Carnival Cruise

Lines
Group No 02

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 What is a Cruise???
• A Cruise is a sea voyage taken for pleasure (as opposed to say, passage on a
whaling ship, an assignment in the navy, or a ferry ride to get you from point A to
B).
• Cruising has become a major part of the tourism industry accounting for U.S $29.4
billion with over 19 million passengers carried worldwide.

• A Cruise sail about in an area without a precise destination, especially for pleasure.

• A Cruise ship is a passenger ship used for pleasure voyages, when the voyage it
self, the ship’s amenities and sometimes the different destinations along the way,
are part of the experience.

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 What Happened To The
Cruise Industry???
• Earlier ships (called liners) transported people across waters for business and
pleasure

• But after the world war ІІ air service captured the liner’s passengers.

• Then one by one shipping companies retired the great luxury liners that had piled
the seas for decades.

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 The Contemporary Cruise
Industry
• Cruise lines can be grouped into three distinct categories.
 Luxury
 Premium
 Contemporary

Contemporary Cruise Lines :-

Royal Caribbean
Norwegian cruise line
Carnival cruise lines
Disney cruise lines
MSC cruises
These are recognized for their family- friendly, large, amenity-loaded ships.

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• Cruise industry is dominated by two companies Carnival and Royal Caribbean
which command a combined 72 percent of the market.

• Largest is Carnival which offers cruises to every continent on the globe including
Antarctica.

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 Where Carnival’s Cruise
Lines Are Headquartered???
• North America
Carnival

Holland America

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Princess

Seabourne

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United Kingdom
Cunard

P & O Cruises

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Spain

Germany

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Italy

Australia and New Zealand

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 Doing Business In
International Waters
• The whole cruise line industry is international in scope when considering nature of
its business.

• Business in international waters involved with different ports in different countries.

As a company this can be advantage in lower taxes and less stringent employment
rules.

• For an example Carnival is Panamanian company which is listed in New York

Stock Exchange and with operating Head offices in Landon and Miami. This
company is neither subjected to Panamanian or US income taxes. Due to this
business model it is so flexible to shift ships during different weather conditions.

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• Furthermore, carnival can generate more revenue by onshore excursions with tour
operators in different countries. An identified problem is that passengers see and
spend too little in countries they visit.

• Maritime law is the law which related to the business in international water. But
maritime law is difficult to clarify since every country has its own version of it.
Laws on a cruise ship starts with the flag the ship is flying under because a ship
flies the flag of the country where it’s registered.

Examples
• According to the U.S law, once a ship is 24 miles from any coastline, it is on the
international water.
• According to the Liberian law it should be 25 miles from California to be the
international water.

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 What it takes to operate a
cruise line???
• Ship Shopping

• Ship consist the biggest investment for cruise line. Shipbuilding takes place in
specialized facilities called shipyards. There are only four shipyards in operation
today with the capability to build cruise ships.

• Lightweight metals such as aluminum and high-strength steel are used in order to
keep the center of mass low despite their size

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• Example

carnival introduces 2 to 3 new ship per year. Shipyards in several countries are
capable of building ships that meet cruise industry needs and carnival secures
shipbuilding bids from all over the world. Because of Shipbuilding employs so
many people and uses so much locally produced steel, because governments often
subsidize the industry- a practice that works to the benefit of the cruise line
industry by offering less expensive prices for ships. For instance, the Italian
government awarded the shipyard Fincantieri about $50 million in subsidies to
build five ships sold to carnival for $2.5 billion.

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Where to find crew members???

• Crew members on a cruise ship are service employees who work under the
direction of a Manager or other supervising staff.

• Shipping companies, including cargo and cruise lines scour the world for crew
members who not only can perform specialized tasks but are properly certified.
• Cruise ships have lot of job such as captain, mate, bosun, engineer, medical purser,
casino jobs, cook etc.
• Some cruise jobs require highly developed professional skills, Fluent in
international languages etc.
• About a third of all the world’s ship crew are from the Philippine, not only because
of reasonable labor costs but because Filipinos are generally fluent in English.
example:
• Crew members in carnival ship, they hail from over 100 countries, and carnival
maintains a range of employee training programs that include English as a foreign
language.

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Casino and Other amenities
Amenities

• The cruise ship has become an important part of the cruise experience since it also
represents a destination in itself. An increasing amount of amenities are being
offered both on the ships and as shore experiences.

Example:
Carnival offers theme-based dinners, a variety of musical entertainment, games and
contests, spas and athletic facilities.

Example:
Royal Caribbean includes surf pools, water parks, multi room villas, private pools,
cantilevered whirlpools, surf simulator and skydiving

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Casino

Cruises operate outside the jurisdiction of any national authority; they are not subject to
any national laws restricting gambling. Therefore, Casinos are onboard fixtures. The
cruise ship can be a good substitute for mainland tourists since it’s much cheaper than
mainland.

Example:
If you are sailing in American waters, activities are governed by US federal and state
laws.

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The Overseas Environment

• Cruise ships have the advantage of treating the regions of the world they operate in
as a source of both customers and suppliers. Also, they have the ability to ship
capital and other assets to place where they can best serve the company’s needs. Ex:
Carnival whole world is a source of both suppliers and customers

However it’s also vulnerable to wide range of disturbances.

Ex: safety issues, strict regulations

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 Safety Issues
• After terrorists seized a cruise ship in the Mediterranean in 1985, the major cruise
lines instituted strict security checks for boarding passengers.

• Carnival redeploys cruises to avoid areas in which passengers might face danger
from political upheaval or crime.

• Carnival cruises not stop in islands or ports which have a high crime rate. Such as
Cuba

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Safety issues example

A generator fire aboard the Costa Allegra led to the loss of air conditioning and toilet
service for 1000 passengers for four days in the Indian Ocean.

Another generator fire on the Carnival Triumph stranded 4000 passengers for four days
while the ship was towed to Mobile, Alabama.

These incidents affect cost in terms of assets and legal payments. However the
passenger safety is good in these incidents.

Simply, the cruise industry has only 0.1 fatalities for each million passengers it carriers,
this rate three times better than air lines.

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 Economic Issues
• Globalization helps people to use cruise lines in order to satisfy their transportation
and pleasure goals.

• When there are economic issues or recessions, people are more apt to take shorter
cruises and to embark from nearby ports rather than flying to far away points of
departure.

• Exchange rates have an huge impact on using cruise lines as well as other
transporting mediums. When a country’s exchange rate is high when compared to
service providing country, the demand for cruise lines could be reduced.

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Cruise lines operating well in the economic downturns

Why??

• Their all inclusive per diem prices are often bargains compared to the cost of travel

• Time to time cruise companies offer lower prices to countries which have a high
exchange rate

• They provide various special packages for families, groups and individuals through
various promoting competitions.

• Cruise companies offer discounts during the global recessions

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 The Weather
• Carnival company cancels trips due to bad weather conditions with full refund of
package prices to the passengers.

Bad weather conditions

Heavy Rain, Hurricanes, High wind, High/low waters, Tropical Storms

• Cruise ships are at the mercy of the weather. Cruise lines know this and try to place
their ships in destinations where the weather is less likely to affect the itinerary.

• Cruise ships are built to withstand typical weather with ease, including the
occasional storm or other bad weather. Likewise, cruise itineraries are planned to
take advantage of the best weather seasons with minimal disruptions. Still, bad
weather can impact a cruise in several ways.

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 The Future
• People in countries such as China, Korea have discretionary income to spend on
tourism.
• Cruise line companies started to spread the ports worldwide. They recently added
ports in Vietnam, Indonesia and Papua new guinea

• Cruise line companies develop new programs to their customers such as family
friendly programs, adults only areas and experiences, tailored accommodations etc.

• Cruise industry have a increasing repeat customer base.

• Entertainment on ships continues to change and become more diversified and

spectacular. Shore excursion experiences are changing as well. People are looking
for interesting shore-ex choices and cruise lines are responding with some truly
unique and exciting experiences that didn’t exist even five years ago.

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Thank You

Questions????

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