Carnival Cruise Case
Carnival Corporation (2002)
I. CASE ABSTRACT
In 2002, the biding war between Carnival and Royal Caribbean Cruise Line for the Princess Cruise Line ended. Carnival’s bid of %5.67 billion was accepted by Princess’s management, the war had lasted for almost a year,
Princess had 11.9% market share and Carnival had 31.9% - a potential market share of 53.8%.
After the terrorist attack on New York City and Washington, D.C. on September 11, 2001, customers for cruises dropped out of the market. The 2002 bookings were down 9%. Everyone in the industry was affected and led to several bankruptcies.
Carnival Cruise Lines, Inc. was founded by Ted Arison in 1972. From its inauspicious beginning, Carnival became known for fun-filled Caribbean cruises. Ted retired in 1990 as Chairman. His son, Micky Arison, CEO, then became Chairman. Carnival is considered a “Controlled Foreign Corporation” (CFC), which exempts shipping operations of a corporation from income tax.
Much of Carnival’s success is attributed to its marketing program directed toward the young, fun-seeking, first-time cruiser. One important aspect of the marketing program built upon the ship as the destination rather than some particular port of call. The main advertising theme has been that Carnival Lines is a “Fun Ship.” Carnival has ships for all 4 segments (Luxury, Premium, Contemporary, and Specialty).
Carnival Corporation is considered the leader and innovator in the cruise travel industry. Carnival has grown from two converted ocean liners to an organization with two cruise divisions (and a joint venture to operate a third cruise line) and a chain of Alaskan hotels and tour coaches. Corporate revenues for fiscal 2001 reached $4,535,251,000 and net income of $926,200,000. Carnival has several “firsts” in the cruise industry: first to carry over one million passengers in a single year, and the first to carry five million total passengers. Currently, Carnival’s market share of the
I. CASE ABSTRACT
In 2002, the biding war between Carnival and Royal Caribbean Cruise Line for the Princess Cruise Line ended. Carnival’s bid of %5.67 billion was accepted by Princess’s management, the war had lasted for almost a year,
Princess had 11.9% market share and Carnival had 31.9% - a potential market share of 53.8%.
After the terrorist attack on New York City and Washington, D.C. on September 11, 2001, customers for cruises dropped out of the market. The 2002 bookings were down 9%. Everyone in the industry was affected and led to several bankruptcies.
Carnival Cruise Lines, Inc. was founded by Ted Arison in 1972. From its inauspicious beginning, Carnival became known for fun-filled Caribbean cruises. Ted retired in 1990 as Chairman. His son, Micky Arison, CEO, then became Chairman. Carnival is considered a “Controlled Foreign Corporation” (CFC), which exempts shipping operations of a corporation from income tax.
Much of Carnival’s success is attributed to its marketing program directed toward the young, fun-seeking, first-time cruiser. One important aspect of the marketing program built upon the ship as the destination rather than some particular port of call. The main advertising theme has been that Carnival Lines is a “Fun Ship.” Carnival has ships for all 4 segments (Luxury, Premium, Contemporary, and Specialty).
Carnival Corporation is considered the leader and innovator in the cruise travel industry. Carnival has grown from two converted ocean liners to an organization with two cruise divisions (and a joint venture to operate a third cruise line) and a chain of Alaskan hotels and tour coaches. Corporate revenues for fiscal 2001 reached $4,535,251,000 and net income of $926,200,000. Carnival has several “firsts” in the cruise industry: first to carry over one million passengers in a single year, and the first to carry five million total passengers. Currently, Carnival’s market share of the