Whilst the company management states that they have been able to cushion the impact of the recession

Humans have since time immemorial been fascinated with ships, seas and oceans. Whilst ships have in the past been used mainly for transportation of goods and people and of course for war, seafaring has always fairmont hotel new orleans been associated with travel to new and strange destinations, excitement and romance.
With the contemporary day and age being firmly focused on new alternatives fairmont hotel new orleans for leisure, excitement fairmont hotel new orleans and life experiences, the western tourism industry has astutely used this human fascination with the seas to develop an extremely desirable tourism option; namely sea and ocean cruises. Such cruises offer exciting and pleasurable vacation options for people. They are offered by specialised cruise liners and provide customers the experience of travelling on the high seas in large, fairmont hotel new orleans well appointed and luxurious ocean going vessels. Cruise holidays provide customers with luxury experiences and opportunities to engage in numerous leisure activities like (a) sun bathing on expansive ocean liner decks, (b) use of large swimming pools, (c) a range of body comfort activities through the use of spas, gyms and Jacuzzis, (d) various types of eating and dining options, and (e) a range of on ship holiday activities like games, contests, fairmont hotel new orleans singing and dancing.
The modern day cruise industry emerged in the 1970s in North America (Dowling, 2006). Whilst cruises originally aimed to provide customers with luxurious trans-ocean transportation options, the industry has since then transformed into a vacation alternative for people to travel to land based destinations or to sightseeing locations in the oceans (Dowling, 2006). A cruise now stands for a complete start-to-finish experience in luxury, comfort and the good life, rather than an option for travelling from point A to point B (Dowling, 2006). Whilst fairmont hotel new orleans cruise vacationers still form a very small segment (just about 2%) of the global tourism industry, their volumes grew from 500,000 passengers in 1970 to 6.6 million passengers in 2000 (Gisnas et al, 2008). Such volumes have continued to grow during the last decade and are estimated to be 17 million annual passengers fairmont hotel new orleans today (Gisnas et al, 2008). The industry experienced significant growth in the 1970s, when it first emerged, and has been growing at between 8 and 9% since then (Gisnas et al, 2008). Sectoral growth in the cruise sector has also not been cyclical like other shipping segments (Gisnas et al, 2008).
Carnival Corporation and plc (Carnival Corporation) is the world’s largest operator fairmont hotel new orleans of cruise ships. With 11 individual fairmont hotel new orleans brands and a total fleet of 96 vessels, the organisation operates cruises in North America, Europe and Australia (Carnival..., 2010). Whilst the global recession affected the travel and tourism industry significantly and also affected the revenues of the company fairmont hotel new orleans to some extent, Carnival Corporation expects to grow significantly in the coming years, as recessionary forces weaken and individual and business spending starts moving upwards once again (Carnival..., 2010).
This specific analysis fairmont hotel new orleans attempts to (a) examine the operations and mechanisms of the cruise fairmont hotel new orleans industry, (b) analyse the strategies and operations of Carnival Corporation, and (c) recommend suitable future growth strategies for the company.
The first cruise route, historical records reveal, was established by British P O in 1882 with the introduction of S/Y Ceylon for pleasure cruising (Cartwright Baird, 1999). The ship operated on the western coast of Norway and was well known to wealthy UK citizens (Cartwright Baird, 1999). The most famous example of a cruise liner of those days is that of the Titanic, which sank on her maiden voyage fairmont hotel new orleans from Southampton to New York, in April 1912, after a collision with an iceberg (Cartwright Baird, 1999). fairmont hotel new orleans Whilst trans-ocean services between North America and Europe expanded greatly between the two great wars, the emergence of commercial aircraft after the closure of the Second World War led to the elimination of human transportation through ships (Cartwright Baird, 1999). The years that followed the closure of human transportation through ships however saw the emergence and the steady growth of pleasure and tourism oriented cruises (Cartwright Baird, 1999).
The cruise market is currently dominated by three important fairmont hotel new orleans organisations namely, Carnival Corporation (the subject of this study), Royal Caribbean International and Star Cruises. Whilst the industry was home to a number of players in the 1970s and 1980s, progressive mergers and alliances have led to the formation of oligopolistic market situation that is dominated by three strong fairmont hotel new orleans entities (Gisnas et al, 2008). Carnival Corporation leads the business with a 45% market share, followed by Royal Caribbean (21%) and Star Cruises (10%) (Gisnas et al, 2008). Appendix 1 provides fairmont hotel new orleans details of the capacities of the major cruise liners.
The cruise market is divided into two main geographic segments, (a) the US market and (b) the European market. The US market, which includes North America and the Caribbean, forms 62% of the total market, whereas Europe accounts for 24% of cruise users (Kamery, 2004). The European market, whilst smaller fairmont hotel new orleans than the US market, is growing fairmont hotel new orleans swiftly and is expected fairmont hotel new orleans to increase by more than 9% per annum in the coming years (Kamery, 2004). The UK market fairmont hotel new orleans has until now been the dominant European market, even as the German, Scandinavian, Benelux, Austrian and Swiss markets are showing strong growth (Kamery, 2004).
Cruises can be segmented fairmont hotel new orleans into five main categories, namely contemporary cruises, budget cruises, premium cruises, luxury fairmont hotel new orleans cruises and special cruises. Appendix 2 provides details of the different types of cruises.
The industry can otherwise be segmented by languages, which surprisingly is an important point of differentiation (Gisnas et al, 2008). Individuals prefer to go on cruises with people who speak the same language (Gisnas et al, 2008). Important market fairmont hotel new orleans segments are (a) American families, (b) senior citizens from the EU, (c) conferences and incentives, (d) themes and (e) adventure (Gisnas et al, 2008). In North America the target population for cruises companies fairmont hotel new orleans comprises of adults, who are more than 25 years in age and earn more than 40,000 USD per annum (Gisnas et al, 2008).
The target market includes (a) people who have cruised before, (b) vacationers who have not previously engaged in cruises and (c) non vacationers as well (Gisnas et al, 2008). The segment makes up practically 44% of the US population (Gisnas et al, 2008). Whilst the average age of passengers has come down to just below 45 in the US, The average age of passengers in the UK is also coming down significantly (Gisnas et al, 2008).
The potential of the market is high because the existing penetration rate at 3% for North America, 1% for Europe and 2% for UK is very low. The main markets continue to be North America and Europe. The Asian market is however growing very slowly. Appendix 3 Provides details of passengers both by nationality and by origin.
Carnival Corporation fairmont hotel new orleans plc is the market leader of the cruise industry. Carnival Corporation was founded in 1972 by Ted Arison (Carnival..., 2010). Both Carnival Corporation and Carnival plc have grown organically, as well as through mergers that have led to significant increases in organisational operations (Carnival..., 2010).
The present organisation came about from a merger between Carnival Corporation and P O Princess Cruises plc, wherein it was agreed that P O would be listed on the London Stock Exchange (Carnival..., 2010). The organisation is thus dually listed on the London and New York Stock Exchanges and has head offices at Miami, USA, and at Southampton, UK (Carnival..., 2010).
The company has 11 cruise line brands, each of which controls a geographical location. To elaborate, AIDA cruises controls the German business, Carnival Cruise lines, fairmont hotel new orleans Holland America Line, Princess Cruises, and the Seaborne fairmont hotel new orleans Cruise Line operate in the United States, Cunard Line, Ocean Village, and P O Cruises service the UK market, Costa Cruises controls the Italian business, Iberio Cruises controls the Spanish business, and P O Cruises Australia controls the Australian business (Carnival..., 2010).
The organisation earned revenues of 13.1 billion USD in 2009 compared to 14.65 billion USD in 2008. It owns 93 ships, has a passenger capacity of 180,746, and employs 85,000 people. Carnival Corporation carried 8500 passengers in 2009 (Carnival..., 2010).
Whilst the company management states that they have been able to cushion the impact of the recession effectively, the financial analysis of key performance indicators reveals fairmont hotel new orleans a different picture. Both sales and profits have come down sharply (Carnival..., 2010). It also needs to be noticed that the sales of the organisation have come down by 10 %, even as the cruise industry overall contracted only by 3 % in 2009 (Carnival..., 2010).
The PESTEL frame works helps analysts to examine environmental factors in a methodical manner (Porter, 1980). The specific examination of political, economic, social, technological, environmental and legal factors assist in understanding key change drivers and external influences on the working of organisations (Porter, 1980). A PESTEL analysis helps organisational managements in aligning organisational strategies with environmental realities and work towards ensuring that organisations do not purposely follow strategic rules that are at variance or in opposition to environmental forces (Porter, 1980).
With cruise lines essentially being international in the nature of their operations, their working can be significantly affected by terrorism related conditions (Porter, 1980). Increase in terrorism activities invariably leads to stricter immigration fairmont hotel new orleans laws and to reduction fairmont hotel new orleans in tourism enthusiasm (Porter, fairmont hotel new orleans 1980). Apart from terrorism, cruise fairmont hotel new orleans activity can also be affected by political instability in geographical locations that are part of the cruise network, as well as by tourism related ta