New Carnival CEO: ‘I’m listening’

By Tom Stieghorst

Carnival Corp.’s new CEO, Arnold Donald, is hoping to convince travel agents that he appreciates their efforts.

“We think a lot about travel agents,” Donald said in an interview with Travel Weekly from his St. Louis home. “They are very important to our success. One of three cruisers cruises with one of our lines. That certainly would not have been possible without the deep support of travel agents across this country.”

Donald said the first two weeks on the job since starting July 3 have been about an opportunity he’ll only get once.

“I’ve been listening,” he said.

His listening tour includes one-on-one sessions with Carnival Corp. board members, with the brand presidents and with department heads at Carnival headquarters. He also met with the board in New York the week of July 15.

Donald said he will be doing deep research into the company’s individual brands in the near future, followed by annual financial forecasting and budgeting exercises beginning in October.
ArnoldDonald
A relative unknown in cruise circles, Donald’s elevation to CEO comes after 12 years on the company’s board, where he took an active interest in the workings of Carnival Corp. brands.

Donald, who had never held a management job at a cruise line prior to becoming CEO, said he was surprised to be offered the job.

“It wasn’t on my radar screen and wasn’t something I was thinking about at all,” he said.

When Carnival Corp. Chairman Micky Arison came to him with the idea, Donald said he had to think about it. At the time, he was serving on several boards and was involved in some private equity ventures.

“I was busy, but I wasn’t a hands-on operator,” Donald said. “I had a lot of freedom.”

Still, jobs like CEO of Carnival Corp. don’t come along every day. A company with $29 billion in market value and close to 90,000 employees, Carnival has had only two CEOs in its 41-year history, and both shared the Arison name.

Donald decided there were two questions he had to answer before committing to take the position. The first was whether he really wanted to do it. The second was whether he felt he was suited to it — whether, in effect, he was the right man for the job.

Only when he concluded he could answer yes to both questions, Donald said, did he accept the offer.

Donald, 59, was born in New Orleans, the son of a carpenter. He turned down several top schools, including the U.S. Military Academy, to attend Carleton College in Minnesota, where he graduated with a degree in economics.

While short on cruise management experience, Donald had a 20-year career at Monsanto Corp., where he ran several divisions. Then he presided over a spin-off of Monsanto’s artificial sweetener business. It was while in that job that he joined Carnival’s board in 2001, shortly before the company’s acquisition of P&O Princess Cruises.

Donald said his board tenure has given him a basic feel for the industry.

“I have developed a working-level understanding of the industry, not an operational level,” he said.

But Donald said he has one bit of experience that gives him something in common with 10 million other people each year: “I have been a guest.”

Donald said his wife is an avid cruiser, and he had cruised on several ships even before joining the Carnival board.

One particularly memorable voyage was a Caribbean cruise about 15 years ago with more than 50 members of his extended family. Donald said the cruise deeply impressed them.

“None of them had ever been out of their home city before,” he recalled, adding that family members are still talking about it; he said the next family reunion is in the planning stages.

“That was a fantastic bonding experience,” he said.

When it comes to filling the gaps in his cruise expertise, Donald said he has two of the best mentors possible.

“Micky has built one of the great brands in the leisure business,” Donald said. “He is totally available to me. Micky is there, and he is chairman. [Carnival Corp. COO] Howard Frank has been around the industry for 25 years. So I have a very strong team.”
 

Donald said his salary as CEO has not yet been finalized. One complicating factor is that Donald is chairman of the compensation committee of Carnival’s board. Arison’s 2013 salary as chairman and CEO is $906,400, with a bonus of $1.5 million plus stock awards and other noncash items.

It isn’t clear yet how Arison’s compensation will be affected by the division of his roles as chairman and CEO.

Now that he’s in the new job, Donald is sizing up opportunities for Carnival. He initially mentioned raising returns on capital, expanding globally and consistently delivering a joyful vacation at a great value.

“We have opportunities all over the place,” Donald said. They range from something as simple as creating more demand to exploiting new concepts such as the transformation of the Carnival Destiny into the Carnival Sunshine.

With travel agents, Donald acknowledged that the brands “have some work to do” to rebuild credibility.

He said if there’s one key, it is to continually exceed guest expectations. Donald said he’s eager to make that happen. “I’m very excited,” he said.

Follow Tom Stieghorst on Twitter @tstravelweekly.
 

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