Carnival: Having More Fun

“We need to have a variety of ships to handle a variety of passengers in a variety of markets,” said Bob Dickinson, president and CEO of Carnival Cruise Lines in an exclusive interview with Cruise Industry News.

The statement was made in response to being asked if he had a favorite ship (business) model for the future and what Carnival intends to do with its older tonnage.

Speaking just prior to taking delivery of the Carnival Valor, Dickinson said: “It is not about one size fits all. Without smaller ships, we could not have done much of what we have. If you recall, we even divided the Tropicale between Tampa and New Orleans.

With the Valor, Carnival’s fleet has grown to 20 ships, with yet another Conquest-class ship coming next summer, the Carnival Liberty. But then there is a gap in 2006, before the Carnival Freedom in 2007.

In the meantime, is the competition catching up, building bigger ships? “The bottom line is that we carry more people and make more money,” Dickinson answered.

And, he noted, the last contract between Carnival Corporation and Fincantieri included two ships which have not yet been assigned to a brand. “Let’s say we are in the hunt,” Dickinson said.

The 180,000-ton Pinnacle Project is also in the works. “If Micky (Arison) said it, it will happen,” Dickinson said, “but the earliest (delivery) in 2008, I believe.”

Meanwhile, Dickinson plans to hold on to Carnival’s older ships, the Holiday and the Celebration, saying that the line has invested heavily in refurbishing these vessels and that they are the perfect . size for pathfinder operations.

At Carnival since 1973, Dickinson sounds as upbeat and enthusiastic as ever as well as combative, taking a few swings at the competition here and there. “We have a lot more new ships coming. We are offering new itineraries, and many new subtleties in food and service. But we do not send out a press release every time we do something. Instead, we surprise the guests onboard,” he said.

Added Vicki Freed, senior vice president of sales and marketing: “We blend the best of both value and price with premium touches.

“We are in the contemporary market category price-wise,” Freed said, “but we are offering a premium dining experience, for example, and we are continuing to upgrade our ships, including duvet covers on the beds in every stateroom.”

Additional enhancements may include special concierge service, but Freed was not ready to divulge any details yet.

“We are focusing on sharpening our message of how good we are,” continued Dickinson. “When people cruise with us, they rate us significantly higher than people who have not cruised with us. “We continue to improve. We have better food, for instance, than either of our direct competitors,” he added.

“We also have a great reputation for our entertainment and general cruise experience.”

New ad campaigns are set to break next month, and for the first time, Carnival is committed to both newspapers and what Freed called a major magazine drive.

“You will see us everywhere,” she added.

Marketing targets include family reunions and multigenerational travel.

Carnival’s return to Europe is also going well, according to Freed, who said that 50 percent of Carnival’s eight summer cruises in the Mediterranean aboard the new Carnival Liberty has already been sold. The bookings resulted from a mailer inserted in the cruise line’s loyalty magazine, Currents, mailed to 2.8 million households that have cruised with Carnival within the past 24 months. 

“When they learned we were going to Europe, they wanted to be part of it,” Freed said about the past passengers. “We are attracting families with children and teenagers.”

With a bigger fleet and more homeports, Carnival’s passenger base is much broader than it used to be, Dickinson said. In addition, with cruises in Alaska and now in Europe and with longer cruises, Carnival is also attracting more sophisticated passengers.”On the longer cruises, 80 percent have cruised before,” Dickinson explained. “On the shorter cruises, 60 percent to 70 percent have never cruised before.” Also, the shorter cruises tend to attract more active passengers.

Carnival is also attracting more repeaters. “In 2000, only 10 percent of our experienced cruise passengers had cruised with us before, now we are carrying 19 percent repeaters,” Dickinson said.

“That there has been a 90 percent increase in experienced cruisers trying Carnival, to me reaffirms the quality of our current product,” he added.

The product is much, much broader, Dickinson underscored. “In 2004, about three million guests cruised with us – or about 30 percent of all North Americans who cruised.”

And of all the people who are still alive and have cruised before, 45 percent have cruised with Carnival. That means that 55 percent have not, according to Dickinson, who would like to take that low-hanging fruit and convert it to Carnival’s brand and concept.

While the majority of Carnival’s capacity is still in the Caribbean, the line has grown its homeports from three 15 years ago – Miami, Los Angeles and San Juan – to 19 today. And, in 1982, Carnival only offered seven-day cruises, Dickinson pointed out. Today, Carnival offers three-, four-, five-, six- seven-, eight-, 12- and 14-day sailings.

“We have broad psychographics,” he said, continuing on one of his favorite subjects. “We are not a restricted country club. We are egalitarian – more inclusive, just like Las Vegas and Orlando.

“In Las Vegas, for example, you can spend a couple of nights or a week or more.”

Another favorite subject is pricing. “Right now a comparable land vacation costs twice as much as a cruise on Carnival,” Dickinson said who thinks it is ridiculous that a cruise should be half the price of a comparable land vacation. Only 16 percent of the North American population has ever been on a cruise; that is why the market has great difficulty understanding the value of a cruise, he said.

Cruises should be priced at maybe two-thirds or three-fourths the price of a comparable land vacation, according to Dickinson, who noted that cruise pricing would still be at a 25 percent discount.

In time, he said, cruises should not be discounted compared to land vacations.

“We should be priced the same,” Dickinson said. “Cruises will still offer value – we offer more for the same price.

“It will happen that the market will understand how good cruises are and allow us to inch the prices up. Our pricing is where it was in 1999.”

(The full interview plus interviews with other Carnival executives will run in the winter issue of the Cruise Industry News Quarterly.)

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