Carnival Cruise Lines Case Study

Published: 2021-09-10 05:30:08
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Category: Business

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Carnival Cruise Line:
Financial Research Report
Financial Management 534



















Table of Contents

I. Introduction

II. Company Overview

III. Performance & Evaluation

IV. Stock History

V. Recommendation







Carnival Cruise Line 1

I.

Introduction

Carnival Cruise Lines is the largest vacation cruise ships in the continent of North America and perhaps the entire world. The cruise lines destinations include Mexico, Bermuda, Bahamas, Alaska, Hawaii, and much more. They pride themselves in offering extraordinary cruise packages at affordable prices. Their success is hinged on the factor that their vacation products encompass different cultures and are relatable to any person.
The Carnival Corporation emerged in the cruise liner market in 1972. At the helm of this innovative cruise line was the founder, Ted Arison, which he headquartered in Miami, Florida. Arison purchased a cruise ship from the Canadian Pacific Express Lines. After renovating this ship it was renamed the Mardi Gras. Included in the deal with Canadian Pacific Express Lines was another ship called the Festival, which was acquired at a later date.
The up and running Carnival Line was at a standstill. Ted Arison decided to add new amenities that would attract more clientele. Casinos, nightclubs, discos and other things were added to the ships. Still in 1974 Carnival Cruise Lines did not turn a profit. Arison had some major decision making to do before his dream of having a popular, fruitful cruise line faltered.
Arison went back to the drawing board on his approach to become more marketable to consumers. During this era was where the idea for all inclusive pricing was born. With the new pricing system the only thing not included in for a cruise were the gratuities for the ship's staff and
Carnival Cruise Lines 2
alcoholic beverages. Other onboard activities were also implemented. Thus the theme "Fun Ships" were created. During this time Carnival experienced a drastic turn around. In the 1980's Carnival maintained a growth rate of thirty percent. (http://www.reuters.com).
II.
Company Overview
Years later Carnival Cruise Lines have grown tremendously, in capacity and revenue. For over the last decade they have become the industry leader and the one to beat. Since their existence they have expanded their portfolio and acquired other cruise lines under the Carnival umbrella. Some of their cruise brands are as follows: Princess, Holland America, Seabourn, Costa, AIDA, Cunard, Ibero, and P&O cruises. (http://www.carnival.com). In April 2003, agreements were finalized to combine Carnival Corporation with P&O Princess Cruises PLC, creating the world's first global cruise operator encompassing 12 highly recognizable brands and making the new company one of the largest leisure travel companies in the world (http://www.billcara.com). After obtaining these other fleets Carnival tapped into numerous other markets and has a huge stronghold on market shares that their competitors will be unable to achieve.

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