Carnival (CCL) Cruise Lines and rival Royal Caribbean (RCL) have both struggled, for very obvious reasons. Neither company could have predicted that a pandemic would fully close their operations from U.S. ports from March 2020 through July 2021.
That's an unprecedented event in modern global history, but the numbers suggest that Royal Caribbean has managed the crisis a lot better than its rival.
Over the past five years, Carnival (as of premarket on Feb. 17) has lost almost 58% of its value while Royal Caribbean has seen its share price dip by 8.6%.
A drop had to be expected given that both companies had to take on billions of dollars in debt under very unfavorable terms during the pandemic. The difference is that Royal Caribbean has posted a stronger recovery and looks to be better positioned going forward.
Carnival has some marketing plans that may change that. And it's about to celebrate a big event that could reengage some of its core audience.
TheStreet
What Has Royal Caribbean Done Right?
Royal Caribbean and Carnival both serve families and younger crowds than cruise lines traditionally cater to. Cruise Critic, a website that covers the industry, breaks it down as follows:
- Carnival: Budget-conscious, family-friendly cruise line with a casual, 'we-don't-take-ourselves-too-seriously' vibe that's all about having fun
- Royal Caribbean: Focus on the "wow" factor with big ships, high-tech entertainment, and activities, a vast array of dining choices, and an emphasis on family togetherness.
Royal Caribbean has focused on upgrading the experience on its cruise ships, introducing the brand-new Odyssey of the Seas during the pandemic while adding the newest, biggest ship in the world, Wonder of the Seas. The company has also invested heavily in its Coco Cay private island, making it a fixture of its marketing campaign.
Coco Cay has been a true competitive advantage for Royal Caribbean. Traditional cruise-line private islands (like Carnival's are essentially just beaches. Royal's Caribbean destination has an extra-fee water park, and a massive pool. That makes its short cruises that stop at Coco Cay more appealing than Carnival's comparable itineraries.
Royal Caribbean's ships have given the company an edge as well. Its Oasis class ships have features that Carnival simply has not matched, including the Central Park area (essentially a park on a cruise ship) and the Seaplex on Quantum Class ships including Odyssey (which host everything from basketball to pickleball and bumper cars).
In addition, Carnival has trailed Royal Caribbean when it comes to specialty restaurants aside from on its newest ship, Mardi Gras. That gives Royal an added draw for adults as they may be more willing to board ships catering to kids and families if they know they can have a series of high-end dinners (sometimes at very good prices on cruises where unlimited "Ultimate Dining" is sold).
What Is Carnival Doing to Compete?
Carnival has a new marketing campaign that's built around the idea that its ships are a lot of fun.
"We expect to build on this momentum with the brand's announcement just last week on its Funderstruck campaign, engineered to highlight the joy and following of our Carnival Cruise," Chief Executive Arnold Donald said during his company's fourth-quarter earnings call. "That advertising campaign is launching over the holiday, including the activations on Christmas Day and Times Square on New Year's Eve."
Carnival also has two more ships in its top-tier Excel class currently being built. These will join Mardi Gras in giving the cruise line an answer to Royal Caribbean's Oasis, Quantum, and the upcoming Icon class ships.
"This fall, more excitement arrives when Carnival Celebration arrives home to PortMiami. Carnival’s next Excel-class ship will share all the fun guests are enjoying on Mardi Gras, like Bolt [an on-board roller-coaster], plus some exclusive features as well," Carnival said in a news release.
"A third Excel-class ship, Carnival Jubilee, will begin operations from its homeport in Galveston in the fall of 2023 and will also feature unique aspects all her own."
In addition to new ships, Carnival has also released plans to celebrate the company's 50th birthday with what it's calling Sailibrations. The cruise line has special events planned from now through March 2022.
Before stepping on board, guests will be welcomed into Carnival’s cruise terminals-turned-birthday parties with fun music, signage and décor. Upon embarkation, the celebration begins as each ship will host a 50th Birthday Bash Sailaway Party where guests are invited to wear their favorite Carnival gear, vintage or modern, as Playlist Productions cast members join the ships’ Cruise Director, Fun Squad and DJs to rock to festive tunes.
Other unique entertainment that will debut on the Sailabrations will include Carnival-themed puzzles; 1972 fun-fact trivia with commemorative 50th Birthday medallions; a Build-A-Bear Birthday Party featuring the debut of a special-edition cuddly bear; and a Rollin’ In Riches casino event. The sailings will also include the debut of new, exclusive collections of specially-designed and collectable retail offerings.
The company also plans "17 themed Sailabrations," which "will allow guests to not only celebrate with each other on board but also with other Carnival ships. Ships throughout the Carnival fleet will meet to host the biggest birthday parties at sea."
At-sea meetups, essentially ships anchored in sight of each other, enable the company to do things like set off fireworks.
Royal Caribbean did something similar to celebrate its return to sailing on the 4th of July in 2020. Its initial passenger-carrying ships, Freedom of the Seas and Adventure of the Seas, along with ships getting ready to take on passengers, all anchored near Coco Cay for a fireworks celebration.
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