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San Diego
Thursday, May 23, 2024

Could Port Say Bon Voyage to Hawaiian Cruises?

The sun would likely set on the West Coast’s Hawaii-bound cruises if a controversial federal rule governing port calls is changed.

And while it would impact the state’s ports, it would hurt Southern California in particular since most Hawaiian cruises sail from San Diego or Los Angeles.

The 122-year-old Passenger Vessel Services Act requires that foreign-flagged ships destined from one U.S. port to another must first stop at a foreign dock.

Most of the nation’s cruise lines fly foreign flags to avoid the higher costs and restrictions

associated with sailing under the U.S. flag.

Most Hawaii-bound vessels leaving San Diego dock briefly in Baja California, Mexico.

The proposed change, sought by a U.S.-flagged operator of inter-island Hawaiian cruises, would mandate that all foreign-flagged Hawaii-bound ships departing California spend at least 48 hours, or a third of the trip, docked at a foreign port.

If the change takes effect, it would force operators to extend cruises a week or more, which experts say would make cruises very difficult to book.

The controversy has already prompted one line to change its itinerary and another is expected to follow suit.

Rita Vandergaw, marketing director for the San Diego Unified Port District, says Royal Caribbean Cruises Ltd. will cut its Hawaii departures from eight to five in 2009. It also plans to reroute the Monarch of the Seas to South America in October.

She also expects Holland America Line Inc. will cut some of its 18 yearly cruises to Hawaii, but she’s not sure how many.

Flying Foreign Flags

Royal Caribbean, Celebrity Cruises Inc. and Carnival Corp. , which owns the Holland America, Carnival and Princess lines , serve San Diego and fly foreign flags.

The decision on the rule change, which rests with the federal Department of Homeland Security, could come within a few weeks.

“Customs border protection is not the issue. The issue is protecting the American-flagged cruise line,” Vandergaw said, referring to Norwegian Cruise Lines America Inc.

Last year, 22 cruises sailed from San Diego to Hawaii. She declined to estimate how much revenue the local economy might lose if the rule change is approved.

For fiscal 2007, the port said revenue from maritime operations was $37.7 million, an increase of 9 percent from 2006.

According to a 2004 economic impact study , the latest data available , the port’s cruise line industry accounted for $163 million in direct spending, $38 million in wages and 1,000 jobs.

Miami-based Norwegian does not operate service from San Diego or Los Angeles to Hawaii.

Instead, it operates inter-island cruises that cater to passengers who fly to Hawaii. The line maintains that its business is struggling amid competition from lower-cost, foreign-flagged ships leaving West Coast ports.

Norwegian issued a statement saying its request is aimed at achieving the goal of the Hawaii Cruise Ship Initiative, which was passed by Congress in 2003.

That initiative, backed by the very influential Sen. Daniel Inouye, D-Hawaii, sought to revive the U.S.-flagged passenger cruise ship industry amid a downturn in worldwide tourism following the terrorist attacks of Sept. 11, 2001.

Vandergaw said the rule change “would be a dangerous precedent” and that both California and Hawaii could lose tourism business as a result.

Port Commissioner Steve Cushman, who chairs the agency’s Maritime Advisory Committee, said he thinks “cooler heads will prevail” and the proposed change will not be approved.

The Los Angeles Business Journal, a sister publication, contributed to this story.


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