Micky Arison Carnival Corp chairman interviewd by Jeremy Vine at ABTA 2009

This was a very interesting interview at the Barcelona Convention Centre during the 2009 Travel Convention. Jeremy Vine interviewed Carnival chariman Micky Arison. Here is the transcript of that interview courtesy of TTG.

Carnival Corporation chairman Micky Arison ruled out his company building ships as large as rival Royal Caribbean International.

Speaking at the Travel Convention, Arison said the world’s leading cruise line preferred to operate ships that offered flexibility in terms of ports they could visit.

Royal Caribbean will launch the 5,400-passenger Oasis of the Seas in November, a ship that is 40% bigger than those in its fleet that currently hold the title of the world’s largest liners.

Asked by conference moderator Jeremy Vine if he ever gets ship envy, Arison said “no”.

“The largest ship we have ever built was the Queen Mary 2 [for Cunard], and that will probably be the largest ship we ever build,” he said.

Arison said he had no intention of building anything larger for the Carinval Cruises brand than its newest ship the Dream or anything larger for UK market leader P&O Cruises than the 3,000 passenger Ventura.

“We are happy in that size range,” he added. “We can deliver the type of consumer service and value we want, that’s not to say there is anything wrong with larger.

“There are people who want to spend their vacation on Mall of Americas and there are people who want to spend their vacation on a cruise ship.

We try to build ships that have the flexibility to visit ports such as Venice. When you get to a certain size you start to limit the flexibility of the ship.”

Arison admitted he was worried about the state of the global economy last year when dire assessments in the US gave consumers the impression the “world was about to end”.

But he said the trading environment had dramatically improved since then and Carnival was now able to access banking facilities that were closed down to it at the start of the credit crunch.

He said although volumes remained strong, pricing was still down but he was optimistic prices would soon return to pre-recession levels.

Although Carnival reported $1 billion profits in the third quarter, he said that had to be looked at in the context of the returns on invested capital and yields which had gone down dramatically.

“If you take that into account we have a long way to go in terms of where we want to be,” he said.

Carnival’s response to the downturn was to suspend its shareholder dividend and to cut prices to make cruising “irresistable”, Arison said.

Asked about the impact of discounting and price cutting, Arison said although it might mean reduced revenues for the line and agents, it did have the positive effect of bringing new people into cruise.

Carinval has eight million customers worldwide annually, three million of which are new to cruise.

He dismissed the suggested that price cutting was the cause of the unrest on a P&O Cruises’ christmas cruise on Ventura last year that led to reports of it being a “chav cruise”.

“That happened on a Christmas cruise which means it was one of our higher priced cruises,” he said. “When you carry eight million guests a year you expect anything. 

“Cruise ships are a miocrcosm of any city or any location and stuff happens. The negatives of discounting might be less commission for agents and less revenue for us but the positive is it opens up the product to a wider audience."

Arison said this desire to broaden the reach of cruising was one of the biggest single reasons for the success of Carnival which was set up by his father Ted in 1972 with just one second-hand ship.

This is a cruise blog entry by Phil