American Hawaii Cruises has launched a major new early booking discount program, is entering the all-land vacation market for the first time and has expanded its three- and four-day cruise-resort packages to almost half its berths next year.

The two-ship cruise line, which was confronted with its first major competition when Aloha Pacific Cruises entered the seven-day Hawaii market in October, will also respond to the challenge by advertising on nationally syndicated TV in 1989 that could blanket American households.

Executive Vice President Gene Ferretti said that American Hawaii "will spend several million dollars and about one-third of our total promotional budget on TV advertising" in 1989 in an attempt to broaden the cruise line's traditional passenger base.

"We started moving into spot TV in 1988 by saturating our strongest regional 13 markets and decided to try to reach those other household that aren't that familiar with our product," Ferretti said. "We'll be on shows like Donahue and Oprah Winfrey during the first and third quarters of the year to try and reach that large number of Americans who haven't seen our commercials yet."

New Management is Stimulus

Although Ferretti noted that the San Francisco-based cruise line's aggressive promotional campaign "started from virtually zero" almost a year ago, he maintained that the entry of the 600-passenger Monterey in the seven-day Hawaii market "had very little to do with American Hawaii's decision to upgrade its image and to push to get our message across."

Ferretti stressed that the change of ownership at American Hawaii last year was the real stimulus behind the cruise line's widespread change from limited advertising to a far more aggressive and visible promotional campaign.

"The new management team realized very quickly that it would be necessary to improve our image and the first step was to hire the San Francisco office of the J. Walter Thompson advertising agency," Ferretti noted. "Then we worked out a three-pronged approach to get away from price-driven newspaper advertising b concentrating on spot TV advertising first, then major magazines and then expanding our advertising in the trade press."

Ferretti said that J. Walter Thompson worked out a plan to help American Hawaii "saturate our 13 strongest markets with spot TV ads for a six weeks at the beginning of the year and then we added six more regional markets during the summer noted that the theme of the TV campaign was that passengers "Don't Miss A Thing" by cruising between the islands because American Hawaii's two ships call at Hawaii's major tourist stops.

Saturation Advertising

"The key to the spot TV advertising campaign was 'saturation' and we went into the 'early fringe times' of 7 to 9 a.m. and 5:30 to 7:30 p.m. with high frequency to pound our message across that cruising is a very economical way to see Hawan, Ferretti said.

Ferretti added that the cruise line then began to advertise in such "upscale" magazines as Smithsonian, Better Homes & Gardens, Gourmet, Bon Appetit, Sunset and Travel and Leisure to help revise its image as a more luxurious product. He said that American Hawaii also began advertising on Cable Network News, the Travel Channel and the Discovery Channel.

Ferretti also said that American Hawaii will continue its spot TV commercials in its 13 top regional markets in 1989 to "reinforce the inroads we've made with our image building in our traditionally strong markets." He said those markets were: Los Angeles, San Francisco, San Diego, Phoenix, Dallas, Chicago, Detroit, Cleveland, Atlanta, Tampa, Philadelphia, New York and Boston.

Six Free Hotel Nights

American Hawaii greatly expanded its traditional early booking discount program to up to six free hotel nights in Waikiki in 1989, Ferretti said, for full payment 90-days before departure during the four-month off-peak season. Ferretti said that the discount applies to the top seven of the 12 cabin categories on either the 800-passenger Constitution or the 786-passenger Indspendence.

Ferretti said that the cruise line is also promoting a series of free two- and three-night hotel pre- and post-cruise hotel stays in either Waikiki or Maui for full payment 90-days before departure in various high-range cabin categories. He noted that some discounts include a free rental car and free inter-island air service and that passengers can choose shipboard credit of up to $500 per cabin in lieu of the land stays.

American Hawaii will also expand the number of berths that the cruise line will market as three­- and four-day sailings in its weekly land/sea packages, Ferretti said, to about 47 percent of the 771 berths sold on both ships each week. He noted that the three- and four-day cruises will be expanded to the Independence in January after the weekly packages were introduced to the Constitution last May "to target younger couples with limited vacation time."

Ferretti also said that American Hawaii will move into the land-vacation market in January when newly created American Hawaii Vacations will market land-only stays of three-or more nights at 27 hotel properties on Oahu, Maw, Kauai and Hawaii.

Land Only

Ferretti explained that American Hawaii had laid the basis for expanding into a land-only program by expanding its pre- and post-cruise hotel packages earlier in the year from just two hotel properties to 15 hotels and condominiums on Oahu, Maui, Kauai and Hawaii. He said that both the cruise and the land-only divisions should be able "to feed each other" and that American Hawaii's sales force will sell both products.

American Hawaii also prepared for its new competition earlier when it spent a total of $15 million to refurbish both the Independence and the Constitution earlier this year with newly decorated cabins, all-new showrooms, renovated public lounges and all-new carpeting. Aloha Pacific's entry into the Hawaii market has also been followed by two lawsuits by American Hawaii and the American Maritime Officers Service to prevent the start-up cruise line from operating in Hawaii under the Jones Act.