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Issues Effecting Carnival Cruise Line

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Issues Effecting Carnival Cruise Line

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  • August 13, 2013
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Carnival Cruise Corporation
* Carnival Cruise faces issues with entry barriers as the cruising industry requires a large sum of investment, waiting period for the ship to be constructed, and challenges related to international law, financing, foreign currency fuel hedging and contracts, marketing, promotions, and staffing. Expanding into foreign countries, especially in regions such as the United Kingdom where the cruising industry is at an early stage of development and has far lower penetration rates. * Carnival Cruise derives a majority of its revenue from US customers. This is a problem as Carnival Cruise faced a 23% loss in 2009. The over-dependence on the US market makes Carnival Cruise vulnerable to the economic fluctuations of the American economy and dependent on customers’ disposable income. * Carnival Cruise faces a potential problem with the shift in passenger demographics in the cruising industry; as the average age has been steadily falling and has caused a surge in the 25 years and older age group. This can be seen as an issue because the cruise line will need to renovate in order to better cater to this younger demographic. * Carnival Cruise also faces potential problems with the upcoming expansion of their top competitor Royal Caribbean whose cruise lines offers their passengers unique tour destinations of Alaska, Asia, Australia, Canada, Europe, Latin America and New Zealand. In addition, Royal Caribbean also offers their passengers the ultimate luxury experience offering a variety of onboard activities, services, swimming pools, beauty salons, exercise and spa facilities sun desks, ice skating rinks, inline skating, rock-climbing walls, surf machines, basketball courts, bungee jumping trampolines, miniature golf-courses, waterparks, gaming facilities, lounges, bars, restaurants, and cinemas. * In addition, Carnival Cruise faces problems that the cruising industry as a whole struggles with, such as a. Seasonality: The...