Hawaii Cruise Study FINAL REPORT

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Hawaii Cruise Study FINAL REPORT

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Title: Hawaii Cruise Study FINAL REPORT

1
Hawaii Cruise StudyFINAL REPORT

Prepared for
The State of Hawaii
Prepared by
ICF International
December 2008

2
Hawaii 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 Hawaii 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
Hawaiiincluding four agencies led by the
Hawaii 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. They can be
accessed on the project web portal using
Username GUEST (case-sensitive use all caps)
Password hawaiicruise. https//quickplace.icfcon
sulting.com/hawaiicruisestudyicf
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.

3
Hawaii Cruise StudyTwo-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 Hawaii
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. Kauai County benefits from the
cruise industry so long as 16.7 percent of
cruisers are exclusive cruisers who would not
otherwise come to Kauai 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 Hawaii County
show the opposite trend of Maui and Kauaieven 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 Hawaii. However, the study could not
specifically measure the direct revenues to each
county versus the direct costs of the industry in
each county.
Hawaii is a strong visitor destination, but
trails others as a cruise destination Visitor
demand for Hawaii is strong (71 of US mainland
travelers are extremely or very interested in
visiting Hawaii) but their interest in Hawaii
as a cruise destination trails other cruise
destinations (Caribbean/Eastern Mexico, Alaska,
Bahamas, and Bermuda). Still, demand for cruising
in Hawaii grew by 22 from 2002-2005 (coinciding
with the NCL America entry to the market).
Uncertain future for cruise industry in Hawaii
The future of cruising in Hawaii is uncertain.
Using best available information the study team
predicts that U.S.-flagged cruising to Hawaii
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 Hawaii cruise
passenger volume of 1.29 over the 2009 - 2018
period.

4
Contents of this ReportThis PowerPoint report is
an executive summary of the key findings of the
Hawaii 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 Hawaii Cruise Study
For More Information

5
Introduction, Objectives, and Overview of the
Hawaii Cruise Study

Objective 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 Hawaii in 2007 and
projected out to the year 2018.
Purpose 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
Hawaiiincluding four agencies led by the
Hawaii 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 They can be
accessed on the project web portal using
Username GUEST (case-sensitive use all caps)
Password hawaiicruise. https//quickplace.icfcons
ulting.com/hawaiicruisestudyicf

The study was conducted in 13 modules
Module 1 Assessment of the Cruise Industry Mod
ule 2 Assessment of Hawaiis Cruise Industry
Module 3 Impact on the Economy
Module 4 A Impact on Harbor and Port Facilities
Module 4 B Impact on Public Roads, Streets, and
Highways Module 4 C Impact on Community Infrast
ructure Module 5 A Impact on Marine Environment
Module 5 B Impact on Air Quality Module 5 C
Impact of Cruise Passenger Onshore Activities
Module 6 Impact on Heritage Sites
Module 7 Cost-Benefit Analysis
Module 8 Comparison with On-Shore
Accommodations Module 9 Best Management Practice
s
6
The Stewards of the Hawaii Cruise Industry
StudyThis 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. Carol Pregill, President, Retail Merchants
Hawaii Mr. Patrick Shaw, Hawaii Representative,
Northwest CruiseShip Association
Mr. John Strom, Enterprise Honolulu (Oahu's
Economic Development Board) Mr. Neil Takekawa, Vi
ce President of Sales and Marketing, Hawaii
Superferry (Formerly President, Roberts Hawaii
Tours) Ms. Miwa Tamanaha, Executive Director, KAH
EA 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, Kauai County Mr. Roy Tokujo, Presid
ent, Cove Entertainment Mr. Murray Towill, Presid
ent, Hawaii 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 Hawaii Mr. Alan Yamamoto, Vice Preside
nt, Hawaii Operations, NCL America
Ms. Mattie Yoshioka, President and CEO, Kauai
Economic Development Board, Inc.

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, Oahu
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, Kauai
Visitors Bureau
Ms. Leimomi Khan, President, Association of
Hawaiian Civics Clubs
Mr. Harry Kim, Mayor, Hawaii 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. Kuuhaku Park, Government Public Affairs
Manager, Horizon Lines - Honolulu

7
Approach Key Findings of Each Module of the
Hawaii Cruise Study
Modules 1-9
8
Module 1 Assessment of the Cruise
IndustryApproach
The 3 Companies that Dominate the Cruise Market,
and Others

Overview of the Global Cruise Industry, including
History, Key Players, Key Trends, Technologies,
Industry Outlook, and Discussion of Cruising and
Impacts on Select Cruise Destinations Competitive
with Hawaii.
Conducted over 50 interviews with cruise industry
and destination stakeholders, and did exhaustive
review of secondary research and literature
focusing on those issues and activities that are
most important and relevant to Hawaii.

9
Key Findings on Assessment of the Global Cruise
Industry

Key Trends
Worldwide passenger growth
A plethora of new ships
Ever bigger vessels
New destinations
The growth of US homeports
Something for everyone
New source markets
Outlook and Observations
The appeal and growth of cruising show no signs
of abating.
The outlookbarring a major accident or
catastrophe at seais for continued growth from
both US and international source markets
A wide range of issues and impacts have developed
as a result of the growth of cruise tourism

The Trend in Annual Worldwide Cruise Passenger
Growth
Passengers of CLIA member lines.Source CLIA
10
Module 2 Assessment of Hawaiis Cruise
IndustryApproach

History, Market, Outlook, Growth Projections, and
Regulatory Framework for the Hawaii Cruise
Industry
Drew on Menlo Consulting Groups proprietary
TravelStyles data on American and Canadian
outbound travelers to profile the Hawaii cruise
market and demand outlook.
Researched and reported on the regulatory
environment for cruising in Hawaii, including
all authorities and jurisdictions applicable to
cruise industry in Hawaii.
Conducted over 25 interviews with key cruise
lines, visitor bureaus, and other authorities in
Hawaii applicable to the cruise industry in
order to document the industrys development and
project future growth out to the year 2018.

Most Appealing Place for Next Cruise among Past
Cruisers
Source CLIA. 2006 Cruise Market Profile.
11
Key Findings on the Projected Future Growth of
Hawaiis Cruise Industry

Visitor demand for Hawaii is strong 71 of US
mainland travelers are extremely or very
interested in visiting Hawaii.
But Hawaii trails others as cruise destination
The Caribbean/Eastern Mexico, Alaska, Bahamas,
and Bermuda all surpass Hawaii as the most
appealing place for next cruise among past
cruisers.
Still, demand for cruising Hawaii grew by 22
from 2002-2005 This coincided with NCL America
entry to the market.
U.S.-flagged cruising to Hawaii will stay
constant at the lower level Likely to remain
constant at 1 ship, with possibility for another
ship to return, probably no earlier than 2010.
Foreign-flag cruising will grow, but slower than
the North America average There will be no
substantial 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 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
Hawaii cruise passenger volume over 2009 -
2018.

Actual and Projected Total Hawaii
Cruise Passenger Volume
(1996 to 2018)
12
Module 3 Impact on the EconomyApproach

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

13
Key Findings on Economic Impact

Gross Regional Product In 2007 the Hawaii
cruise industry added close to a billion dollars
(about 973 million) to the states gross
regional product, the most comprehensive measure
of regional economic activity. This represents
about 1.56 percent of the states 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 Hawaii economy
(including direct, indirect and induced jobs).
Disposable Income Disposable income for Hawaii
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.

Impact of Cruise Industry on Gross Regional
Product (GRP), by County, 2007-2018
14
Module 4A Impact on Ports and HarborsApproach

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.

15
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
Hawaii harbors.
Harbor Usage and Waterside Infrastructure Severe
weather conditions combined with channel
navigation issues at Nawiliwili 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
Nawiliwili 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 Nawiliwili 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 Hawaiis ports
and harbors in the future.

16
Module 4B Impact on Roads and HighwaysApproach

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.

17
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.

18
Module 4C Impact on Community InfrastructureAppr
oach

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 DBEDTs 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.

19
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 Hawaii 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.

20
Module 5A Impact on Marine EnvironmentApproach

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 Hawaii 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 Hawaii,
including the Hawaii 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 Hawaii (DOT) Harbor Managers for
Hilo, Kahalui, and Nawiliwili
Interview with Hawaii 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 Hawaii 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.

21
Impact on Marine Life
22
Impact on Corals
23
Impact on Water Quality
24
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.

25
Module 5B Impact on Air QualityApproach

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 residents 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.

26
Key Findings on Potential Human Health Impacts
Short-term, worst-case ambient air pollutant
concentrations attributable to cruise industry
air emissions can potentially exceed health-based
ambient air quality standards for
PM2.5 and PM10 near 3 of Hawaiis 6 cruise ship
ports NO2 near all 6 ports (though it should be
noted that the short-term NO2 standard used in
this analysis is the most stringent California
standard and does not apply to Hawaii)
The analysis screened out the potential for
exceedances of SO2 or CO standards at all ports.
The highest concentrations resulting from cruise
industry-related emissions were predicted at the
Nawiliwili port, followed by Honolulu and
Lahaina.
Results of Screening Analysis for Air Pollutants
from Cruise Industry Sources Plus Ambient
Background Concentrations at 6 Ports in Hawaii
Blue shading indicates that the top range results
are above the most stringent standard.
27
Key Findings on Economic Costs of Cruise Ship Air
Emissions

The estimated damages from cruise ship air
emissions statewide in 2007are 14,000.
The highest single-port damage values were
estimated for Kailua-Kona (5,000 in 2007),
followed by Honolulu (3,100 in 2007).
Cruise ship air emissions are estimated to cause
relatively low economic damages in Hawaii when
looked at on an annual basis. This is because
The short-term, worst-case conditions examined in
the Potential Human Health Impacts Analysis occur
for a relatively small portion of the time on an
annual basis
Hawaiis climate features relatively strong
winds for a large portion of the time, and
Due to Hawaiis geographic and demographic
configuration and predominant wind directions, a
large portion of air pollutants emitted in
Hawaiis cruise ship ports are advected out to
sea and away from human receptors.

Total Current and Projected Statewide Economic
Costs of Cruise Ship Air Emissions
28
Module 5C Impact of Cruise Passenger Onshore
ActivitiesApproach

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 Hawaii 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 Hawaii by multiplying the estimated
cruise passengers visiting state parks on each
island by 1.33 (the estimated state park expense
per visitor in 2007).

29
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
2007but 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.

30
Module 6 Impact on Heritage SitesApproach
Heritage Sites Included in the Analysis

Heritage sites are sites where visitors will
experience the history and culture that comprise
the pre-contact and post-contact population of
Hawaii.
Identify heritage properties that cruise
passengers visit.
Determine impacts (negative or positive) of
visitation from cruise ship passengers.
Approach for selecting heritage sites included in
analysis
Heritage sites within ¼ mile of disembarkation
Heritage sites to which commercial tours operate
and for which responses to data requests were
available.
Methods for data collection
Site census on ship day vs. non-ship day
Interviews with site managers/shop owners
Data from tour company
Heritage site guest logs.

30
31
Key Findings on Impact on Heritage Sites
Site census data for six select sites show that
numbers of visitors on ship days was more than
double for non-ship days. Overall data show that
cruise ship passengers represent a small
percentage of overall visitors to heritage
sites. The greatest impact is in overcrowding dur
ing peak periods at sites with organized tours,
with pulses that average 30 minutes or less.
However, site managers interviewed do not report
any visible physical degradation that results
from the surges. Sites within ¼ mile walking dist
ance of port do not exhibit overcrowding,
although cruise passengers represent an overall
increase.
Site Census Data Collected on Cruise Ship Days
vs. Non-Cruise Ship Days
31
32
Module 7 Cost-Benefit AnalysisApproach

The cost-benefit analysis is designed to answer
Do the benefits of the cruise industry in Hawaii
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 scenario in which the cruise
industry did not exist in Hawaii.
Therefore, it is important to understand that
this CBA not only considers the costs and
benefits of the cruise industry, but also
includes the costs and benefits that would have
been incurred if cruise visitors had stayed in
land-based accommodations in the hypothetical
absence of the cruise industry.
When calculating the benefits of the cruise
industry, we consider both
The benefits of the cruise industry on the
states economic activity and
The unrealized costs that reflect the avoided
impacts on Hawaii because cruise visitors did
not stay in land-based accommodations.
On the other hand, when calculating the costs of
the 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 studys other modules into a single
evaluation.

Components of the Cost-Benefit Analysis
33
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 Hawaii
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. Kauai County benefits from the
cruise industry so long as 16.7 percent of
cruisers are exclusive cruisers who would not
otherwise come to Kauai 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 Hawaii County
show the opposite trend of Maui and Kauaieven 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 Hawaii. However, the study could not
specifically measure the direct revenues to each
county versus the direct costs of the industry in
each county.

34
Summary of the Cost-Benefit Analysis
Net Present Value of the Cruise Industry by
Island
(in Thousands)
These numbers represent 2009-2018 averages with
7 percent discounting. Totals may not add because
of rounding.
35
Module 8 Comparison with On-shore
AccommodationsApproach

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).

36
Key Findings in Comparison of Cruise with
On-shore Accommodations
Economic output Hotel output was about 150 of
cruise statewide. On Oahu 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 Oahu, hotels jobs
still more than cruise but less gap (140).
Kauai had greatest gap hotel jobs were 270 of
cruise jobs. Earnings Hotel-related earnings abo
ut 230 of cruise. On Oahu, gap was about 140.
On NIs, 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 Oahu, the gaps were narrower (hotels
were 110-130 cruise). Greatest gaps were on
Kauai, where the hotel impacts were 250 to 780
of the cruise figures for various utilities.
Statewide Cruise-Related Utilities Usage, 2007
37
Module 9 Best Management PracticesApproach

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
Hawaii 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 Hawaii baseline conditions study by
reviewing current literature provided by the
State of Hawaii, 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 Hawaii 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 Hawaii 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

38
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

39
Overall Key Findings of Hawaii 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 Hawaii
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. Kauai County benefits from the
cruise industry so long as 16.7 percent of
cruisers are exclusive cruisers who would not
otherwise come to Kauai 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 Hawaii County
show the opposite trend of Maui and Kauaieven 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.
Hawaii is a strong visitor destination, but
trails others as a cruise destination Visitor
demand for Hawaii is strong (71 of US mainland
travelers are extremely or very interested in
visiting Hawaii) but their interest in Hawaii
as a cruise destination trails other cruise
destinations (Caribbean/Eastern Mexico, Alaska,
Bahamas, and Bermuda). Still, demand for cruising
in Hawaii grew by 22 from 2002-2005 (coinciding
with the NCL America entry to the market).
Uncertain future for cruise industry in Hawaii
The future of cruising in Hawaii is uncertain.
Using best available information the study team
predicts that U.S.-flagged cruising to Hawaii
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 Hawaii cruise
passenger volume of 1.29 over the 2009 - 2018
period.