Home Town Pride
June 21, 2005
Until recently, it had been fifty years since a U.S.-flagged passenger ship was built; even the cruise ships owned by and constructed for home-grown companies like Carnival and Royal Caribbean are registered with foreign flags. Yet, in a bold attempt to corner the Hawaiian cruise market, Norwegian Cruise Line christened on June 17th, 2005 the Pride of America, a U.S.-flagged cruise ship that will give a whole new meaning to the term Pacific Island Hopping.
Most ships owned by American companies are registered in places such as the Bahamas, Panama, or Liberia off the west coast of Africa. This allows cruise ships to not only generate more revenue by operating casinos—facilities prohibited on U.S.-flagged cruise ships—but also to cut costs by circumventing U.S. minimum-wage requirements and labor laws. (One U.S. law that foreign-flagged ships will not be circumventing while traveling in U.S. waters is the Americans with Disabilities Act. See the March 2nd and June 7th "Cruise News" articles for more information.) Yet there are disadvantages to operating a foreign-flagged cruise ship, especially when regarding Hawaii, and Norwegian Cruise Line is hoping to capitalize on the charm of its new American beauty. Under the Jones Act, a Federal law passed in 1917 by Congress and Pres. Woodrow Wilson, foreign-flagged passenger ships are prohibited from traveling between two contiguous U.S. ports. What that means is only foreign-flagged cruise ships arriving from foreign ports, or arriving from mainland ports which also include a stop in non-U.S. territory, would be permitted to anchor on U.S. soil.
That isn't a big deal in popular cruise destinations such as the Caribbean, where the plethora of island nations, as well as South America and Central America, are only a stone's throw away from one another. But in Hawaii, where the closest foreign port is over 1,200 miles away, having a foreign-flagged vessel poses a bigger problem.
Norwegian Cruise Line, the third-largest cruise line in the cruise industry after Carnival and Royal Caribbean, which occupy the number one and two spots, respectively, is willing to put up with the stricter U.S. laws so that it doesn't have to go out of its way to stop at a foreign port of call. Being that the Pride of America is U.S.-flagged, it could, for example, head out on a roundtrip cruise from Honolulu, or start in Los Angeles and end in Hawaii's capitol.
Although the Pride of America is the first U.S.-flagged cruise ship built in fifty years, it is actually Norwegian Cruise Line's second U.S.-flagged ship, the first being the Pride of Aloha, a ship which was originally registered as a foreign-flagged vessel before NCL went through the exhaustive process of re-registering it under a U.S. flag. It has already been navigating the Pacific waters around Hawaii and has been doing very well in the market. "I think we've proved successful with Aloha, as far as bookings are concerned," NCL spokeswoman Heather Krasnow said. "There's definitely a market for it. It's not as much of a gamble this year as it was last year."
Actually, one of the biggest gambles with both Pride of Aloha and Pride of America is that there's no gambling allowed onboard. Since both ships are US-flagged vessels, NCL is not able to operate a casino onboard. Casinos are huge sources of onboard revenue on a cruise ship, yet NCL is hoping that the unique Hawaiian itineraries will draw such a high volume of people to their ships that they'll act as a financial counterbalance to the revenue they won't be getting from a roulette wheel.
With the advent of these cruise ships, NCL could see itself inching closer to the two biggest cruise lines in the world, Royal Caribbean and Carnival, which occupy the number two and one spots, respectively. Still, some cruise industry analysts believe that it's only a matter of time before Royal Caribbean and Carnival follow suit with their own U.S.-flagged ships. Until then, however, only NCL is able to deliver travelers to such a completely unique Aloha state of mind.
