Overview of Carnival Lines: History, Present, Future - Research Paper Example

Cruise Line Industry Overview of Carnival Lines: History, Present, Future The following research paper includes eight pieces of information covering early history of Carnival Cruise Lines and the many brand names that have been added in its years of formation since 1972. The research covers its humble beginnings, acquisitions, marketing strategies, products, services as well as unique information that make the Carnival Corporation a leader in the cruising industry. Also included are demographics showing the market that Carnival targets, strengths, weaknesses and today’s threats. Finally, where does Carnival stand in today’s cruise market with their vision and analysis for the future? Keywords: mission, vision, fun ships, tag line, flag Cruise Line Industry Overview of Carnival Lines: History, Present, Future History, Mission, Vision: Ted Arison served in World War II in the British Army in the 1940s. An Israeli immigrant, he started a business running cargo between Israel and New York. However, this venture failed due to competition. In the early 50s, he moved to the United States and worked as a cargo manager for the Israel’s national airline. He then started an air freight company called Trans Air System in the late 1960s. At the age of 42 he moved to Miami to run a small cruise ship between Florida and the Caribbean. The ship was impounded due to owner debt; Arison transferred the passengers onto a Norwegian Cruise Line. He was then convinced he needed to own the ships rather than work for others. (Funding Universe, 1999). Together with his former schoolmate, Meshulam Riklis, they formed Carnival Cruise as a subsidiary of AITS (American International Travel Service). (Funding Universe, 1999). “Our mission is to deliver exceptional vacation experiences through the world’s best-known cruise brands that cater to a variety of different lifestyles and budgets, all at an outstanding value unrivaled on land or at sea.” (Carnival Corporation, 2012). Carnival Cruise Line began in 1972 by using the old to bring in the new. Its founder, the late Ted Arison’s vision, to start with one refurbished ocean liner and just enough fuel to make a maiden voyage one way from Miami to San Juan, Puerto Rico. The first voyage did not go well, as the ship ran aground off the Florida coast. However, coupled with his enthusiasm and future vision, he began to build his American Dream through a partnership. Two years later in 1974 the small line was fighting to stay in business. Arison, determined to see his vision become reality, bought full ownership of the company for $1 and $5 million in debt. Being a very determined entrepreneur, Arison spend the largest portion of his life building the Carnival name into the most well known and profitable cruise line in the world. (Carnival Corporation, 2012). The first ship named the Mardi Gras was the first in a fleet of “Fun Ships” that would be the beginning of the company’s bright future. In 1987 Carnival was named “The World’s Most Popular Cruise Line.” Therefore, they offered 20 percent of their common stock in an IPO (Initial Public Offering). This gave the company the needed capital to begin expanding and acquiring other companies and lines. The actual Carnival Corporation was not officially formed until 1994. (Carnival Corporation, 2012). As the years have shown, Carnival has expanded into all areas of the cruise industry including Holland America 1989, Windstar Cruises and Seabourn Cruises 1992, Costa Cruises 1997, and the Cunard Line 1998. The Cunard Line is known for building the world’s largest ocean liner, the Queen Mary 2. (Carnival Corporation, 2012). The largest merger of all became final in 2003 when Carnival and Princess Cruises joined. Princess became world renowned with the hit television series (The Love Boat) in the 1970s and 80s. This one merger brought with it brands from Britain, Australia, Germany, and the United Kingdom. While the corporation has grown through its brands, it has kept its sales, marketing and reservation offices separate. This has been a plus for the company as well as its powerful shipbuilding initiatives. (Carnival Corporation, 2012). History shows that ships originally flew the flag of the country they were registered in or operated. Carnival Cruise Lines originally flew its flag under the Panamanian flag but today it is split between the Panamanian flag and the Bahamian flag. (Tre’, 2011). The Bahamian flag has replaced the Liberian flag. The Lines, What do they offer? The “Fun Ships” as they are called are much different than the one lone ship that started out in 1972. The Carnival lines offer cruising from two to seventeen days. Destinations include the Bahamas, Caribbean, Mexican Riviera, Alaska, Hawaii, the Panama Canal, Bermuda, New England, Europe and the Canadian Maritimes. The vision for Ted Arison in 1972 was to make the vacation experience accessible to the average person. In those days luxury vacations were taken only by the rich. (Cruiseone.com, 2012). Among other luxury offerings, the ships include upgraded menus, a variety of entertainment, activities and shore excursions. They offer anything you could ask for as far as dining. You have a choice of formal and casual options at sea. They also offer 24-hour room service for anything from pizza, sandwiches, steaks as well as beverages. Business people are offered conference and meeting rooms as well. Some of the ships also include spas, tuxedo rentals, florists, and chocolate delivery. Entertainment options are unlimited with all state of the art projections, lasers, and special sets and costumes. Carnival has also taken the time to cater to the children on board as well. In the year 2012 a record 350,000 children are expected aboard the Carnival ships. They now provide high tech computer labs and games targeting children. They offer a “fountain fun card” for children and adults which provides free drinks for the duration of your cruise. Shore excursions have also been expanded to include kayaking, scuba diving, golf and flightseeing. They have also expanded their golf programs in all of their major ports. Carnival also offers special amenities for passengers with special needs such as wide entry doors to accommodate wheel chairs, low closet rods, shelves, safes, phones and desks, and bathrooms with roll in showers and grab bars. (Cruiseone.com, 2012). “Today’s Carnival,” “as it is called keeps their products fresh and exciting for its guests.” (Cruiseone.com, 2012). One of its most talked about features is the introduction of Internet Cafes where passengers can get email and visit websites, get news and send postcards to friends back home. (Cruiseone.com, 2012). They have also initiated a program called “Evolutions of Fun” which include waterparks, coffee bars, showroom upgrades, new décor in rooms, spa upgrades and improved children programs. Strategy, Marketing, Analysis, Threats: In August 2010 Carnival Cruise along with Razorfish initiated a social media application to make it easier to plan cruise vacations. This has been offered from their Facebook page and allows viewing, comparisons and selecting cruises with Facebook friends. This is the first of this kind ever offered in the cruise industry, and it allows vacation planning and booking with friends on Facebook. This has allowed Carnival to expand their market and services into native locations for consumers. (Carnival-news.com, 2010). In 1972 Arison cut fuel costs by reducing the speed of the Mardi Gras and scaling back the number of stops made. The passengers were forced to spend more time at sea, therefore, more entertainment was added on board including discos, casinos, movie theatres, and nightclubs. This economical and marketing move has been iconic in the cruising industry and given the Carnival line its tageline, the “Fun Ships.” (Fundinguniverse.com, 1999). In the 1980s Carnival initiated a support program aimed at travel agents. The company sent representatives to various travel agencies to ask about vacation options; if the agent recommended a cruise, they would get $10, and if they recommended Carnival, they would give them $1,000.00. They also targeted the younger class by offering cheaper and shorter trips as well as air and sea packages. (Fundinguniverse.com, 1999). The company has acquired many other cruise brands starting in 1987 which has allowed the company to grow. A profit of $193 million in 1989 was attributed to carrying 783,485 passengers. Demographics and Psychographics have been general for Carnival as they cater to all ages and passenger types. The industry has been able to offer affordable vacations to anyone who desires to travel. The $250 million Crystal Palace Resort & Casino in the Bahamas built by Carnival in 1989 expanded the business into land and sea. The company strengths lie in their strong leadership and diversification. They have been able to acquire other cruise lines as well as hotels and motels. Tragedy did strike Carnival in 1998 when one of its ships, the Ecstacy, caught fire after leaving port in Miami. With 2,575 passengers on board, the ship suffered damage to 100 cabins and smoke and heat damage. However, it did not suffer financially and was back in service shortly afterwards. (Fundinguniverse.com, 1999). As we bring Carnival into the year 2000 and beyond, there are other threats that appear. Terrorism has become a threat to targets in the U.S. where any gathering of people collect. In February 2011 one of Carnival’s ships was destroyed by a terrorist threat. It has been described as “Those things represent everything that’s wrong with America.” (Theonion.com, 2011). Reporters were quoted as saying, “Imagine you come from a dirt-poor country that can’t afford running water, and then you see more than 3,000 gluttonous pigs scarfing down all-you-can-eat French toast and whining because nobody told them there was whale-watching in Cozumel.” (Theonion.com, 2011). Homeland Security official, Napolitano and President Obama both have taken the attack calmly while expressing that if we don’t move on with our daily lives the terrorists will win. (Theonion.com, 2011). Conclusion: The Carnival Corporation has over 100 ships in its fleet, including eleven cruise ship brands. The parent company carries 8.5 million passengers each year with a revenue of 14.5 billion in 2010. This translates into an increase of $13.5 billion from 2009. However, the Carnival Line currently has twenty-two ships in operation. Currently Carnival is rated at the top in the cruising industry providing shorter and less expensive cruises. The trademark is their smokestack in red, white and blue colors shaped in a whale’s tail. They have also created a mascot called Fun Ship Freddy. Some have referred to the ship line as the K-Mart of the cruise industry, which is labeled as average food and animal house partying. Through self-improvement, they have overcome this deception by serving delicious food and top entertainment. (Musecruise.com, 2012). The last ship to be added to their fleet is the Carnival Dream ordered in 2009. (Musecruise.com, 2012). The cruise industry expanded from 3.5 million passengers from America and Canada in 1990 to 10.8 million in 2010. As of 2011, they are concentrating heavily on 19 markets with ports within driving distance of its 15 American departure ports. (Newman, 201l). They have shown that they can remain competitive with land-based vacations (as low as $300) by offering deal breaker bookings. In pricing, Carnival places midway; it’s above economy and below luxury. Mr. Baldacci, a representative from Carnival quoted, “When we cast the commercials we try to represent everyday Americans.” (Newman, com, 2011). Mr. Bott, another representative, says of today’s cruising with Carnival, “Hey, anyone can do this and it’s for everybody,” “It’s not all Aristotle Onassis on his yacht – it’s Joe Six-pack drinking a Budweiser.” (Newman, com, 2011). References: Carnival Corporation. 2012. Mission & History. Web. 10 April 2012. http://phx.corporate-ir.net/. Carnival Corporation – Company History. 1999. Web. 10 April 2012. http://fundinguniverse.com/. Carnival Cruise Lines and Razorfish Launch Innovative Social Media Application for Planning Cruise Vacations. 20 August 2010. Web. 10 April 2012. http://carnival-news.com/. Carnival Cruise Lines Overview. 2012. Web. 10 April 2012. http://cruiseone.com/travel/. Muse Cruise. 09 January 2012. Mini Overview: Carnival Cruise Best Ships. Web. 10 April 2012. http://musecruise.com/. Newman, Andrew Adam. 20 December 2011. Carnival Cruise Lines Campaign Focuses on First-Timers. New York Times. Web. 10 April 2012. http://nytimes.com/. Tre’, Mark. 14 March 2011. A look at Cruise Ship Registry. Web. 10 April 2012. http://cybercruises.com/. U. S. Authorities Can’t Really Fault Al-Qaeda For Deadly Bombing of Carnival Cruise Ship. 09 February 2011. Web. 10 April 2012. http://theonion.com/articles/. Read More