air quality, airports, state parks, ports and
harbors, and vehicle trips, total less than $3.3 million per year. The cruise industry imposes other costs to
the state, but because of data limitations the study team was not able to estimate dollar values for these
costs. These impacts have been described in depth in other modules of the study.
] Direct benefits of cruise tourism are $475.4 million per year: The cruise industry provides direct
benefits to the state in the amount of $475.4 million on average per year. This benefit stems from the
increase in economic activity generated by the cruise industry, as measured by GRP.
] The cost-benefit analysis shows a net benefit of the cruise industry for the state: The study found
that the estimated benefits of the cruise industry exceed the estimated costs for the state as a whole.
] The islands do not benefit equally from the cruise industry: Honolulu County and Hawai‘i County
show a large net benefit from the cruise industry under all scenarios examined, whereas Kauai County
and especially Maui County show different levels of benefit under different assumptions. Kaua’i County
benefits from the cruise industry so long as 16.7 percent of cruisers are exclusive cruisers who would not
otherwise come to Kaua’i and stayed in land-based accommodations. Maui County requires the highest—
51.8 percent to be exclusive cruisers. On the other hand, Honolulu County and Hawai‘i County show the
opposite trend of Maui and Kauai—even if 0 percent of cruise visitors were exclusive cruisers, the cruise
industry still represents a net benefit.
] Why Maui is different: A key component of the cost-benefit analysis is the unrealized economic benefits
(or “opportunity costs”) from the cruise passengers who we assume would have stayed in land-based
accommodations in the absence of a cruise industry. These large, unrealized economic benefits of land-
based accommodations are included in the “costs” column in the cost-benefit analysis for the cruise
industry. These are higher for Maui because Maui benefits from the largest increase in GRP per land-
based visitor of all the counties and the second highest volume of tourism from non-cruise tourists after
Honolulu County.
] Direct taxes outweigh direct costs: The study also found that the total direct taxes (State and county)
paid by the cruise industry outweigh the total direct costs by its presence in the State of Hawai‘i.
However, the study could not specifically measure the direct revenues to each county versus the direct
costs of the industry in each county.

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Summary of the Cost-Benefit Analysis

Net Present Value of the Cruise Industry by Island

(in $ Thousands)
Assumed Percentage of Cruise Passengers Who Would Still Vacation in Hawai‘i in the Absence of the
Cruise Industry and Stay in Land-Based Accommodations
0 percent 40 percent 67 percent 80 percent 100 percent
Honolulu 1,629,392.00 1,140,874.70 811,125.60 652,357.50 408,098.80
Hawai'i 617,466.70 407,994.50 266,600.80 198,522.30 93,786.20
Kaua'i 437,853.00 227,563.50 85,618.10 17,274.10 -87,870.70
Maui 613,228.20 104,464.00 -238,951.80 -404,300.20 -658,682.20
State of 3,297,939.90 1,880,896.80 924,392.70 463,853.70 -244,667.9
Hawai'i
These numbers represent 2009-2018 averages with 7 percent discounting. Totals may not add because of rounding.

ICF International 34 Icfi.com

Module 8: Comparison with On-shore
Accommodations—Approach

] A comparison of the economic impact and key utilities usage of 1,000 cruise
ship cabins and 1,000 hotel rooms, both at the average level.
] Output variables analyzed:
– Economic: Output, resident employment, resident earnings, government
revenues
– Utilities: Water, sewage, electricity, propane, solid waste
] Includes visitor, operational, and crew spending.
] A Module 8 sub-committee helped decide the basic input parameters, e.g.:
– 1 day timeframe, 2.0 persons/room, 100% occupancy
– Include cruise lodging expenditures in base analysis
– Exclude cruise on-ship spending and hotel visitor lodging from avg. daily
expenditures (captured in “operational spending” instead).
] As a result of study design, visitor spending largely drives the findings: The
larger per-person-per-day (PPPD) spending by hotel visitors than cruise passengers
drives the findings, and means hotels have higher economic benefits and
infrastructure costs (since all other parameters are held constant).

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Key Findings in Comparison of Cruise with
On-shore Accommodations

] Economic output: Hotel output was about 150% of cruise statewide. On O‘ahu only, hotel output a little less than
cruise, because of higher cruise crew & visitor spending. On neighbor islands, hotel output about 200% of cruise
output.
] Employment: Hotel jobs more than twice cruise jobs (residents only). On O‘ahu, hotels jobs still more than cruise but
less gap (140%). Kaua‘i had greatest gap: hotel jobs were 270% of cruise jobs.
] Earnings: Hotel-related earnings about 230% of cruise. On O‘ahu, gap was about 140%. On NI’s, gap was close to
300%.
] Government revenues: Hotel revenues were about 120% of cruise statewide. County revenue picture was much
different, where hotel revenues were anywhere from 1,000% (Oahu) to 7,800% (Kauai) of cruise revenues.
] Utilities usage: Hotel/cruise ratio ranged from 140% for water to 285% for propane. On O‘ahu, the gaps were narrower
(hotels were 110%-130% cruise). Greatest gaps were on Kaua‘i, where the hotel impacts were 250% to 780% of the
cruise figures for various utilities.

Statewide Cruise-Related Utilities Usage, 2007

Propane
1,000 Water (gallons) Sewer (gallons) Elec. (Kwh) Solid Waste (lbs)
(mmBtu)
Cabins/Rooms/Day
Cruise Hotel Cruise Hotel Cruise Hotel Cruise Hotel Cruise Hotel
Visitor Use 95,649 149,693 58,631 98,532 18,895 39,400 11.0 16.5 4,940 10,361

Operational Use 47,933 96,293 33 77,034 1,104 19,664 0.0 25.2 88 1,683

Non-Resident Crew Use 27,800 15,841 9,872 3.6 2,218

Total Use 171,382 245,986 74,504 175,566 29,870 59,064 14.6 41.7 7,246 12,044

ICF International 36 Icfi.com

Module 9: Best Management Practices—
Approach

] The best practices study attempts to answer the following questions:

– What are other ports currently doing to address the issues and challenges faced by State of Hawai‘i
harbors?
– What are the technologies and resources available to assist in addressing these issues and challenges?
] The methods used in the study included:
– Conducting a Hawai‘i baseline conditions study by reviewing current literature provided by the State of
Hawai‘i, visiting six DOT harbors and three DLNR small boat harbors, and conducting interviews with cruise
lines, port traffic managers, security clearance officers, cruise terminal operators, and DHS officers;
– Reviewing initial findings with the State to identify the focus areas for the best practices study;
– Analyzing global literature trends to identify relevant practices;
– Conducting international port research to document specific practices that may be useful to the State of
Hawai‘i in its policy decisions and setting of priorities in the future; and
– Providing comparative analysis, to the degree possible, that identifies gaps between current practices in
Hawai‘i and best practices identified elsewhere.
] Eight best practice focus areas (and 24 best practice topics) were identified during field
visits and interviews as the basis for this study:
– Tariff System Structures
– Traffic Management Procedures and use of IT Systems Solutions
– Infrastructure Modernization Approaches
– Modernization Financing Approaches
– Security Management and Technologies
– Environmental Impact and Energy Conservation
– Cruise Industry Marketing
– Tourism Training and Community Relations

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Key Highlights of the Best Management
Practices

] Tariff System Structures

– Methods for recovering the high costs of security
– Cruise industry bundled fees for simplified billing and collections processes
] Traffic Management Procedures and use of IT Systems Solutions
– First-come, first-serve scheduling practices and forms of prioritization
– Integrating operational, fiscal and security management systems for good IT ROI
] Infrastructure Modernization Approaches
– Modern multi-purpose and/or dedicated cruise industry facilities
– Piers and terminals readiness for increased vessel size and passenger counts
] Modernization Financing Approaches
– U.S. Federal financing opportunities for security, transportation, energy, engineering and environmental components of
comprehensive master plans
– US DOT MARAD MOU as technical, administrative, and fiscal resource for past, present and future projects
implementation
] Security Management and Technologies
– IT integration of databases of record and security systems for both on-site and remote command and control center
monitoring capabilities
] Environmental Impact and Energy Conservation
– Water quality monitoring alternatives for recreational user safety
– Emissions audits and real-time air-quality monitoring solutions
– Ship building advances in fuel alternatives and emissions and waste disposal – major lines retrofitting for cold ironing
] Cruise Industry Marketing
– Cruise line associations as principal marketing allies
] Tourism Training and Community Relations
– Training courses for tourism leadership that focus local history, culture and environmental concerns of the community
– Publications – press releases, newsletters, annual reports focused on the community’s concerns

ICF International 38 Icfi.com

Overall Key Findings of Hawai‘i Cruise Study

] Direct costs of cruise tourism are less than $3.3 million per year: The study found that the direct costs of cruise tourism
statewide, including the impacts on air quality, airports, state parks, ports and harbors, and vehicle trips, total less than $3.3
million per year. The cruise industry imposes other costs to the state, but because of data limitations the study team was not
able to estimate dollar values for these costs. These impacts have been described in depth in other modules of the study.
] Direct benefits of cruise tourism are $475.4 million per year: The cruise industry provides direct benefits to the state in
the amount of $475.4 million on average per year. This benefit stems from the increase in economic activity generated by the
cruise industry, as measured by GRP.
] The cost-benefit analysis shows a net benefit of the cruise industry for the state: The study found that the estimated
benefits of the cruise industry exceed the estimated costs for the state as a whole.
] The islands do not benefit equally from the cruise industry: Honolulu County and Hawai‘i County show a large net
benefit from the cruise industry under all scenarios examined, whereas Kauai County and especially Maui County show
different levels of benefit under different assumptions. Kaua’i County benefits from the cruise industry so long as 16.7
percent of cruisers are exclusive cruisers who would not otherwise come to Kaua’i and stayed in land-based
accommodations. Maui County requires the highest— 51.8 percent to be exclusive cruisers. On the other hand, Honolulu
County and Hawai‘i County show the opposite trend of Maui and Kauai—even if 0 percent of cruise visitors were exclusive
cruisers, the cruise industry still represents a net benefit.
] Why Maui is different: A key component of the cost-benefit analysis is the unrealized economic benefits (or “opportunity
costs”) from the cruise passengers who we assume would have stayed in land-based accommodations in the absence of a
cruise industry. These large, unrealized economic benefits of land-based accommodations are included in the “costs” column
in the cost-benefit analysis for the cruise industry. These are higher for Maui because Maui benefits from the largest increase
in GRP per land-based visitor of all the counties and the second highest volume of tourism from non-cruise tourists after
Honolulu County.
] Hawai‘i is a strong visitor destination, but trails others as a cruise destination: Visitor demand for Hawai‘i is strong
(71% of US mainland travelers are extremely or very interested in visiting Hawai‘i) but their interest in Hawai‘i as a cruise
destination trails other cruise destinations (Caribbean/Eastern Mexico, Alaska, Bahamas, and Bermuda). Still, demand for
cruising in Hawai‘i grew by 22% from 2002-2005 (coinciding with the NCL America entry to the market).
] Uncertain future for cruise industry in Hawai‘i: The future of cruising in Hawai‘i is uncertain. Using best available
information the study team predicts that U.S.-flagged cruising to Hawai‘i will stay constant at the lower level seen in 2008,
and there will be no substantial increase in foreign-flag ships in the short-term, but there will be long-term growth that is
lower than the North American cruise market average. This translates into a projection of a net average annual growth rate in
total Hawai‘i cruise passenger volume of 1.29% over the 2009 - 2018 period.

ICF International 39 Icfi.com

 Mahalo!

For access to the full-length Hawai‘i Cruise Study reports,

please contact the Hawai‘i Tourism Authority at (808) 973-2255.

For further information, please contact:

Alyson Greenlee
ICF International
394 Pacific, 2nd Floor
San Francisco, CA USA 94111
Phone: (415) 677-7139
e-mail: agreenlee@icfi.com