CARNIVAL CORPORATION & PLC Case Analysis Prepared by Chen Min – Le Nguyen - Nyndia Charles - Tongelah Parkins for Dr. Rocha in partial fulfillment of the requirements for BUS 704 – Policy and Planning Strategy School of Business / Graduate Studies St. Thomas University Miami Gardens, Florida Fall 2019 September 15 th , 2019
EXECUTIVE SUMMARY Carnival Corporation is a subsidiary of the American International Travel Service Carnival Cruise Lines company. It was founded in 1972 by Ted Arison and currently 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. Their mission now is to deliver exceptional vacation experiences through the world’s best-known cruise brands that cater to a variety of different lifestyle and budgets, all at an outstanding value unrivaled on land or at sea. 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.
You've reached the end of your free preview.
Want to read all 27 pages?
- Spring '20
- Test, Carnival Cruise Lines, Cruise ship, cruise line, Holland America Line, Carnival