Carnival Empire: Three Million Pax by 2000

Carnival Corporation and its affiliates are continuing their march toward a global empire of cruise interests, hotels, airlines, tour companies and travel agencies. According to estimates by Cruise Industry News, Carnival’s cruise operations will have the capacity to move three million passengers annually by the year 2000.

Next year, Carnival is ex-panding into the Asian market through Carnival Cruises Asia with Hyundai Merchant Marine and is expected to close its $300 million purchase bid for Costa Crociere within the next two months.

Further, carnival is reportedly close to purchasing the Club Med 1 and Club Med 2 from owner Services et Transports. It is believed that the two vessels would enter the fleet of Windstar Cruises, a division of Holland America Line. Rumor has the Club Med 1 shifting from its homeport in Martinique to the Bahamas market should the sale go through.

In the hotel sector, Carnival Hotels & Casinos, which is 25 percent owned by Carnival Corporation has just made an offer for the purchase of the Westin Carambola Beach Resort on St. Croix, U.S. Virgin Islands, according to the resort’s general manager, Jeff Fazio. Unconfirmed reports suggest Carnival will add another 150 rooms to the existing 150 rooms at the hotel, thereby qualifying the property to run a casino under the Virgin Islands’ new gaming law. Other reports connect Carnival Hotels & Casinos with management of yet another gaming development slated for Frederiksted, St. Croix.

Meanwhile, the hotel company recently launched its first Mexican property, the Grand Hotel & Resort Puerto de La Navidad, on the Pacific Coast near Puerto Vallarta.

While the acquisitions of Carnival Hotels & Casinos are not specifically designed to work hand-in­ glove with market ex-pansion by Carnival Corporation, the two entities both confirmed they would work together if it made business sense. And both entities are now focusing on expansion in the Caribbean.

In terms of St. Croix, a relatively undeveloped U.S. territory, local business and government officials speculate that it is no accident that Carnival’s hotel arm is talking to various developers and property owners there, and that eventually, the island could play a more significant role for Carnival Corporation’s cruise operation, which currently calls in Frederiksted with the Carnival Destiny.

Airline Interests

Carnival is involved in the airline industry indirectly, through planes owned by U.K. tour operator Airtours, of which Carnival owns a 29.6 percent stake, as well as through the holdings of Carnival Chairman Micky Arison.

But involvement in the airline sector is growing. Arison recently announced that he would invest $30 million in Pan American World Airways, giving him around 42 percent of the company’s outstanding stock. Under the deal, Pan Am acquires Arison’s Carnival Air Lines and its 27 aircraft will be added to Pan Am’s existing fleet of two planes. On April 7, a $25 million private placement was completed, possibly for yet more aircraft.

Arison’s airline will remain a separate entity from Carnival Corp., and it does not specifically cater to the cruise operation’s need for air seats. However, the synergistic possibility for future cooperation between the two entities certainly exists.

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