A choppy start becomes a profitable 50-year trip for Carnival Cruise Line | app


MIAMI — Carnival Cruise Line has come a long way since its first cruise: On March 11, 1972, the Carnival Mardi Gras left the Port of Miami for the line’s maiden voyage, packed with passengers, press and crew.

He didn’t make it far though. Mardi Gras washed up on a sandbar off Miami Beach. It took 24 hours for the ship to be freed.

“The ship was stuck on this sandbar and everyone was saying, ‘It’s never gonna work,'” said Peter Ricci, director of Florida Atlantic University’s hotel management program.

“When they got this thing off that sandbar, it was the start of one of the most successful and profitable leisure and vacation businesses the world has ever seen,” said Philip Levine, a cruise marketing magnate and the former mayor. from Miami Beach.

Carnival Cruise Line, which eventually gave way to parent company Carnival Corp., the world’s largest cruise operator, turned 50 this month. Founded by Israeli-American businessman Ted Arison in Miami, it is now one of the largest companies in the city with 40,000 employees.

“We sail with about 6 million passengers a year and about a million of them are children,” said Christine Duffy, president of Carnival Cruise Line since 2015. “I think one of the smartest decisions was was to lay the groundwork for Carnival, which is all about having fun…. We put our own spin on who our guests are, so for Carnival, it ended up like a roller coaster on top of a cruise ship.

Levine called the venture a “local Miami success story.”

“When you think of the number of local businesses in Miami that achieve this level of success, you can count it on your hands,” he said. “And Carnival has certainly become the biggest. Los Angeles has the entertainment industry, New York has Wall Street, and Miami has cruises. Cruising is the industry that Miami exports to the world.

Cruising existed before Carnival, but it was widely considered a mode of transportation. With the deployment of the Boeing 747 in 1969, commercial air travel became more accessible to the middle class in the 1970s. Arison, who was born in British-controlled Palestine in 1924, purchased a single ship, intending to make the ship the main attraction, rather than the destination.

“Ted Arison invented the modern cruise. He came up with the concept of the ship being a floating hotel. Carnival invented the ideas of the buffet, fixed meal times, onboard casinos and all the entertainment and entertainment options,” Ricci said.

Levine, who worked at Carnival in the late 1980s shortly after graduating from college, said Ted Arison was an “incredible, swaggering entrepreneur.”

His son, Micky Arison, who led Carnival as CEO from 1990 to 2013 and remains president and owner of the Miami Heat basketball team, “by contrast, is a stricter operator. He’s more buttoned up. What perfect combination.

While Carnival and most of the world’s largest cruise lines are headquartered in Miami, nearly all cruise ships are foreign-flagged to avoid US justice and tax systems. The elder Arison practiced this not just in business but in his personal life: In 1990, he renounced his US citizenship and moved to Israel in part to avoid US estate and inheritance taxes. He died a billionaire in October 1999 in Tel Aviv.

Carnival expanded through the 1970s and 1980s, buying more ships and eventually completing a series of acquisitions that made Carnival Corp. the largest cruise line in the world. Carnival cemented its dominance with the acquisition of California-based Princess Cruises for $7 billion in 2003. Carnival Corp. operates nine brands, including luxury brands like Seabourn and Cunard, the iconic British cruise line that was an early pioneer of transatlantic steamships and built the ships Queen Elizabeth and Queen Mary.

While competing brands like Royal Caribbean continue to unveil ships that outdo themselves, with more size, capacity and more amenities, Carnival Cruise Line has largely stuck to its bread and butter: affordable cruises that target families. working-class Americans. The vast majority of their 23 ships are based in the United States and they have homeports in places like Mobile, Alabama, and Norfolk, Virginia.

“I named Carnival ‘America’s cruise line’ when I joined seven years ago. … The kind of culture we have on board is really a very American experience,” Duffy said. , noting that the company has 14 homeports in the U.S. “It’s an accessible, available and affordable vacation with most of our sails departing from the U.S.”

Andrew Coggins, a professor at Pace University’s Lubin School of Business who specializes in the cruise industry, said Carnival competes more with land-based vacations than other cruise lines.

“They’re targeting Central America,” Coggins said. “Royal Caribbean is their competitor, but Carnival hasn’t grown that big, which must be due to its design. Their real competition is Las Vegas, Orlando, and Branson, Missouri.

Carnival’s 50-year tenure has been far from smooth. On the business side, he founded several companies that foundered, including Carnival Air Lines, which operated from 1988 to 1997, and a casino in the Bahamas, which reportedly lost $135 million.

Carnival Corp. and the cruise industry came under intense public scrutiny when the coronavirus pandemic hit in March 2020. Passengers and crew were stranded at sea, while the virus spread like a trail of powder on ships.

Passengers were mostly able to disembark within a month, but crew members, from countries around the world, were stranded on some ships for months, some without pay.

In July 2020, a Miami Herald analysis found that there were at least 3,900 COVID-19 infections on ships operated by multiple cruise lines, ultimately resulting in 111 deaths.

Crew members aboard Carnival Cruise Line told the Miami Herald four months later that they had only been paid for part of the time stranded on the ships, and workers at Carnival’s Princess Cruises said that they were not paid at all.

“I don’t think anything was done wrong, as much as I think nobody really understood what this COVID virus was and what to do or not to do,” said Duffy, who led cruise industry lobbying. organization in Washington, DC, Cruise Lines International Association. “I think what’s been lost in a lot of the coverage is the fact that these cruises are already underway. And those decisions that weren’t necessarily made by cruise lines, but by governments.

Carnival and many cruise lines had to dig deep to keep capital afloat. Duffy noted that Carnival ships require at least 130 crew members at all times, not to mention fuel costs.

In 2017, Carnival’s Princess Cruise Line was fined $40 million for illegally dumping oily waste and falsifying logbooks to conceal it, the largest environmental fine for polluting ships in history. , according to the US Department of Justice.

Accordingly, Carnival Corp. and its nine cruise brands were placed on probation for five years. Carnival violated probation twice, resulting in a $20 million fine in 2019 and another $1 million fine in January of this year. The January breach says the company failed to establish a court-ordered independent internal investigation office and accused the company of promoting “a culture that seeks to minimize or avoid negative, uncomfortable information or threatening to the business, including top leadership.”

Duffy said Carnival Cruise Line had “dealt with” the non-compliance charges in federal court and the company was “in good standing.” We really worked hard to show improvement. Carnival Corp.’s five-year probation ends in April.

But environmental activists say Carnival has a reputation for ignoring environmental issues.

“They have been unable or unwilling to monitor themselves,” said Kendra Ulrich, director of expedition campaigns at Stand.earth, an environmental advocacy group. “At this point, we are pushing for increased government regulation.

“For a company the size of Carnival, it’s small change for them. It’s not big enough to drive the kind of change within the industry. It really highlights the fact that it there has to be outside monitoring,” Ulrich said. “As far as we could tell, these fines are simply seen as the cost of doing business, rather than an actual punishment for significant damage to the environment and air pollution.”


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