Case Study Of Carnival Corporation
The history of the Carnival Corporation begins in 1972, when Ted Arison set up
Carnival Cruise Lines as a subsidiary of the American International Travel
Service. The first ship ran aground, but Arison remained steadfast in achieving
his vision of a cruise line offering affordable vacation packages to middle-
income consumers. By 1977, Carnival had three ships, and ten years later, as the
industry leader, the company went public. In the early 1990s, Carnival began to
diversify into land-based entertainment, thus changing its name to Carnival Corp.
The company is the world's #1 cruise operator with about a third of the market.
Carnival Corporation is comprised of Carnival Cruise Lines; the world's largest
cruise line based on passengers carried, Holland America Line, Windstar Cruises
and Seabourn Cruise Line. It owns 25 cruise ships serving customers worldwide
and has 6 new ships under construction (EXHIBT 1). It basically has three
market segments: Contemporary, Premium and Luxury. Carnival also operates
14 hotels in Alaska and Canada and runs Holland America Westours, which
markets sightseeing tours. Carnival has a 29.5% stake in Airtours, one of the
UK's largest tour operators, and is bidding for control of cruise line NCL. CEO
Micky Arison and family control Carnival.
Carnival was able to increase profits through the acquisition of Holland America
Line in 1988 and consequently Carnival expanded its cruise lines to a broader
market, however Carnival experienced a loss of $135 million from disposal of
The company’s current strategy is to attract more repeat cruisers and new
cruisers of different segments by offering different types of packages. Such
differences include choice of shorter or longer cruises, a low to moderate price
for affordable cruises for middle class, and longer luxury cruises for affluent
classes. As part of the company’s plan, Carnival is "going global" through a joint
venture with Hyundai Merchant Marine to the Asia market.
Carnival’s strategy focused on the "Fun Ship" concept, beginning with the Mardi
Gras, which targeted people of all ages. In recent years the driving force behind
why a person needs to take a vacation has changed. Today vacationers look to
get away from everyday stress, and opt for a stress-relieving cruise.
Carnival is considered the cruise industry’s leader, and in the past few years,