Table of Contents
Table of Contents

How Carnival Cruise Line Makes Money

Most revenue is generated from global cruise operations

If you've ever taken or considered taking a cruise, there's a good chance that you've heard of Carnival. The large corporation operates as a dual-listed company: Carnival Corporation (CCL), which is listed on the New York Stock Exchange (NYSE) and Carnival PLC shares trade on the London Stock Exchange (LSE) and as an American depositary share (ADS).

Carnival was founded in 1972 as Carnival Cruise Line by Ted Arison. Its maiden ship was called the Mardi Gras, which was converted ocean liner. The company changed its name to Carnival Corporation in 1994 and has acquired a number of other cruise line operators, including P&O Cruises (which operates Princess Cruises), Holland America Line, and Costa. Carnival runs 87 ships, including 24 under the Carnival name, all of which serve millions of guests each year.

But just how does the company make money? Read on to learn more about the company, its competition within the industry, and its financials.

Key Takeaways

  • Carnival operates a portfolio of cruise-line brands offering both year-round and seasonal cruises throughout the world.
  • The company was founded as Carnival Cruise Line in 1972 but changed its name to Carnival Corporation in 1994.
  • Carnival acquired a series of rivals, including P&O Cruises, Holland America, and Costa.
  • The company's North America and Australia cruise segment is its largest source of revenue.
  • Like many other travel and tourism-related companies, Carnival was affected by the COVID-19 pandemic but showed signs of growth in 2022.

Carnival's Business and Competition

Carnival Corporation & PLC operates cruise ships that carry millions of passengers each year. As noted above, its fleet comprises 87 different ships across nine brand names.

Carnival Cruise Line is the company's leading brand, offering year-round cruises in The Bahamas, the Caribbean, and Mexico, along with seasonal cruises in Bermuda, the U.S., Canada, Europe, and Australia. Its eight other brands are Princess, Holland America Line, Seabourn, Cunard, AIDA, Costa, P&O Cruises Australia, and P&O Cruises U.K.

Carnival faces direct competition within the cruise line industry from a number of key rivals, including:

  • Royal Caribbean Group (RCL)
  • Norwegian Cruise Line Holdings (NCLH)
  • Lindblad Expeditions Holdings (LIND)

But as part of the broader travel and tourism industry, the company also faces competition from hotel operators, resort companies, casinos, and theme parks. Carnival's indirect competitors include Walt Disney (DIS), Las Vegas Sands (LVS), Marriott International (MAR), and Hilton Worldwide Holdings (HLT).

$23.8 billion

The estimated worth of the global cruise line industry in 2021.

Carnival's Financials

Carnival announced its financial results for the 2022 fiscal year (FY) in December 2022. According to the company's release, the company announced:

  • Total annual revenue of $12.17 billion compared to $1.9 billion for 2021
  • An annual net loss of $4.38 billion compared to a net loss of $7.09 billion in 2021

The company attributed its growth to increased passenger bookings and the relaxation of COVID-19 protocols. This is a significant improvement for the company as Carnival, along with others in the travel and tourism industry, experienced a major setback during the pandemic.

Carnival paused its cruise operations in mid-March 2020. In January 2022, it announced that eight of its nine brands resumed cruise line operations. Although uncertainty remains, the company said its fleet was fully operational by the summer season in 2022.

Carnival's Business Segments

Carnival operates four separate business segments:

  • North America and Australia Cruise Operations
  • Europe and Asia Cruise Operations
  • Cruise Support
  • Tour and Other

The company provides a breakdown of revenue and operating income for each of these segments in its annual reports. The company's annual report is released between February and March each year, with the most recent being the one for fiscal 2021 as of the time of this writing.

Because all four segments posted an operating loss in FY 2021, a separate pie chart for operating income was excluded from the diagram above.

North America and Australia Cruise Operations

The NAA cruise operations segment is comprised of five of Carnival's nine cruise brands. Those brands along with their total passenger capacity and the total number of ships as of Nov. 30, 2021, were:

  • Carnival Cruise Line: 74,710 passengers and 25 ships
  • Princess Cruises: 42,610 passengers and 14 ships
  • Holland America Line: 22,920 passengers and 11 ships
  • P&O Cruises (Australia): 7,230 passengers and three ships
  • Seabourn: 2,570 passengers and five ships

The NAA segment reported an operating loss of $3.9 billion in FY 2021 compared to an operating loss of $5.8 billion in the previous year. Revenue for the year fell 69.5% to $1.1 billion, accounting for about 58% of companywide revenue.

Europe and Asia Cruise Operations

This segment is comprised of Carnival's other four cruise brands. Their total passenger capacity and the total number of ships as of Nov. 30, 2021, were:

  • Costa Cruises: 36,520 passengers and 11 ships
  • AIDA Cruises: 30,770 passengers and 13 ships
  • P&O Cruises (U.K.): 19,020 passengers and six ships
  • Cunard: 6,830 passengers and three ships

The EA segment reported an operating loss of $2.6 billion in FY 2021 compared to an operating loss of $2.7 billion in FY 2020. Annual revenue sank 60.2% to $712 million, comprising more than 37% of Carnival's total revenue.

Cruise Support

The cruise support segment is comprised of Carnival's portfolio of port destinations and other services, which operate in support of the company's cruise brands.

This segment reported an operating loss of $477 million in FY 2021 compared to an operating loss of $313 million in the previous year. Annual revenue fell 38.2% to $42 million, accounting for about 2% of total revenue.

Tour and Other

Tour and Other consists of Carnival's tour company, Holland America Princess Alaska Tours, which operates in Alaska and the Canadian northwest territory of Yukon. The company owns and operates hotels, lodges, glass-domed railcars, and buses. It complements the company's Alaska cruise operations.

This segment reported an operating loss of $67 million in FY 2021 compared to an operating loss of $29 million in FY 2020. Annual revenue sank 58.2% year-over-year (YOY) to $46 million, accounting for more than 2% of companywide revenue for the year.

Article Sources
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  1. Carnival Corporation & PLC. "Investor Relations."

  2. Carnival Corporation & PLC. "Vision, Mission & History."

  3. Carnival Corporation & PLC. "Quick Facts."

  4. Carnival Corporation & PLC. "Our Brands."

  5. Cruise Market Watch. "2021 Worldwide Cruise Line Market Share."

  6. Carnival Corporation & PLC. "CARNIVAL CORPORATION & PLC PROVIDES FOURTH QUARTER 2022 BUSINESS UPDATE."

  7. Carnival Corporation & PLC. "Form 10-K for the fiscal year ended November 30, 2021," Page F-7.

  8. Carnival Corporation & PLC. "Form 10-K for the fiscal year ended November 30, 2021," Pages F-30 & F-31.

  9. Carnival Corporation & PLC. "Form 10-K for the fiscal year ended November 30, 2021," Page 7.

  10. Carnival Corporation & PLC. "Form 10-K for the fiscal year ended November 30, 2021," Page F-31.

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