Carnival Corporation

Author:Judson Knight, Mark Lane

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3655 NW 87th Avenue

Miami, Florida 33178-2428


Telephone: (305) 599-2600

Fax: (305) 599-2600

Web site:


Beginning in the mid-1980s Carnival Cruise Lines emerged as a leader in the global market, and within a decade the Miami-based carrier had become the world's leading cruise operator. With a total of more than 30 ships and a broad base of holdings, Carnival Cruise Lines had become Carnival Corporation in 1994. By that time it had long since established a winning ad campaign, with television spots featuring entertainment personality Kathie Lee Gifford. Beginning in early 1997, however, the company took a new approach, using animated figures—most notably dancing fish—in place of human performers, with Gifford retained for the voice-over.

The agency of record, HMS Partners, typically employed a budget of $20 million to present two spots per year for the campaign, which was loosely titled "Fun Ships" and ran through 2000. The individual commercials, featuring their respective "stars"—the computer-generated images—cavorting to a calypso beat while Gifford's voice-over touted Carnival, were part of a continued branding effort in which Carnival sought to present itself as the "Fun Ships" line. "We own fun," senior vice president of marketing Vicki Freed told Jeffery D. Zbar in the Fort Lauderdale Sun-Sentinel. "We've been investing in fun for 20 years now. All the research tells us that our brand is known for fun."

As a result of this campaign and other moves by Carnival—such as the purchase of rival lines, the construction of new ships, and innovative marketing methods—bookings on Carnival ships continued to grow in 1998, 1999, and 2000, as they had grown for many years preceding. With expanded fleet capacity and more ships slated to be finished in the early years of the new century, however, Carnival and other cruise lines were especially vulnerable to the downturn in the larger travel and tourism industry following the terrorist attacks on September 11, 2001.


In 1972 Ted Arison, a former executive with Norwegian Caribbean Lines, joined forces with Meshulam Riklis of American International Travel Service (AITS) to form Carnival Cruise Lines. The latter, an AITS subsidiary, launched its first ship, the Mardi Gras, shortly thereafter. Like some farcical version of the Titanic, the Mardi Gras ran aground on its maiden voyage. With this inauspicious start, the nascent line was soon heavily in debt, and in 1974 Arison bought out Riklis for almost nothing.

By 1975, however, Arison had turned a profit by careful positioning with regard to Carnival's target market. He added a second ship in 1976 and a third the following year. In the midst of a market depressed by high inflation during the late 1970s and early 1980s, Carnival prospered under the leadership of Arison and

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his son Micky, who became CEO in 1979. By 1987, when it went public, Carnival was the leading cruise operator in the world.

In the late 1980s Carnival diversified, adding short cruises to, and a gambling casino in, the Bahamas. There were also land tours, a hotel chain, and—following the 1989 purchase of Holland America Line—luxury cruises. By the mid-1990s the newly renamed Carnival Corporation had established a heavy presence in Europe that culminated with the early 1998 purchase of the upscale Cunard line of Great Britain for half a billion dollars.


From the mid-1970s Ted Arison had shown an ability to recognize the target demographic of Carnival Cruise Lines, and more than 20 years later his son seemed to have inherited the trait. Furthermore, Micky Arison, with his family-controlled 45 percent of the company, continually worked to refine Carnival's focus on its target market.

The elder Arison recognized early that the cruise line's customer base was built around youngish...

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