Carnival Cruise



INTRODUCTION
In 1972 American Travel Services, Inc., along with Ted Arison, bought two ships from the Canadian Pacific Empress Lines for $6.5 million. These two ships were named the Marti Gras and the Carnivale. Things did not begin well for this group of investors. On its first voyage, the Marti Gras ran aground in Miami Harbor. The ship was also slow and used up very expensive fuel.
For the next three years, Carnival lost money. During this time, Arison tried to drum up business by adding such attractions as casinos, discos, nightclubs, and various forms of activities. Finally, in 1974, American Travel Services was ready to pull out of the joint venture. So, Ted Arison bought out ATSI for $1 cash. Unfortunately, he also acquired the $5 million debt that went along with the venture. As luck would have it, however, the following month after the buyout by Arison, the repaired Marti Gras began showing a profit. For the remainder of the year, it operated at or above than 100-percent capacity.
Following this successful year, Mr. Arison along with his son, Micky Arison and Vice President of Sales Bob Dickinson, began to change the Carnival marketing strategy. They devised a scheme that went after the first time and young cruisers with "a moderately priced vacation package." This vacation included the cruise and airfare to and from the port of departure. CarnivalÅfs rates were competitive with such vacation packages as that of Walt Disney World. Also included in the fare was entertainment, meals, and activities.
During the 1980s, Carnival was able to maintain a growth rate of 30 percent. This figure was three times that of the industry. In 1987, Carnival conducted a customer profile. During its study, they found that the average person cruising with Carnival was between the ages of 25 and 39 and had a household income of $25,000 to $50,000.
In 1988, 1989, and 1990 Carnival experienced vast expansion and change. They acquired 4 cruise ships from the Holland American Line. These ships were used to target the higher income vacationer. They also began construction of the $250 million Crystal Palace Resort and Casino located in the Bahamas. Ted Arison in 1990 relinquished his role as chairman of the board to his son Micky who remains in that position today.
THE CRUISING INDUSTRY

With the vast explosion of the airline industry in the 1960s, the ocean liner was quickly becoming obsolete. Cruising, which was the exclusive privilege of the rich and famous, was now being targeted toward the middle class. These luxuries and amenities were now offered to the middle class. "According to Robert Meyers, editor and publisher of Cruise Travel magazine, the increasing popularity of taking a cruise as a vacation can be traced to two events. First, televisionÅfs Love Boat and the increased participation in the workforce by women gave families more disposable income."
CARNIVAL TODAY
Carnival is a thriving industry today. It owns four other Cruise lines including Holland America Line and Windstar Cruises. The parent company, Carnival Corporation owns Costa Cruise Lines, Seabourn Cruise Line, Airtours, and Weston hotels and resorts.
Carnival has just introduced two new SuperLiners this year. The first ship is the MS Elation. This ship can hold 2,040 passengers and is the first ship to sail year round from Los Angels. The MS Elation was built with all the features of the most popular ship, the Carnival Destiny. The second ship is the MS Paradise. The most surprising feature of this ship is the fact that it is entirely smoke free, which makes it the worldÅfs first cruise ship with this distinction. The Paradise will have seven-day cruises that run year round from Miami.
There are five new cruise ships that are under construction now. The Carnival Triumph, the Carnival Victory, and three more which have yet to be named. The MS Carnival Triumph and MS Carnival Victory are both supposed to be larger than the Carnival Destiny. Triumph will be released in late 1999, and Victory will be released in the summer of 2000. The other three will be in the water sometime after 2000.
Carnival is having no problem dealing with consumer demand for their cruises. Carnival has twelve operating ships in its fleet. They have nearly one hundred percent occupancy for all of their cruises. Carnival