Carnival Cruise Lines

Carnival Cruise Lines is a British-American owned cruise line based in the Doral suburb of Miami, Florida (Carnival Cruise Lines, n. d. ). The company offers vacations that appeal to a wide range of lifestyles and budgets. Carnival was founded in 1972 as an independent company by Ted Arison. The cruise line company became known as the world’s most popular cruise line and in 1987 it made an initial public offering of 20 percent of its common stock. The public offering provided the company with an influx of capital that allowed the company to begin expanding through acquisitions.

The company formed Carnival Corporation & plc in 1994 and Carnival Cruise Lines became its flagship brand (Mission & History, 2010). Carnival Corporation has acquired representation in virtually every market segment of the cruise industry. In April 2003, agreements were finalized to combine Carnival Corporation with P&O Princess Cruises plc, creating the world’s first global cruise operator. Carnival Corporation & plc encompass 12 highly recognizable brands and the company became one of the largest and most profitable leisure travel companies in the world.

The company is now one of the 11 individual worldwide cruise ship brands owned and operated by Carnival Corporation & plc. The corporation operates 97 ships and Carnival Cruise Lines is its largest and leading brand in North America, based on passengers carried under the Carnival Corporation. Carnival is also the corporation’s most profitable cruise line in the world. The cruise line has 22 ships in operation and two future ships in development. Carnival has 3,800 shore side and 33,500 shipboard employees. *Carnival pioneered the concept of shorter, less expensive cruises.

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Howard Frank, the chief operating officer of Carnival Cruise Lines, says their ships are called the fun ships because unlike its competitors, Royal Caribbean International and Norwegian Cruise Line, Carnival offers a wide range of activities on board instead of just delicious cuisine (Beesley, 2010). Frank said their innovative new ships feature popular amenities that meet the increasingly sophisticated desires of all guests yet provide a fun and exciting environment for all ages. Carnival hit record-breaking business so far this year.

The bookings for the company were the highest they have ever been because of its new booking system. The earlier in advance a passenger’s cruise is booked the more economical the price. A cruise can cost as low as $175-$200 per person in advance. The cruise line also offers last minute bookings at discount prices. Carnival can be cheaper than airfare without the fear of terrorist attacks, excessive baggage fees, delays and extreme boarding procedures or hassles. In 2009, the corporation revenued $13. 2 billion with a net income of $1. billion, and are projected to make their highest profit ever this year. The company carries a record of 3. 9 million passengers and the up-to-date record is the most in the cruise industry. *Executive control of Carnival Cruise Lines is provided by the North American division of Carnival Corporation in Doral, Florida. Carnival Corporation and Carnival plc, the cruise line, function as a single economic entity. They also function through contractual agreements between separate legal entities (Investor Relations, 2010). Carnival Corporation common stock is traded on the New York Stock Exchange.

Carnival plc is traded on the London Stock Exchange and has an ADS on the New York Stock Exchange. Carnival is the only company in the world to be included in both the STP 500 index in the US and the FTSE 100 index in the UK. Carnival Cruise Lines has a hybrid structure divided under Carnival North America, Carnival Australia and Carnival UK. The hybrid structure is under Carnival Cruise Lines which is only one of the brands under Carnival Corporation & plc. The corporation doesn’t have a long hierarchy of authority instead it has a few layers of corporate officers and board of directors (Officers, 2010).

There are six corporate officers that consist of executive, operating and financial officers, as well as vice presidents of shared services for the multiple brands, general counsel and controller for the corporation. The cruise line only has one executive officer. Gerald R. Cahill is Carnival Cruise Lines’ only president and chief executive officer except for the executives over the Australia and UK divisions. Majority of the company’s employees are shipboard. There is a one-to-three ratio of staff to passenger on every carnival ship, ensuring excellent customer service.

Carnival has a horizontal communication amongst the six corporate officers and board of directors. Corporate governance extends from the ship, through the operating lines and senior corporate management to the board of directors. *Carnival is a profitable company and is now the leader in the contemporary cruise sector. The line has launched a $250 million enhancement program on its eight fantasy-class ships. The enhancement will include installation of a water park on board, an adult-only retreat, tropical-themed mid-ship pool area, and other innovative features.

Carnival’s former image was a party ship reputation for younger travelers. The cruise line is now known as large, modern and extremely elegant, yet still a profitable and fun line. Historically, Carnival Corporation’s growth has been driven by the expansion of their portfolio of core brands through an aggressive ship building program. Now the brand, Carnival Cruise Lines, competes globally because they invest time, money and effort into product development and wide varieties of amenities on board. The company enhances the excursions offered in port destinations, as well as programs, activities and attractions on the ship.

Carnival children programs provide the same level of variety, fun and attraction for their age, as the amenities available to adults. No matter the age, lifestyle or budget the goal is consistent. The cruise line’s goal is to provide everyone with a safe and healthy place to live, work and have fun. Carnival strives to provide an innovative and exceptional vacation experience on land and or at sea (Phillips, 2009). *Last week I sailed on a Carnival Cruise Lines ship to Nassau, Bahamas for a four days and three nights weekend cruise.

The Cruise was inexpensive to book for a typical vacation. We were a party of four people and we each only paid around $200 a person in advance. If we would have booked the vacation at the last minute it could have cost each person $300-$400, which is still inexpensive for an all-inclusive cruise. At first you don’t understand how the cruise line makes a profit because almost everything is free except alcohol, soda and excursions. Unlimited food all day and night, shows, the gym, and activities are free. It didn’t take long to realize the company’s strategy on making money.

Once Carnival booked the customer at a low price, they up sell the customer with backend products and services that passengers feel are definitely worth spending money on during a vacation. There were additional products and services like an onboard casino, excursions, internet services, and photographers everywhere ready to take memorable pictures to sell. As well as, massages facials, hair treatment, wholesale liquor prices and onboard shops and stores. Carnival provided relaxing services and duty or tax free products.

The cruise made lots of money and the marketing cost went down because their exceptional services built loyal customers. The company probably spends more money capturing a customer, maybe even lost money initially on the booking transaction because of the specials and low rates but created lifetime customers in the end. The more products and services a company can offer or sell to a customer, the more valuable they become and the more you can spend on acquiring a customer. Wants you acquire a customer and satisfy their needs, you can gain more from a buying impulse that is pleased and devoted to the company and its brands.

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