Frank said the plan is to focus on increasing prices rather than the number of available berths.
If you think of the cruise industry in the last 10 years, theres been a dramatic growth in ships by us and our competitors, he said. To some degree, the capacity growth undermines the prices we can get in the market.
Part of the long-term growth plan: tap developing markets such as Asia, where the company has been making inroads with its Costa brand for several years. This year, Princess Cruises will enter the Japanese markets with nine sailings between April and July, and the company recently opened sales and reservations office in Toyko as well as a corporate office in Singapore. Those moves are aimed at Asian passengers, not Americans taking cruises in Asia.
Frank said he doesnt expect huge returns in Asia right away, but expects the investment to pay off in the long term. And he still believes that European brands, which cater to local markets, hold promise for growth.
Certainly I think we need to be patient in Europe because I dont think 2013 is going to be a great year for our business in Europe, he said.
Carnivals history shows the company has learned patience and how to weather bad years.
Arison, whose father Ted Arison founded Carnival Cruise Lines in 1972, remembers the early years of the company as very lean.
Its hard to envision it because it was so long ago, but the first four-to-six years were about survival, said Arison, who worked a variety of jobs in the company before becoming CEO in 1979. We were not a well capitalized company. We were just trying to survive much more well-capitalized companies competing with us with much newer ships.
The company got off to an inauspicious start: On its inaugural sailing, the Mardi Gras ran aground leaving Miami.
The company went public in 1987 and soon began acquiring other brands: Holland America Line in 1989, luxury Seabourn in 1992, Italian company Costa Cruises in 1997 and Cunard Line in 1998. In 2003, despite competition from Royal Caribbean Cruises, Carnival merged with P&O Princess Cruises to become the worlds largest cruise operator by far. Their main competitors are Royal Caribbean Cruises, which owns Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises and some European brands; and Norwegian Cruise Line, which recently announced it intends to go public.
They have been very, very good at acquisitions over the years, Zackfia said. Obviously, at this point, since they represent about 50 percent of the global industry, they may not be acquiring much more because of anti-trust.
Many of the companies the Carnival now owns have histories that date back to the 19th century and Arison sees value in making sure they hold on to their legacies.
We basically own the entire history of shipping in our portfolio of brands, he said. They have this independent culture, they have independent management, they do their own marketing, they do their own pricing.
Teijo Niemelä, editor and publisher of the Cruise Business Review, said the company chose their acquisitions wisely and took whatever steps needed to put the right management in place and nurture growth.
Every time they bought something, they have really tried to develop that brand and they have never destroyed a brand that they bought, he said.