Strategic Analysis Carnival Cruise Line

Strategic Analysis Carnival Cruise Line

´╗┐STRATEGIC ANALYSIS

Industry Analysis
The cruise industry generated 36.27 billion dollars of revenue in 2013 and increased to 37 billion by the end of 2014. The amount of passengers carried by the cruise industry has continuously increased each year and is expected to exceed 24 million by 2018. Major companies in the cruise segment, which accounts for 95 percent of the industry revenue, are Carnival, Norwegian Cruise Line Holdings and Royal Caribbean. A total of six new cruise ships will be added by 2015 including the Norwegian Escape carrying 4,200 passengers and the Royal Caribbean Anthem of the Seas carrying 4,100 passengers. The total price of an average cruise is $1779.82 per passenger which has increased by 3.5% since 2014.
The demand for cruises has been driven by the disposable income of consumers and their vacation preferences. Smaller operators have the competitive advantage of lower equipment costs and labor as well as more personalized services. Larger operators have stronger bargaining power when contracting vendors and the ability to spread operating costs over a greater number of passengers and also benefit from larger financial and marketing resources.
The global cruising industry has increased over the years driven mostly by the European and North American markets and has surpassed the growth of land based tourism in the last ten years. According to the CLIA (Cruise Lines International Association), between 2003 and 2013, 5% of tourists traveled by water, ferry and cruises. Land based tourism increased by 57% and cruising has increased by 77% since 2013. Passenger ticket revenue comprise 75% of cruise line total revenue which included revenue from the sale of transportation to and from airports.


North America is the largest cruising market and three-fourths of its capacity is positioned in the Caribbean region. Other large markets include Alaska at 10% capacity and Europe which accounts for 29% of its total capacity. According...

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