Carnival Cruises enjoyed a pretty good run prior to the September 11, 2001 terrorist attacks. The company held 32% of the overall market, making it the largest cruise line in the world. As a result of the terrorist attacks cruise lines were forced to offer deep discount, which hand an impact on the bottom line. Bookings were down along with profit. This scenario was all too familiar to Carnival Cruises.
In the beginning Carnival had struggled, but begin to gain popularity, by appealing to clientele with various activities and entertainment. These mere changes would spark a new development shifting the cruise industry forever.
Throughout the 80's Carnival remained ahead of its peers, maintaining a growth of 30 %, an in 1988 Carnival acquired Holland American Line. By obtaining Holland American, Carnival would now have a different brand of customers, given Holland American focus was higher income customers, Carnival could continue its growth in a new market.
Carnival purchased another rival in 2001 stock holders accepted Carnivals offer to purchase Princess Cruises. This particular encounter was a exceedingly important victory for Carnival. Royal Caribbean had made a counter offer, if they were to obtain, the Princess Cruise line it could mean trouble for Carnival. This merger would make Royal Caribbean the more prevalent player, in the cruising industry. By Carnival acquiring Princess Cruises it gave them the needed edge on their competition.
As a result of the mergers Carnival was able to direct their attention to their consumer base, offering something for everyone. Primary focus was placed on three segments, which consisted of contemporary, premium, and luxury conveniences, each subdivision having its own signature amenities. More focus was placed o advertising. The companies advertising and marketing goals paid off. Carnival remained innovative by continuous reinvention of their cruise lines.
However going forward the industry on a whole expected to see more consolidation. There remained challenges as it relates to marketing, competition and rising industry volume. In closing the North American market has barely been tapped, with more focus on the North American Market, can Carnival continue to grow? Can they reduce operating costs and still remain profitable? Is cutting prices a sure way to increase customer base?
Carnival Cruise Lines takes pride in being the “World’s Most Popular Cruise Line”. Growing from one converted ocean liner in 1972 to a fleet of 22 modern cruise ships today, the line has been an outstanding success. Indeed, without it there would have been no Carnival Corporation, the largest firm in the cruise business and parent company of Holland America, Curnard, Princess, P&O and several other major lines. Passengers tend to be mostly Americans of diverse middle class backgrounds.
A significant number of the ships spend part of the year home-ported away from the traditional cruise ports of Florida and those ships tend to attract people from those communities. Also, the type of passenger varies with the length of the cruise. Short cruises tend to attract younger passengers while longer cruises attract older passengers. The basic strategy underlying Carnival Cruise Lines success was to provide guests with a fun vacation. In many ways, that still remains the line’s philosophy. It is a light hearted experience.
At the same time, Carnival maintains a high standard. It is not five-star luxury (with the exception of the specialty restaurants which are on a level with the best at sea) but it is a good quality product. Moreover, while there may be a ten foot statue of Frankenstein in the disco, there is also an elegant New York supper club on the same ship. Fun comes in many varieties. History
40 YEARS OF FUN: A HISTORY OF CARNIVAL CRUISE LINES
Carnival Cruise Lines is the most successful cruise line in the world, carrying more passengers than any other. But the Carnival of today is a vastly different company than the one started from humble beginnings more than three decades ago. Carnival was launched with a converted transatlantic ocean liner and a dream of entrepreneur Ted Arison, a pioneer in the modern-day cruise industry who set out to realize his vision of making a vacation experience once reserved for the very rich accessible to the average person. The rest, as they say, is history. THROUGH THE YEARS…
1972Maiden voyage of Carnival’s first ship, the TSS Mardi Gras, which runs aground on sandbar outside the Port of Miami 1975Carnival purchases Empress of Britain, enters service as the TSS Carnivale 1978The Festivale, formerly the S.A. Vaal, undergoes $30 million refurbishment, begins service for Carnival as the largest and fastest vessel sailing from Miami to the Caribbean 1982Debut of the Tropicale, the first new cruise ship the cruise industry has seen in many years; ship marks the beginning of an industry-wide multi-billion-dollar shipbuilding boom 1984Carnival becomes first cruise line to advertise on network T.V. with the premiere of new advertising campaign starring company spokesperson Kathie Lee Gifford (then Johnson) 1985Debut of 46,052-ton Holiday
1993Carnival introduces its third 70,367-ton SuperLiner, Carnival Sensation 1994Debut of 70,367-ton Carnival Fascination. Carnival’s parent company renamed Carnival Corporation to distinguish between it and its flagship brand, Carnival Cruise Lines.