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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®ion=usa&cur=USD&productcode=MLE

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