. Management Summary
Carnival Cruise Lines (CCL) is the leader of an industry experiencing growth in both capacity and customer base. The company is fiscally sound and positioned to capitalize on the external opportunities.
Currently Carnival and two other large cruise lines, Princess and Royal Caribbean, dominate the industry. Royal Caribbean and Princess are in a position to challenge Carnival's industry leadership using many of the tools and strategies developed by Carnival.
Because consolidation of the industry is occurring, Carnival must reinforce its position as the industry leader. To achieve this goal the company must increase market share, better serve its customers and maintain its low operating cost.
The first place to begin is when the customer buys the ticket. The cruise industry as a whole, and Carnival in particular is victim to an archaic system whereby cruise line customers and Carnival are locked into a system where the travel agent is the middleman. The Internet has made direct purchasing easier and available to the customer but the customer base is not actively taking advantage of the new technology. In 2000, over 90% of all cruises were still booked through agents. Customers currently lack confidence in their ability to research vacation options. The commission paid to the travel agents is 10%, 15% in Florida. There are three defficencies in this arrangement; one is the lack of communication with the customer in one of the most crucial portions of the business activity. The second is the overall cost to support the travel industry. The third is Carnival lacks effective control over the sale of its product.
A second issue is the expansion in size of the cruise ship, now at about 2500 to 3200 passengers. ...