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Spring 2010
Arison not afraid to use the F* word ... FUN
Carnival 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.
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 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 todays
passengers were time-transported 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 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 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 year-round
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.” |
