Name: How Carnival Cruise Line's CEO Changed the Company's Image
Uploaded: 2020-01-06
Duration: 4 min 13 s
Description: After a series of nightmare occurrences.

 Arnold, when people hear the name Carnival Cruises, they think back to a lot of highly publicized negative incidents that involved some passenger deaths, maybe a fire, or some unsanitary conditions. And then you came in. And you changed things up. What do you think was the most important thing that you did to change Carnival's reputation and its image? We spent a lot of time with the media exposing them to crews, making certain that they understood all the information we had, and were being transparent. We relied on the industry association as well. And we just built a relationship with the media so things were put in proper perspective. And then we worked on what we always worked on, which is exceeding guest expectations. And as we do that, then the guests carry the day for us. I mean, since you've come in as CEO, it's almost three years now, you've pulled off a remarkable turnaround whether you look at earnings, or revenues, or cash levels, everything is up. Carnival stock is up more than 50% since you came in. Again, I mean, what was the most critical thing you did to get those kind of results? The most critical thing was simply to unleash the latent potential of the people that were there. The second thing I did was I tapped into our guests and our stakeholders. So listen, listen, listen. Listen first to the guests. They'll tell you what they want. Listen to the employees. They'll tell you how to deliver the guests what they want. And then listen to your leadership. They'll tell you what's going to have them be motivated to deliver. And you're going to be listening to your shareholders this week. You have a meeting here in New York. What are you going to be telling them about the state of Carnival right now? Our message is going to be we have a very strong performance. We grew 40%, '15 over '14. 25%, in '14 over '13. And our guidance is to grow another 20% this year, the midpoint of our guidance. So that we're having a very strong performance, and it's on the basis of our people. Growing 20% this year in earnings, and that's amazing, what's driving that growth? Where is it coming from? The growth is coming from a combination of yield improvement so ticket pricing, on-board spending, and cost containment, managing our costs well. And it's coming from various markets around the world because we're in 700 ports around the world. And let's talk about ticket prices. I'm amazed that you are raising ticket prices. You would think in this environment a lot of the travelers are holding back from taking a cruise because of worries about geopolitical terror and the Zika virus. You're raising prices. Yeah, every year there's something. So this year is Zika. Last year was MERS. A year before, it was Ebola. Every year there's something. Every year there's terrorist activity or some disruption in geopolitical issues and macroeconomic malaise. That happens every year. Our job is to deliver anyway. And so in effect, we're able to raise prices because we are already such a great vacation value relative to land-based vacations. So we have lots of room to raise and still be a better value. You have ships that travel all around the world. How are you reassuring people that it's safe and that you've got a handle on these geopolitical risks? People want to travel. They want to experience new things. Yes, these situations occur, and they may have a disruption in one part of world or another. But the reality is that, in the end, people really want to experience the world. And that's what we do. We help them experience the world and each other. Why is it that your business is growing double digits at a time when so many other American companies are struggling in this slow-growth economy? I think for part of it for the cruise industry is we are so under penetrated. If you add up all the cabins in the world, they add up to less than 2% of the hotel rooms in the world. And basically, we are already such a great value relative to the equivalent land-based vacation that we have room to move and it's still a good deal. How does the US economy look to you right now? Well, the US economy is choppy but, overall, solid compared to other economies around the world. We actually don't see a tight correlation between the economy and our results. We do in consumer confidence in our results see more of a correlation. But in terms of correlation between economies-- because, again, we're under penetrated. We're a great value. So even in times of recession in different places around the world, including the US, we can still grow. 

How Carnival Cruise Line's CEO Changed the Company's Image

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Arnold. When people hear the name Carnival Cruises, they think back to a lot of highly publicized negative incidents. Setting involved some passenger deaths, maybe a fire, some unsanitary conditions. And then you came in and you change things up. What do you think was the most important thing that you did to change carnivals? Reputation in this image? We spent a lot of time with the media exposing them to cruise, making certain that they understood all the information we had. And we're being transparent, relied on the industry association as well. And we just built a relationship with the media. So things were put in proper perspective. And then we worked on what we always work. No, this is exceeding guests expectations. And as we do that, then the guest carried the day for us. Since you've come in a CEO almost three years now, you pulled pulled off a remarkable turnaround. Whether you look at earnings or revenues or cash levels, everything is up. Ah, Carnival stock is up more than 50% since you came in again. I mean, what was the most critical thing you did to get those kind of results? The most critical thing was simply tow unleashed the latent potential, the people that were there. The second thing I did was that happened. There are guests in our stakeholders, so listen, listen, listen. Listen. First to the guests, they'll tell you what they want this intended employees. They'll tell you how to deliver the guests, what they want and listen to your leadership. They'll tell you what's gonna have them be motivated to deliver. And you're going to be listening to your shareholders this week. You have AA meeting here in New York. What are you gonna be telling them about the State of carnival right now? That's gonna be We have a very strong performance. We grew 40% 15 over 14 25% 14 over 13. And our guidance is a girl, another 20% on the issue of the midpoint of our guidance so that we're having a very strong performance, and it's on the basis of our people growing 20% this year in earnings. And that's amazing. What's driving that growth? Where's it coming from? The growth is coming from a combination of yield improvement, eso ticket pricing, onboard spending and cost containment, managing our costs well, it is coming from various markets around the world because we're in 700 ports around the world. And let's talk about ticket prices. I'm amazed that you are raising ticket prices. Would think like in this environment. Ah, lot of the travelers are holding back from taking a cruise because of worries about geo political terror. And you know, the Zika virus, You're raising prices. Yeah, every year there's something. So this here is Eka. Last year was murdered a year before with Ebola. Every year there's something every year there's no terrorist activity or some disruption and geopolitical issues and macroeconomic believe that happens every year, our job to deliver anyway. And so in effect, were able to raise prices because we are ready such a great vacation value relative to lambaste vacation. So we have lots of room to raise and still be a better value. You have ships travel all around the world. How are you reassuring people that it's safe and the true? You've got a handle on the geopolitical risk? People want to travel, they want to experience new things. Yes, situations occur and they may have a disruption in one part of world or another. But the reality is that in the in the end, people really want to experience the world, and that's what we do. We help them experience the world in each other. Why is it that your business is growing double digits at a time when so many other American companies are struggling in the slow growth economy? I think part of it for the cruise industry is so under penetrated. You know, if you add up all the cabins in the world, they add up to less than 2% of the hotel rooms in the world. And basically we are already such a great value relative, the equipment, land based vacation that we have room to move and still a good deal. How does the U. S economy look to you right now? Well, the U. S economy is choppy but overall solid compared to all the economies around the world. Well, we actually don't see a tight correlation between the economy and our results. We do and consumer confidence in our results in more of a correlation. But in terms of correlation Tooni comedies, because again we're under penetrated. We're a great value. So even in times of recession, in different places around the world, including the US, we can still grow