Carnival Cruise Lines Essay

Cruise lines accounted for only 5.2% of the $575.2 billion worth of the travel industry in 2014. While the revenue for cruises has declined in the US, it is growing in Europe and Asia, leading to more opportunities for Carnival to expand in these regions. Current plans calls to increase berth capacity for the European market 30% and 20% for the Asian Market by 2016.

Unfortunately not all impacts are positive; there are several negative impacts as well. When the passengers on the cruise ship disembark and visit the local area, they may not go into the local area, they may be going straight off the cruise ship onto a coach and to a tourist attraction, although the tourist attraction and coach company will benefit from it, the local people in the town will not as the trade will not go to the town so they loose out on money.

Top strengths that Carnival Corporation & plc has to their advantage would be their strong brand and major control of the market share. Containing a strong brand portfolio with a total of 10 well-known brands operating about 102 ships. Such brands include Carnival Cruise Lines, Holland America Line, Princess Cruises and Seabourn in North America; AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK) under the Europe, Austrailia & Asia segments. Along with Holland America Princess Alaska Tour and the Canadian Yukon (Olarte, 2017). The company is also the largest cruise company in the world in terms of cruise passengers with a market share of about 47% followed by Royal Caribbean Cruises Ltd with a market share of 23% (Cederholm, 2015).

The Carnival Cruise Lines, Inc., was founded by Ted Arison in 1972. (Corporate Information) Ted ran the company until 1990 when he handed over the business to his son, Micky Arison. Micky became the CEO, and then became the Chairman. Carnival is the largest and most popular cruise line in the world, carrying more passengers than any other cruise ship. The Carnival Corporation mission statement is; “Our mission is to take the world on vacation and deliver exceptional experiences through many of the world's best-known cruise brands that cater to a variety of different geographic regions and lifestyles, all at an outstanding value unrivaled on land or at sea.” (Carnival Corporation History)

In summary, the low price sensitivity, low buyer concentration and the leadership of Carnival in the cruise industry on one hand enhances the buyer power while a high degree of involvement of travel agency on the other reduces their bargaining power, the power of buyer of the buyers in the cruise line market of Carnival is moderate.

* High Capital Requirements: The capital required to start up a cruise line is one of the key factors contributing to this industry’s high barriers to entry. With the average cost of building a cruise ship rising, the amount of capital needed to start up a cruise line is estimated at one billion dollars. Therefore discouraging any new entrants into the industry.

Over the years the cruise industry has seen remarkable growths across the country. Several different ports have seen an increase in ships, which increases the amount of passengers have grown. When ships, and passengers increase it can only benefit the cruise industry in a whole. Means more profits, jobs, and the economy will thrive.

Summary: The cruise line industry has been experiencing a period of massive expansion over the last decade thus heightening the competitive profile for the industry in terms of market share and competitive rivalry. Now cruise industry is one of the most competitive across all.

Carnival Cruise Lines is the flagship brand in a portfolio operated by its parent company, Carnival Corporation & plc. Carnival Corporation has headquarters in Miami, Florida and London, England. Carnival Cruise Lines ships carry more than 60,000 passengers a week. The cruise line operates 1,400 voyages per year with a fleet of 22 ships, and serves approximately four million passengers per year. Carnival Cruise Lines has 3,800 shore side employees and 33,500 shipside employees. The cruise line conducts voyages ranging from three-to-sixteen days in length to some of the most popular vacation destinations in the world, including The Bahamas, Caribbean, Mexican Riviera, Alaska, and Hawaii.

At the end of the 1960’s, Wilhelmsen and Stephan came up with the profitable idea that the wealthy residents of Florida will consider paying top dollar amounts to cruise to the Caribbean Islands as a great alternative for a week or weekend getaway. After proposing this idea to Norwegian entrepreneurs, Royal Caribbean Cruise lines, was born.

Carnival Cruise Lines is the largest cruise company in North America and carries more than 60,000 passengers a week. The Carnival experience is the standard against what past cruisers judge their later cruise experiences. Carnival has captured the "fun" psychographic and has a strong reputation for an enjoyable, relaxed cruise. Furthermore, Carnival has a strong market expansion strategy for selling the mass-market cruise category and first-time cruisers. They have a clear vision and knowledge about the industry and a commitment to their brand essence, which is fun. Also, as an extension to their branding of the "fun" ships they are the low-price leaders. Because of their strong brand image they are able to achieve double-digit growth in

The cruise industry is the most exciting growth category in the entire leisure market. Since 1990, the industry has had an average annual passenger growth rate of 7.2% per annum. The cruise industry is young. From 1980 to 2009, over 176 million passengers have taken a deep-water cruise (2+ days). Of this number, 68% of the total passengers have been generated in the past 10 years. Forty percent of total passengers have been generated in the past five years alone. The cruise market potential is strong. Over the next three years, over 50 million North Americans indicate intent to cruise. To date, approximately 20% of the U.S. population previously cruised. By maintaining historical occupancy levels, the cruise industry will welcome over 14 million guests this year. The cruise product is incredibly diversified with literally a cruise vacation for everyone. Over the past 10 years, the industry has responded to extensive market and consumer research that has guided the addition of new destinations, new ship design concepts, new on-board/on-shore activities, new themes and new cruise lengths to reflect the changing vacation patterns of today’s market.13

On February 2016, Royal Caribbean’s Anthem of the Seas set sail off the East Coast of New Jersey with more than 6,000 passengers and 1,500 crew member on board (Almasy, 2016). The passenger ship sailed into a storm which threatened the lives and safety of everybody on board. According to CNN and other new agencies, a lawsuit was filed in a Miami federal court alleging the captain’s negligence in sailing into a well-publicized and forecasted storm. In another case, Royal Caribbean 's Explorer of the Seas was on a 10-day cruise in January when a fast-moving bug left nearly 700 passengers and crew stricken with vomiting and diarrhea. The CDC reports that this is the highest number of sick people reported on any cruise ship in two decades. Yet, in another report, the Eastern Star went down during a storm killing more than 450 people. It 's the deadliest boat disaster in China in almost 70 years Cruise Line Safety: In the last 5 years approximately 1000 people have died on cruise ships which ran aground or sank (Ahmed, 2016). Ironically, there are a lot of people who will never get to experience of going on a cruise because of the fear driven by reports like the aforementioned. In actuality, cruise vacations have a higher percentage of satisfied customers than any other vacation experience. There are a number of compelling reasons why a cruise would be an ideal vacation for family and friends. Taking a cruise can have many different price ranges depending on the location you

The cruise industry provides an increase of tourism industry within the ports and its country. For example, restaurants, hotels, taxis, theme parks, museums, shops, taxi drivers and travel guides are all positively affected as it will increase local employment within the city and its ports. Anyhow, cruise industry will brings large sums of revenues to the local city and governments. That is why, I think this enhances the relationship with cruise companies and Politicians will be efficient both sides.

A. Pause Strategy (CI#1, 2, 3): Carnival Corp has been known for health and safety records, a key component in consumer decision-making in the cruise industry. In order to begin improvements, a pause strategy needs to be utilized to allow the company to take a step back from aggressive growth and focus more towards consumer necessities. Many complaints stem from issues like sanitization of rooms, quality of food, and ship malfunctions. Keying in on ship maintenance, restoration, and efficiency will significantly decrease the chance of malfunctions. While implementing more stringent and attentive guidelines towards guest amenities and conditions of food storage/quality to help increase consumer appeal.