This financial analysis report examines two high profile competitors, Royal Caribbean International and Carnival Cruise Line, within the cruise industry in order to evaluate company performance and financial health. The industry started a major growth phase in the late 1960s and early 1970s achieving more than 2,100 percent growth. The early goal of the cruise industry was to develop a mass market since cruising was until then an activity for the elite. A way to achieve this was through economies of scale as larger ships were able to accommodate more customers as well as to create additional opportunities for onboard sources of revenue. The global growth rate of the cruise industry has been enduring and stable, at around 7% per year in spite of economic cycles of growth and recession. For instance, the financial crisis of 2008-2009 has not impacted the demand for cruises. This underlines that the industry has been so far fundamentally supply based; the ships are built and the customers are found to fill them through various marketing and discounting strategies. Cruise lines companies compete with other vacation alternatives, such as land-based resort hotels and sightseeing destinations for consumers’ leisure time. Demand for such activities is influenced by political and general economic conditions. Companies within the vacation market are dependent on consumer discretionary spending. The year 2012 was overall a very difficult for the cruise industry. Carnival International is still recovering from the effects of sinking of Costa Concordia off Italy in January 2012. On other hand, Royal Caribbean’s biggest challenge in 2012 was due to one-time impairment charges of nearly $385 million related to Spanish line Pullma... ... middle of paper ... ...t example of short-term worries providing an opportunity for long-term investors to make a great investment. Works Cited http://media.royalcaribbean.com/content/en_US/pdf/13034530_RCL_2012StwrdshpTwoPgrs_v4.pdf http://analysisreport.morningstar.com/stock/research?t=RCL&culture=en-US®ion=usa&cur=USD&productcode=MLE http://answers.businesslibrary.uflib.ufl.edu/a.php?qid=76331 http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=RCL:NYQ http://www.miamiherald.com/2013/03/15/3289232/carnival-lowers-financial-outlook.html http://www.ukessays.com/essays/tourism/sustainable-measure-for-royal-caribbean-tourism-essay.php http://beta.fool.com/ruperthargreav/2013/03/05/does-carnivals-current-ratio-present-problem/25676/ http://beta.fool.com/hoangquocanh/2013/03/20/-161/27482/ http://beta.fool.com/kwmatt82/2013/01/23/royal-caribbean-earnings-bigger-better/22325/
In this essay, the author
- Analyzes royal caribbean international and carnival cruise line in the cruise industry to evaluate company performance and financial health.
- Explains that the cruise industry started a major growth phase in the late 1960s and early 1970s achieving more than 2,100 percent growth.
- Analyzes how the year 2012 was a difficult year for the cruise industry. carnival international is recovering from the effects of the sinking of costa concordia off italy in january 2012.
- Explains that the cruise industry is constantly threatened by events that disrupt their operations. hurricanes in the u.s., the tsunami in japan and the volcanic ash cloud over parts of europe are obstacles.
- Analyzes how carnival international's events have resulted in reduced bookings, forcing the company to give discounts in a bid to rebuild customer base. this strategy could do more harm than good in the long run.
- Explains that carnival is capable of navigating its way through stormy waters with an industry-best profit margin ratio of 8.44%, around $3 billion in operating cash flow, used $1.8 billion to fund net capital expenditures, and left with $1.2 billion of free cash.
- Explains carnival is facing two big headwinds: marketing and promotions have increased in order to boost ticket sales, negatively impacting margins and earnings. the broader market looks to bubbly.
- Opines that royal caribbean cruise line's massive debt load and single digit profit margin are the major weaknesses of the company.
- Explains that royal caribbean has consistently improved revenue over the past three years, but earnings declined in 2012. innovation and quality of its vacation products have helped it remain a relevant player.
- Opines that royal caribbean has the newest and jazziest fleet in the industry which generates marketing buzz that attracts first-time cruisers at premium prices.
- Analyzes how royal caribbean provides an opportunity for long-term investors to make a great investment despite all the drama.
- Cites http://markets.ft.com/research/markets/tearsheet/forecasts?s=rcl:nyq.
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- The Cruise Line Industryexplanatory essayCarnival Cruise Lines was the most popular and most profitable cruise line in the world. In regards of threat of new entrants, it is very difficult to enter in the cruise industry. The competition ne...
In this essay, the author
- Explains that the economic and political forces affecting the cruise industry are threats to the company and the industry.
- Opines that the political issues in mexico and africa were uncertain and problemsome. the cruise line didn't feel safe going to these ports.
- Explains that the cruise line's two opportunities were social culture and technological as they turned to europe for the 2009 year in which they gained market share.
- Explains that the company upgraded their ships and built new ones that will be ready to set sail in 2014. the technology has increased the cruise travel.
- Explains that carnival cruise lines was the most popular and profitable cruise line in the world. the competition needs to have great resources to be part of this industry.
- Explains carnival's strong position in respecting the bargaining power of buyers. carnival increased online and social media advertising utilizing facebook, youtube, twitter, flickr, and podcasts to allow for two-way conversations with consumers.
- Opines that carnival is in a weak position, since they can be substituted for another vacation option.
- Explains that the company's largest purchases were for travel agency services, fuel, advertising, food and beverages, hotel and restaurant supplies and products, airfare, repairs and maintenance, dry- docking, port facility utilization, and communication services.
- Explains that there are several cruise companies competing with carnival, including royal caribbean, disney, and norwegian cruise line.
- Explains that disney cruise line had two cruise ships, each having 3,508 berths, and used its ships primarily as a complement to its theme park vacations.
- Explains that norwegian cruise line had 11 ships with a berth capacity of over 23,000.
- Explains that carnival had entered into agreements with unions covering certain employee categories, and union relations were considered to be good. the american maritime union had cited carnival (and other cruise operators) several times for exploitation of its crews.
- Explains that all ships and operations conformed to the solas (safety of life at sea) regulations adopted by most seafaring nations.
854 wordsRead More - Changing Current Marketing Strategy for Cruise Lineopinionated essaySea Goddess Cruises, Limited (SGC) is obviously not accomplishing what it needs to financially to obtain a fair share of the market. There are a number of current strategies that will be reconsidered and rejected.
In this essay, the author
- Explains that sea goddess cruises, limited (sgc) is not accomplishing what it needs to financially to obtain a fair share of the market. sgc should eliminate all plans for monosegmenting.
- Opines that sgc's current advertising strategy has hurt it in the sense that consumer awareness is considerably low.
- Opines that a third strategy that has been rejected is branching out into the family market. currently, all but two rooms aboard the sea goddess i and ii are doubles.
- Opines that it would be a waste of company dollars to target singles because sgc's facilities are too limited.
- Explains that a package was discussed to fit into the spring break period for college and high school students, but was rejected for several reasons.
- Suggests that sea goddess cruises should try to merge with a larger company, such as carnival, to boost customer awareness.
- Opines that sea goddess needs to undergo major changes, which could lead to a more positive business image. the strategies that have been rejected in this report will help lead sgc to increased profits and customer awareness.
1080 wordsRead More - Ryanair Case Studyanalytical essay...fares, which in turn affects their profit. The other four marco forces can be exploited to the LCCs advantage. Technology is LCCs best option to expand its business as its low cost and aligns with the LCC model. Deregulation in other markets serves as an opportunity for LCCs to expand into other regions and tap on the latent potential of the market. Most industries have a direct proportional relationship with the economy; however, the LCCs have a inversely proportional relationship with the economy and they can take advantage of the economic downturn to improve its financial position. Last but not least, the demographic factor dictates the market that LCCs should target and if done properly, it will provide a constant stream of revenue. In all, the macro-environmental factors cannot be ignored as they present could present an opportunity or threat to the airline.
In this essay, the author
- Opines that identifying the marco-environment factors that may have an impact on the airline industry will enable airlines to make better decisions and to exploit or reduce the impact of those macro forces.
- Explains that the demographic environment includes study of human populations in terms of size, density, location and other statistical information. airlines need to serve airports and markets where they can generate sustainable levels of traffic and yield.
- Explains that the airline has its own fixed cost, which is fuel and labour. the cost of fuel is a third of the airlines operating cost.
- Explains that lccs compete mainly on price and the strategy to fuel hedge is particularly helpful because costs are difficult to pass on to passengers.
- Explains that the introduction of the internet freed airlines from relying on global distribution systems. low cost carriers can make full use of internet in many ways, such as selling tickets on their own website.
- Explains that demand for air travel decreased after the september 11 attacks, causing a shift in the preference of travellers for certain destinations.
- Analyzes the impact of deregulation on the airline industry, stating that the liberalized market allowed lccs to pick up the price-sensitive market share by offering cheaper tickets.
- Explains that only fuel has a negative impact on airlines and the alternate strategy to fuel hedge is key to adjusting their airfares, which in turn affects their profit.
1714 wordsRead More - Nt1330 Unit 2 Caseexplanatory essayBy checking the percentage of different groups of travelers, we found out that business and leisure travelers are nearly equal to each other, but business travelers are always a little higher than leisure travelers in overall. Therefore, we were more aggressive with Miami in our price increases for the weekdays because most of our customers are not price sensitive. Based on a few results of ours, they also showed that increasing price will benefit us more in profits. For the weekends, the market size of leisure travelers is higher. In order to match with the inelastic demand, we adjusted our price based on the demand
In this essay, the author
- Explains that tampatampa is a major business center, which could explain why the demand rate of weekdays was always higher.
- Explains that while tampa is a well-known destination for business purposes, demand was lower compared to orlando and miami throughout the year.
- Explains that orlando is known for its tourist attractions and theme parks, and that business and leisure travelers' amounts were almost the same for weekends. they keep the prices high for the weekdays as it is an elastic demand market.
- Explains that by targeting business travelers, they were able to make more profits, despite the availability of close substitutes. business travelers remained as their major customers and thus boost their profits.
- Explains that miamimiami is a major center for both business and entertainment industries. business travelers are always higher than leisure travelers in overall.
- Explains that when demand is elastic, we tend to increase prices, and vice versa. orlando had the largest market size amongst these 3 cities in florida.
529 wordsRead More - Airline Industryanalytical essayThe airline industry is extremely influenced by the elasticity of demand, externalities, wage inequality, monetary policies, and fiscal policies. The elasticity of demand is impacted solely on the current market conditions, and the consumer’s reason for travel. The September 11th tragedy has had a very damaging affect on the airline industry. It has impacted the fiscal and monetary policies, supply and demand, and it has created many problems worldwide with employment. The airline industry is perceived as being unpredictable because it is relies on the current market, and the market is always changing. Incidents such as inflation, oil prices and terrorist attacks seriously influenced the demand for airline tickets throughout the years. Competition from other airlines consistently affects the price of airline tickets because it allows the customer other companies to choose from. Alternatives are to travel by train, car, or avoiding travel whenever possible, and consumers have resorted to all of these substitutes during unstable times in our economy. The elasticity of demand is very much affected by the customer's purpose for travel. Airline customers usually fly for business or pleasure.
In this essay, the author
- Explains that the airline industry is influenced by the elasticity of demand, externalities, wage inequality, monetary policies, and fiscal policies.
- Explains that airlines combine their income and inventory costs to establish ticket prices. the airline industry's inflation or deflation is a direct result of market conditions and is affected by all externalities.
- Explains that positive and negative externalities influence the supply and demand of the airline industry. the rise and decline in fuel costs affect the lifespan of many airlines.
- Explains that there is no clear classification of the airline industry because it serves a broad purpose. people flying for pleasure are not being forced, so leisure travel would be considered excludable.
- Analyzes how living wage ordinances are determined by the cost of living where the airline employee is employed. in 2004, the ordinance allowed a wage increase of 33%.
- Explains how the monetary and fiscal aviation policies exercised in the airline industry were greatly impacted by the catastrophic events of september 11, 2001.
- Analyzes how the september 11th tragedy and newly applied policies had a significant impact on the airline industry.
- Explains that the airline industry is impacted by current market trends, and externalities. the elasticity of demand is determined by competition.
- Analyzes how the demand for jet fuel strains the supply system in volusia county.
- Cites enberg, d (2005, sept. 15). why do airlines go bankrupt?.
- Describes the living wages at the port of oakland at http://www.iir.berkeley.edu/livingwage/pdf/portoak.pdf.
- Describes the transportation security fees, which can be found at http://www.tsa.gov.
1780 wordsRead More - Carnival Of Carnivalexplanatory essayWhat is Carnival in Rio de Janeiro? A Research Report By Cecilia Durcan Carnival is considered the biggest carnival in the world with 2 million people on the street per day it is a world famous festival held before Lent every year (Rio 2). In 2014 Carnival will begin on February 13 - the Friday before Ash Wednesday - and end on February 17 - the Tuesday before Ash Wednesday. The Winners Parade will take place on the first Sunday of Lent after the parades are over.
In this essay, the author
- Explains that carnival in rio de janeiro is considered the biggest carnival in the world with 2 million people on the street per day.
- Explains that the roots of carnival date back to ancient greeks and romans celebrating the first traces of spring. the tradition spread until france, italy, spain, and portugal took up the tradition by throwing parties and wearing masks.
- Explains that the first carnival in rio was in 1723, when people dumping water on any bypasser in the streets. this practice was outlawed due to lack of restraint.
- Explains that there have been many variations of the celebration of carnival, such as grande sociedades, cordo carnavalesco, and zé pereira.
- Explains that samba started out as the idea to put basic hand-clapping and drumming to the ritual candomble dance.
- Describes the sambadrome as an exhibition place for samba schools in brazil. the top schools compete atop parade floats to "bring home the gold".
- Explains that carnival is an act of farewell to pleasures of the flesh. it ends on fat tuesday before the fasting season of lent.
- Explains that carnival street parties are how the locals celebrate carnival; there are street bands and dancers on almost every road, and each neighborhood has their favorite performers.
- Explains that carnival is a happy event where people dance, sing, party, and have fun, night and day. favelas, or slum people, are the heart and soul of carnival.
- Explains that carnival is a time of laughter and festivity as the brazilian people enjoy themselves while preparing for the fasting season of lent.
896 wordsRead More - Carnival Carnavalanalytical essayThe celebration of the Carnival first began in Italy before the first day of the Lent season and was later brought to Brazil by Catholic Portuguese settlers in the 18th century. The origin of Carnivals may not be Brazilian, yet even today Brazil most embodies the Carnival celebrations and spirit. There are many small festivals held throughout the year, but few claim to compare to the annual “Carnaval” in Rio de Janeiro. The celebration is only a small part of the year, but its influence on the community remains for the whole year. Carnaval is considered a time when socio-economic status disappears and communities come together. However, Carnaval also strongly impacts Brazil by providing space for individuality and celebrating individual characteristics. Indeed, Carnaval has become an opportunity for small revolts and protests by the people usually against the government. Brazilians who aren’t satisfied with social standards or laws will speak up and use Carnaval as their platform for protest. The celebration creates an atmosphere of trust and community in which people feel comfortable voicing their opinions. It has been used for feminist movements, gay right movements, as well as others. Not only is it beneficial to marginalized groups who find the opportunity to voice their frustration, Carnaval is used as an opportunity to forget and move past the brutality of life. Whether it’s death or unemployment, Carnaval activities focus on the positive aspects of life and don’t tend to dwell on the past. Brazil has become one of the happiest emerging nations because of the Carnaval. Although Carnaval appears to consist of mainly outrageous parties, it represents much more than that. Carnaval provides a public forum to ce...
In this essay, the author
- Explains that carnaval is a public forum to celebrate individuality in the form of social movements and in some cases, allow individuals to escape the burdens of everyday life.
- Explains that the carnaval is a celebration of brazilian music and culture. it's regarded as the most important holiday of all those celebrated worldwide.
- Describes the carnaval as an all-encompassing libertarian festivity where women can act equal and raise awareness to the expectations of women.
- Explains that brazilians use the carnaval as an opportunity to gain acceptance for their individuality. the celebration mixes the unequal, thus making minorities accepted.
- Explains that the carnaval helps brazilians move on from death and other unfortunate events that may be causing them pain.
- Analyzes how the carnaval has made brazil one of the happiest emerging nations in the world. it is organized by rio's poorest citizens and volunteers from slums.
- Explains that the carnaval "turns the world upside down, creating happiness, abundance, freedom, and above all equality of everyone within society."
1790 wordsRead More - Tripadvisor Financial Analysisanalytical essayThe financial analysis shows that the overall position of TripAdvisor on the market is stable because the performance of TripAdvisor shows a steady increase in revenues over the past three years; however, all the profitability ratios have declined over this period and specifically the return on assets and return on equity are at very low levels. This indicates that the company is not able to use the assets or the funds of the equity holders effectively.
In this essay, the author
- Explains that the long-term solvency ratio is determined using the debt to total assets. a lower ratio is desirable to depict that tripadvisor is not overleveraging itself to finance growth.
- Explains that tripadvisor's debt-to-asset ratio has been falling and is in a comfortable zone of 0.34. the risks associated with the performance are less.
- Analyzes how tripadvisor's stock has declined in the last two years due to its insufficiently developed mobile platform. people are more attracted to apps to search information and book trips.
- Explains that tripadvisor's overall position on the market is stable, but its profitability ratios have declined over the past three years, indicating that the company is not able to use the assets or funds of the equity holders effectively.
447 wordsRead More - Mardi Gras Carnivalsexplanatory essayMARDI GRAS!!!!! Yes, New Orleans' famous Carnival season is this years' never-ending party and you're invited. Mardi Gras, famous for its colorful and cultural parades, is an experience you can't go any longer w/out! The Streets are packed with both tourists and Native Louisianans as they celebrate Mardi Gras in full color and sound. . The Huge Parades come flashing down the street we fresh music, an explosion of lights, and spectacular floats. Everyone is having a great time, enjoying the festivities of the parade. So you're new to Mardi Gras, but don't want to act like it? Here in brief, are the basic facts about Americas' greatest party.
In this essay, the author
- Explains that new orleans' famous carnival season is this years' never-ending party and you're invited. the streets are packed with tourists and native louisianans as they celebrate mardi gras in full color and sound.
- Explains that mardi gras began in rome in the middle ages w/ the welcoming of spring. in 1872, the appearance of rex brought about the presentation of carnivals' colors, flag and anthem.
- Explains that parades are organized mainly of large colorful floats pulled by tractors or mack trucks, with statues and decorations, telling the story of each theme.
- Opines that new orleans was a perfect place for amusement, vacation, and partying since hurricane katrina devastated the country with its monstrous winds.
- Describes their stay at the alexa quarters in new orleans. the hotel offered sleep amenities like night mask, earplugs, cucumbers and fruit, and an optional sleep cd.
- Narrates how they fell in love with jazz music when they visited the house of blues, which was packed with all races and cultures.
909 wordsRead More - Maestrsk Line Case Analysisopinionated essayRecently, the most important factors that will affect liner companies would be the rising oil price and soft demand in Asia. First, the oil price is continuously rising because OPEC started to cut 1.2 million barrels of oil every day since 2016 and agreed to extend production cuts through 2018 (Ghouri, 2018). OPEC is trying to cut production in order to boost up the oil prices through making the market become
In this essay, the author
- Explains that maersk line is the world's largest container shipping company and operates over 600 vessels and 2 million containers.
- Describes teekay as a company that provides crude oil and gas transportation. the company's headquarters is located in trondheim, norway.
- Explains that the rising oil price and soft demand in asia will affect liner companies.
- Opines that maersk should reduce the number of the fleet in china's shipping route in a bid to reduce costs.
- Explains that the tanker market is weak starting from 2017 and it is predicted the weak situation will continue through 2018. the us is planning to apply oil sanctions on venezuela.
- Recommends that teekay sell their ships to others for the soft demand of tankers, rent out some of their vessels by signing a time charter for around 10 years, and demolish some old vessels to cut down the supply.
1129 wordsRead More