Carnival Corporation 2010 Executive Summary Founded in 1972 by Ted Arison, Carnival Corporation is a subsidiary of the American International Travel Service Carnival Cruise Lines company, based in Miami, Florida. From its first ship Mardi Gras, which was a refurbished aging ocean liner, purchased from Canadian Pacific Empress Lines, Ted Arison was committed in achieving his vision of offering affordable vacation packages to middle-income consumers. In late 1974, after three years of losses, Ted Arison bought out Carnival Cruises subsidiary from American International Travel Service, by assuming the $5 million debt and $1 cash. Ted Arison, along with his son Mickey Arison and his Vice President of Sales and Marketing Bob Dickerson, began targeting first-time cruisers and young people with moderately priced vacation packages. Throughout the 1980s, with added ships such as the “Queen Anna Maria” and “Festivale,”, Carnival was able to maintain a growth rate of approximately 30%, about three times that of the industry. In 1987, as the industry leader, Carnival went public, Ted Arison sold 20% of his shares, generating $400 million for further expansion and by the following year the company acquired the Holland America Line along with its subsidiaries Windstar Sail Cruises and Holland America Westours. This new acquisition allowed them to begin an aggressive “superliner” building campaign for their core subsidiary. By 1989, their cruise segment carried more than 75,000 passengers in a year, ranking them as the first in the industry with about a third of the market and in the early 1990s, Carnival began to diversify into hotels in Alaska, and Canada, thus changing its name to Carnival Corp. However, by the mid-1990, higher fuel cost along with increased airlines costs began to affect the industry and the first Persian Gulf War caused many cruise operators to divert ships to the Caribbean, increasing the number of ships competing directly with Carnival. Their stock price went from $25 in June 1990 to $13 by the end of that year. Carnival had to take a $135 million write down on the Crystal Palace in exchange for debt cancellation in March 1992 but was able to acquire later during the year 50% of Seabourn which served the ultra-luxury market with destinations in South America, the Mediterranean, Southeast Asia, and the Baltic, forming a partnership with Atle Brynestad.
From 1993 throughout the end of the 90s, Carnival continued to expand not only internally through generated growth by adding new ships but also externally through acquisitions when the right opportunities arise. The terrorist attack of September 11 th, 2001 , affected the leisure travel industry worldwide, forcing several of its competitors into either bankruptcy or discounted cruise prices, but Carnival quickly recovered when public fear subsided, once again reaffirming that Carnival is well positioned in the market.
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- Fall '16
- Carnival Cruise Lines, cruise line, Holland America Line, Carnival, Carnival Corporation