Carnival Cruises 2014 Annual Report Download - page 5

We are unwaveringly focused on increasing demand on all fronts. That includes a significant public relations
effort across all brands to deliver our message to consumers that cruising is a great experience, at a great value.
In fact, we enjoyed a significant increase in our collective share of voice globally in 2014 with our number of
positive mentions more than doubling.
We have increased our investment in advertising, having spent over $600 million in 2014. We launched new
marketing campaigns in multiple regions. In North America, Carnival Cruise Line was the National Cruise Line
advertiser of the Winter Olympics telecast while Princess Cruises launched its first television campaign in 10
years. In addition, both Costa Cruises in Europe and P&O Cruises in the UK launched new advertising
campaigns.
As we began 2015, we aired a new commercial on Super Bowl Sunday – the world’s biggest marketing stage.
Our company’s first major multi-brand marketing initiative extended well beyond the Super Bowl itself
garnering nearly 5 billion media impressions even before the game aired and more than 10 billion total
impressions to date.
These efforts collectively help to drive demand for our brands that outpaces capacity, ultimately leading to higher
yields.
New Market Opportunities
Asia, and in particular, China continues to be a focus for emerging market development, where we expect
double-digit growth over the next few years. We expect China to be the largest cruise market in the world over
time. We were the first to enter the market through our Costa Cruises brand in 2006 and are currently the largest
cruise operator in mainland China. This year we will lead the industry with four ships which will homeport out of
Mainland China and more than 12 marketing offices in the region. To coordinate our growth strategy, our Chief
Operations Officer, Alan Buckelew, has relocated to China and we have entered into several strategic agreements
focused on expanding the cruise industry in China.
We signed a memorandum of understanding (“MOU”) with China State Shipbuilding Corporation, China’s
largest shipyard, and Italian shipbuilder, Fincantieri, to explore the possibility of shipbuilding and other strategic
partnerships to foster growth. We also signed a MOU with China Merchants Group, China’s oldest state
enterprise, to explore joint ventures in port and destination development, as well as other areas to successfully
develop our industry.
We have clearly established a solid foothold as the largest cruise operator home-porting in China, and our
development strategy is accelerating.
Working Together to Unlock Our Potential
I feel strongly that our brands must remain independent, especially concerning the guest interface, yet work
together to unlock the potential of leveraging our scale and collective expertise. We began 2014 with the first-
ever global leadership team meeting that brought together our top 65 leaders from around the world and achieved
remarkable alignment on our vision and top priorities. By strengthening our communication and coordination, we
enjoyed some early wins on our revenue and cost cross-brand collaboration efforts.
We furthered our never-ending pursuit of capturing insights from our guests beginning with our segmentation
study in North America, the first we have done across brands and the largest ever done in our industry. We
conducted extensive interviews with over 40,000 respondents and mined our 30 million past-guest database for
insight to help grow demand and onboard revenue.
We elevated our level of cross-brand global deployment planning to drive greater penetration and more effective
capacity management. Additionally, we conducted our first deep dive examination of our revenue management
systems to share best practices and identify gaps, new opportunities and tools.
Some early wins on our cost containment efforts already contributed $20 million of savings in 2014. We
anticipate another $70 to $80 million in cost reductions to benefit 2015 and have further opportunity to help
offset inflation in the broader base of non-fuel purchases over time.
3