NCL America was supposed to be Norwegian Cruise Lines (NCL) unique niche. Instead, with softer pricing in some markets and increased competition everywhere, including Hawaii, NCL is being forced to make a course change.

In addition, NCL has not been able to command significantly higher pricing in Hawaii to offset higher labor costs and lower onboard spending without casinos, which are not legal in Hawaiian waters.

Thus, the Pride of Hawaii is leaving Hawaii, at least temporarily, to go to Europe for the summer of 2008. Built in 2006, the 93,000-ton, 2,400-passenger ship is expected to be renamed and reflagged as well as having some modifications done – most likely the addition of a casino.

The cruise industry has the unique advantage over hotels and resorts that they can move their “properties” to markets that produce higher returns.

However, in NCL’s case, the company has spent much time, effort and money not only to build up its Hawaiian business, but also to source, develop and retain American crew. Now, with only two American-flag ships in Hawaii (one foreign- flag ship NCL sails there as well), the crew pipeline is suddenly shrinking, and it is uncertain how that will affect NCL's future needs when and if the ship returns to Hawaii.

Cruise Industry News has estimated the 2008 cruise capacity in Hawaii based on 2007 but with NCL having three ships instead of four.

NCL has been claiming that part of its challenge in Hawaii has been increased competition, but if it reduces its own capacity, it allows the competition a bigger foothold. And what if the competition uses the opportunity to boost its capacity there even further?

Moreover, NCL is pulling out its newest and most attractive ship.

The Pride of Hawaii is leaving Hawaii effective February 2008 and booked guests will receive a $50 onboard credit per stateroom for those who rebook by May 1, 2007 on the Pride of America, Pride of Aloha, or any other ship in the fleet. Guests choosing to cancel will receive a full refund.

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