Arison not afraid to use the F* word ... FUN C 35

Million passenger brands: Carnival Cruise Lines
Dream World Cruise Destinations Spring 2010
Arison not afraid to use the
F* word . . FUN
C
arnival Corporation & plc Chairman
and CEO Micky Arison only has to
go to the movies to see just how
much impact the cruise line, which his
father (Ted) created and he developed
into a global corporation, has had on the
American way of life.
“Carnival Cruise Lines (CCL) has become
synonymous with cruising in the US,” he
says. “When someone wants to reflect
cruising, that is the brand to which they
usually refer.
“Two recent Golden Globe-winning
movies – ‘Up in the Air’ and ‘The Hangover’
– both have CCL moments. The first shows
a CCL funnel in one scene; the other has
a character referring to CCL. It’s not an
entirely complimentary reference but, hey,
it shows just how much CCL has become
the US cruise brand.”
It still carries more passengers – 3.8
million last year (including 625,000
children) rising to an expected 3.9 million
this year, and more than 4 million in 2011 –
than any other brand in North America (or
anywhere else for that matter).
But, in terms of total number of berths,
Royal Caribbean International (RCI) has
edged ahead with the arrival of Oasis of
the Seas. And the gap will increase when
sister ship Allure of the Seas arrives at the
end of this year. It will, though, be nip and
tuck again between the two brands when
the second of CCL’s two sister ships on
order arrives in 2012.
No-one should be under the illusion
that it was any kind of coincidence when
Arison chose to break the industry-wide,
18-month hiatus in new ship orders at the
precise moment that RCI introduced Oasis
of the Seas. The rivalry between CCL and
RCI (which now extends to their parent
companies: Carnival Corporation and RCCL)
is as strong as ever, though Arison will
contend that in many ways CCL stands
alone.
“When my father started CCL nearly 40
years ago,” says Arison, “he wanted it to
be a cruise line which offered high value
but also high quality cruises that could be
afforded by the largest possible number
of people.
“Other brands which also started back
then have all, at some stage, looked to
move themselves upmarket in terms of
their target markets. CCL has never tried to
go down that route. The core values have
remained the same, even though the ships
and the line have changed a great deal
over the years.
Other brands which
also started back
then have all, at
some stage, looked
to move themselves
upmarket in terms of their
target markets. Carnival
Cruise Lines has never tried
to go down that route.”
Micky Arison
35
Million passenger brands: Carnival Cruise Lines
Dream World Cruise Destinations Spring 2010
Our target market
has not changed
– just their
expectations.”
“In 2010 we have a new logo, a new
advertising campaign and a new slogan –
but we are still talking about people having
‘fun’ just as we did when we had that first
ship.”
CCL has always called its fleet the ‘fun
ships’. It used to play that down in the UK
and Europe, for fear of being seen as
downmarket rather than mass-market (a
subtle but important difference in these
markets), but is now confident that it has
sufficient brand awareness outside North
America to make its new tagline – Fun for
All, All for Fun – a global one.
In 2009 the TV advertisements to
back this up featured an improvisational
comedian ‘playing’ a Fun Director on one
of the ships. And in 2010 – when CCL is
to be the exclusive cruise line advertising
during the Winter Olympics – they
highlight the difference between life at
work ashore and on board a CCL cruise,
with all the participatory fun on tap.
In its 38-year history CCL has expanded
from a single, ageing acquired ship to
22 modern vessels of increasing size
The whole
management
structure has
changed, though we do
try to maintain the family
ethos through training and
involving the staff”.
and with a growing range of facilities,
with a maximum of about 65,000 berths
between them. Half were built in the past
ten years; the other half in the previous
decade, but all recently upgraded through
the US$250 million ‘Evolutions of Fun’ refit
programme.
“If today’s passengers were timetransported back to the original ships,”
says Arison, “they would probably find a
similar level of fun and enjoyment – but
only because then they would have had
lower expectations.” Entertainment would
have been a lone magician and an Israeli
musical trio; now it is shows of Vegas
style and quality. Food would have been
burgers and more burgers; now there are
many options, including fine dining.
“Our target market has not changed –
just their expectations. And so we have
had to make a huge investment in adding
the facilities that today’s passengers want
to see. For example, we could not get
away with having just a single treadmill in
the fitness centre as we had on one new
ship in the 1990s; now even 30 would not
be enough.”
Looking ahead at what might change on
board cruise ships of the future, he says
that this would depend on how passenger
tastes and demands change. “We have
always reflected changing public tastes,
and the fact is that – subject to cost –
cruise lines can always provide anything
that people enjoy on land. That is how we
have come to see water chutes and rock
climbing walls become features on ships.”
The range of facilities for families
with children has seen one of the most
significant changes. The latest Dream
class CCL ships contain a 5,000 sq.ft. Camp
Carnival and 193 ‘family cabins’ with five
berths and two baths.
But it is not just the ships that have
changed. The whole company has had
to develop to cope with being a major,
multi-ship brand (as well as being just one
brand among many within the Carnival
Corporation).
“The whole management structure has
changed, though we do try to maintain
the family ethos through training and
involving the staff,” says Arison. “Of course,
evolving technology has enabled us to
manage a much bigger company more
easily, through automation and satellite
communications.”
The biggest change in public behaviour
affecting the cruise industry will – he
believes – turn out to be the rise of the
Internet. “This has already resulted in a
huge change. Just ten years ago, most
people looked for cruise advice at travel
agents in newspaper and magazine travel
sections – that has all gone.
“Now nearly everybody uses the
Internet for their research. Far fewer
actually book cruises directly online, but
any travel agent still without online booking
capability is going to lose out.” They would
also lose out on the webinars which CCL
runs, at which its executives give advice on
selling cruises.
“People are increasingly growing up
with the Internet, and they will be the
cruise passengers of the future,” Arison
says. “My children are in their late 20s, and
they do everything on the Internet.”
He also points out that having a Chief
Marketing Officer still in his 30s is bound
to help the brand keep up to speed on
incorporating new technology into the
marketing mix.
Social media is now a crucial part
of that mix, too. Senior Cruise Director
John Heald’s blog has attracted a huge
following and boosted brand awareness;
it now appears within the revamped
www.Carnival.com website’s new Funville
37
Million passenger brands: Carnival Cruise Lines
Dream World Cruise Destinations Spring 2010
community/social media hub section. This
also features blogs updated by other CCL
on-board staff, from captains to dance
captains, and there is an opportunity for
the public to post their own views about
CCL or comment on those in the blogs.
There are also links to Carnival pages in
Facebook, Flickr and Twitter.
“There has been a pattern in the growth
of cruising which has seen the North
American market run about 5–10 years
ahead of the UK, and 10–15 years ahead of
the rest of Europe,” says Arison.
“I can see no reason why the UK market
should not double in size to match the kind
of growth the market has experienced in
North America.
“I believe the biggest change will be that
it will become just like North America is
right now in offering cruises of just about
any length and suitable for just about
everyone. For example, there are very
few short cruises in the UK right now; but
this will change over time because of the
new higher quality ships with their greater
range of facilities.”
Arison also believes that similar growth
in the range of cruising on offer will
extend to Europe and, eventually, Asia
too. The question is how much of this will
be contributed by CCL deployments as
opposed to those of other Carnival and
rival brands.
“Although the cruise product may
have to be slightly tweaked for different
nationalities, the fact is that everybody
is attracted by the value and quality
experience it represents.”
But, until recently, Arison was reluctant to
risk those all-important yields by deploying
CCL in the notoriously price-sensitive UK
and European markets. The belief was that
there were always other Carnival brands
(notably P&O Cruises, Cunard Line and –
more recently – Ocean Village and Princess
Cruises in the UK, Costa Cruises across
Europe, AIDA Cruises in Germany and Ibero
Cruceros in Spain) better placed to source
from those markets.
CCL put a toe in the water with
Mediterranean and then ex-UK Baltic cruises,
before pulling back again in 2009 in the face
of the economic downturn, higher air fares
and adverse exchange rates. But it will return
for a full Mediterranean season in 2011 with
the new Carnival Magic making its inaugural
People are
increasingly
growing up with the
Internet, and they will be
the cruise passengers of
the future.”
season cruising from Barcelona between
May and October.
This suggests that the brand believes
there is a role for its ships in future outside
its North American and, in particular,
Caribbean comfort zone. One reason is
that featuring ships in the UK and Europe
and targeting local markets raises the
overall profile of the brand and increases
sales of its other, North America-based
cruises.
So logic suggests that – unless the
feared double-dip economic downturn
occurs – CCL will again extend to UK
departures and Northern European
itineraries in 2012/13. But its ability to
surprise and be flexible in its deployment
decisions has been a feature of CCL over
nearly four decades, so nothing can be
taken for granted.
It is also unlikely that CCL will ever
forsake its prime North American
market to any significant degree,
especially now it offers cruises from
such a wide range of homeports (18
in all, compared with 12 in 2008) that –
according to President and CEO Gerry
Cahill – 50% of the US population lives
within a five-hour drive of at least one
of them. This year it will have 12 yearround programmes from US homeports
(including newly extended ones from
Baltimore and Charleston).
On the environmental front, Arison says:
“We (the Carnival group) are lowering
energy consumption every year by
between 3% and 4% through a variety
of solutions, from new paints and hull
coatings to simply slowing the ships down.
“Technology is one answer to the
challenges we face but, in terms of
finding another radically different way
of powering our ships in an even more
environmentally friendly fashion, there is
no silver bullet out there as yet.
“Various alternative energy sources have
been put forward but they all have their
problems – even liquid natural gas – due
to the massive on-board storage space
that would be required.
“The fact is that we need to have the
technology catch up to us, even though
we are a small shipping sector and
therefore a small market.” D
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