| From The Wall Street Journal, Thursday, August 18,1988
CARNIVAL TO BUY CRUISE BUSINESS OF GOTAAS-LARSON
by Charles McCoy, Staff Reporter of The Wall Street Journal
MIAMI - Carnival Cruise Lines said it agreed to pay $260 million
for the cruise ship business of Gotaas-Larsen Shipping Corp.,
London.
Carnival says it currently carries more passengers than any
other line in the booming cruise ship industry. It has the
third-largest number of berths, according to industry estimates.
Gotaas-Larsen owns interests that represent roughly one-third
of what is soon to become the industry's second-largest entity,
in terms of berths. Analysts said acquiring that stake could
place Carnival in position to dominate the cruise business for
years to come.
The move underscores the wave of consolidations and mergers
in the cruise line industry in recent months. In July, for
example, P&O Line acquired Sitmar Cruises, giving P&O 11,202
berths, more than any other operator. The trend reflects cruise
companies' belief that size is the best defense against heavy
competition and escalating advertising expenditures, analysts
said.
"We'll see more of these deals," said Stanley Buchin, a
cruise industry consultant based in Lexington, Mass. "in two or
three years, the business will be dominated by a few very large
players."
Gotaas-Larsen owns 33.3% of Royal Caribbean Cruise Lines and
51% of Admiral Cruise Lines. In March, those companies agreed to
merge in a deal that would create a cruise operator with about
9,034 berths, more than Carnivals 8,448 berths. By buying
Gotaas-Larsen's stake, Carnival could wind up with 36.2% of the
combined entity.
In American Stock Exchange composite trading yesterday,
Carnival's shares closed at $12.75, up $1.125.
Mickey Arison, Carnival's president, said the acquisition
would give it the single largest stake in the Royal
Caribbean-Admiral combination. The other shareholders are two
Norwegian shipping families and three private companies, none of
which were identified. Mr. Arison said Carnival views the stake
as "a long-term investment," but he wasn't specific about how
Carnival hopes to influence the combined entity.
Some analysts speculated that Carnival's eventual aim is to
take over the entire Royal Caribbean-Admiral combination. Mr.
Arison wouldn't comment on that, but said, "If any of the other
parties are interested in selling, we're interested in buying."
The cruise companies' push for more size has been fueled by
both growing demand and growing costs. Mr. Buchin said industry
revenues have been increasing at about 8% to 10% annually in
recent years, and are expected to total about $7 billion this
year. However, advertising expenses exploded to about $200
million in 1987 and could reach about %400 million a year by
1992, he said.
"The cruise industry is coming out of its adolescence," said
Ron Zeller, a Miami-based consultant. "It is realizing that size
and scale means profit."
Much of the growth comes from those who have discovered that
cruises aren't only for retirees. "The two-income, no-kids class
of yuppie has discovered that floating away toward an island is a
unique and highly satisfactory kind of vacation," said John
Leeper, a transportation consultant in Alexandria, Va.
|
| From The Wall Street Journal, Friday, January 31,1989
Help Wanted: Men To Dance on Board
by Jonathan Dahl
THE CRUISE industry has found a way to make cruising more attractive for some
women: male escorts.
More cruise lines are placing senior men on board to serve as "hosts" by
dancing and socializing with unescorted ladies. Cruises often have far more
widows than widowers and "this gives those ladies someone to dance with," says
a spokesman for Royal Viking Line in Coral Gables, Fla.
Cruise lines say the hosts wear name tags and are required to socialize with
all single women; they are not permitted to pair off or become romantically
involved with anyone. "The ladies are to be treated equally," says a
spokeswoman for Royal Cruise Line in San Francisco. "And believe me, they
notice if there is any favoritism."
For their efforts, the hosts get to go on the cruise free and are given a $100
to $200 bar credit-to pay for drinks they buy for ladies. But it's not easy to
get the job. Hundreds apply each year, and recommendations from travel agents
are required.
"The guys look like something out of central casting," says Gene Malott, editor
of the Mature Traveler newsletter. "They're all very suave, with gray-not
silver-hair and James Bond grins on their faces."
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