A year ago the cruise industry was on a rapid rise in Hawai'i, with the addition of NCL America's third home-ported ship here.

But now the largest player in Hawai'i's cruise industry appears to be in flux. Following NCL Corp. losses largely blamed on its Hawai'i operations, the company has said it's shifting its largest and newest U.S.-flagged Hawai'i ship to Europe. And yesterday, it confirmed that NCL America's executive vice president and managing director of Hawa'i operations, Robert Kritzman, is leaving the company.

Still, those in the tourism industry say the cruise industry remains a vital part of Hawai'i's economy. Some vendors say any void from losing a cruise ship will be made up by other cruise lines or markets.

Kritzman yesterday said he decided to leave the company for "personal reasons" and declined to elaborate. He said he and his family plan to move back to Florida, but are also looking at options in Hawai'i as well.

Kritzman, who has been with NCL since 1990, said his last day will likely be at the end of June.

"It's probably a good time to try something different," Kritzman said yesterday. "And right now the operation itself, meaning the product delivery, is fairly smooth and it seemed like a point in time that made sense."

Kritzman is being replaced by Alan Yamamoto, who previously was with Hawaiian Electric Industries, where he served as director of community and government relations, said NCL Corp. spokeswoman AnneMarie Mathews. Yamamoto, who joins NCL America as vice president of Hawai'i operations, has also worked for U.S. Rep. Neil Abercrombie.

Mathews said Yamamoto joined the company Wednesday but would have no immediate comment. She said there are no other Hawai'i-related changes at this time.

Kritzman oversaw the addition of three U.S.-flagged ships here and has had his share of challenges since the company's shaky start-up in Hawai'i.

The first ship, the Pride of Aloha, began its interisland tours in 2004 and quickly received a barrage of complaints about service aboard several cruises.

Recruiting and retaining workers have also been tough for the company, which is operating under the federal requirement that at least 75 percent of crew on a U.S.-flag ship be U.S. citizens.

The Miami-based NCL Corp. had been suffering losses and said profits were being dragged down by its Hawai'i operations.

In April, the company announced it was relocating the largest of three Hawai'i-based ships — the Pride of Hawai'i — to Europe early next year.

NO REGRETS

Kritzman said he leaves the company with no regrets.

"We certainly have had our challenges operationally, but things are going well now, and quite frankly it's been a great experience," he said, adding that he and his family have enjoyed living in Hawai'i.

A challenge that remains for NCL is "getting the supply and demand right, which hopefully will happen with two ships remaining in the market," he said.

"It's just a matter of what the market can support in the way of capacity," he said. "The product's being received well by the customers, but it's really just a market-driven issue so far as the one ship leaving at least for the time being."

Jennifer Sabas, Hawai'i chief of staff for U.S. Sen. Daniel K. Inouye, said that after learning of Kritzman's planned departure, "we encouraged" NCL to consider hiring someone from Hawai'i.

"Once the corporate decision was made, it was important that strong consideration be given to somebody who was from Hawai'i to take the company forward in its next chapter ... to really work those relationships on O'ahu as well as the Neighbor Islands, to really embed the only U.S. cruise line as Hawai'i's carrier," Sabas said.

She added that the push for a local successor "had absolutely nothing to do with Mr. Kritzman and the good work that he did."

"We applaud the decision that they made in selecting Alan, and we look forward to working with him," Sabas said.

The cruise ship industry has been seen as a bright spot in Hawai'i's tourism industry, which has experienced a decline in visitor arrivals after several years of boom.

But the company's success here has been dimmed by increasing competition from other cruise lines. The foreign-flagged ships can operate more cheaply than the U.S.-based NCL ships.

Kritzman earlier this year acknowledged that dropping ticket prices added to the challenges of operating here but said the company remains committed to Hawai'i operations.

In mid-May, the Miami-based NCL Corp. cruise ship company announced $60.8 million in losses in the first quarter and largely blamed Hawai'i operations.

EXPECT IMPROVEMENT

NCL Corp. president and chief executive officer Colin Veitch had said earlier this month that measures the company announced since the fourth quarter will help.

Veitch predicted those measures "will collectively result in a significant improvement by the same time next year."

Hawai'i Tourism Authority president and CEO Rex Johnson said he was somewhat surprised to hear about Kritzman's departure.

"But then again, ... whenever companies lose big amounts of money, there are always changes that get made," he said.

"We continue to believe that the overall cruise product is good for Hawai'i," Johnson said.

Big Island tour operator Kapohokine Adventures gets its business primarily from cruise passengers, said co-owner Tony DeLellis.

With next year's pull-out of the Pride of Hawai'i and a temporary shift in schedules for the Pride of Aloha, the three-year-old company for the first time is seek business in additional markets outside the cruise industry.

"Now that the handwriting's on the wall — we're definitely making those moves," DeLellis said.

"I think people realize that we're just going to have to be smarter," he said. "It's not going to be as easy as it was. There aren't the same things to look forward to as far as just the number of visitors increasing exponentially year over year. That's obviously not going to happen as it has been."

But Doug Arnott, owner of Arnott's Lodge and Hiking Adventures on the Big Island, said he believes the void of the Pride of Hawai'i will be filled by other cruise lines.

"Shore excursion vendors are not likely to see any dramatic drop in revenue from the (Pride of) Hawai'i leaving, as other cruise lines are anxious to take up vacated port spots," Arnott said. "I also believe that bad Atlantic hurricane forecasts for this season may provide NCL America and Hawai'i in general with windfall load factors as these things are considered by travelers when booking."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com and Robbie Dingeman at rdingeman@honoluluadvertiser.com.