Arnold Donald Bullish on Carnival Corp; Looking to Drive Revenue

The QM2 recently celebrated her 10th birthday. (photo: Sergio Ferreira)On an upbeat conference call with reporters on Thursday morning, Carnival Corporation CEO Arnold Donald continued to underscore the company’s new direction of “communicate, collaborate and cooperate” across 10 brands.

For example, he said Carnival is the fifth biggest purchaser of airline travel in the world, but they have never acted like it – and are now looking for best practices and to be able to leverage purchasing power.

“Just taking best practices across the 10 brands … will lift us dollars per ticket,” said Donald. “Just simply doing best practices across the brands may lift us a few dollars … a few pennies adds up to real money.”

With millions of passenger cruise days across its fleet, saving costs and increasing revenue should drive major returns for stockholders.

In China and Australia, the company is growing quickly, underscored by the Sapphire Princess starting China service this week and a recent announcement sending the Costa Serena to China next year.

Down Under, P&O Australia will get two more ships in the Ryndam and Statendam as Holland America gets new tonnage.

“The Chinese government has a plan for the cruise industry,” continued Donald. “They want it to be a primary industry.”

Mining data from a database of 40 million guests, Carnival is able to look at behaviors, purchasing patterns and brand characteristics, which will let the company adjust marketing efforts going forward.

Donald continues to work on the new to cruise.

“As an industry we have not done a good job communicating effective to the public,” he said, adding later: “It’s not just 3,000 people in a buffet line.”

As for new ships from competition, that will be good for everyone, Donald explained. New ships will generate buzz and media exposure which will be a positive for all companies.

With the industry’s once near-maniac growth pace leveling off, Donald is looking at driving ticket prices and onboard revenue.

“The reality is the only way you’re going to grow is onboard revenue and ticket yield,” Donald continued, “and slow growth by adding ships and capacity over time. But we need to have demand be much higher, that is a challenge. For us, a key to that is understanding the guests and what wows them and motivates them.”

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