Carnival Cruise

Carnival Cruises enjoyed a pretty good run prior to the September 11, 2001 terrorist attacks. The company held 32% of the overall market, making it the largest cruise line in the world. As a result of the terrorist attacks cruise lines were forced to offer deep discount, which hand an impact on the bottom line. Bookings were down along with profit. This scenario was all too familiar to Carnival Cruises.

In the beginning Carnival had struggled, but begin to gain popularity, by appealing to clientele with various activities and entertainment. These mere changes would spark a new development shifting the cruise industry forever. Throughout the 80’s Carnival remained ahead of its peers, maintaining a growth of 30 %, an in 1988 Carnival acquired Holland American Line. By obtaining Holland American, Carnival would now have a different brand of customers, given Holland American’s focus was higher income customers, Carnival could continue its growth in a new market.

Carnival purchased another rival in 2001 stock holders accepted Carnivals offer to purchase Princess Cruises. This particular encounter was a exceedingly important victory for Carnival. Royal Caribbean had made a counter offer, if they were to obtain, the Princess Cruise line it could mean trouble for Carnival. This merger would make Royal Caribbean the more prevalent player, in the cruising industry. By Carnival acquiring Princess Cruises it gave them the needed edge on their competition.

As a result of the mergers Carnival was able to direct their attention to their consumer base, offering something for everyone. Primary focus was placed on three segments, which consisted of contemporary, premium, and luxury conveniences, each subdivision having its own signature amenities. More focus was placed o advertising. The companies advertising and marketing goals paid off. Carnival remained innovative by continuous reinvention of their cruise lines.

However going forward the industry on a whole expected to see more consolidation. There remained challenges as it relates to marketing, competition and rising industry volume. In closing the North American market has barely been tapped, with more focus on the North American Market, can Carnival continue to grow? Can they reduce operating costs and still remain profitable? Is cutting