he big get bigger through aggressive
growth strategies and big mergers, while niche players and new
entrants fade away. Overcapacity puts a downward pressure on
prices, rampant discounting ensues, and the distribution system
feels the pinch in the form of lower commissions.
You might think you just read an introduction to the airline
business, but it also could be a status report on the cruise
industry. It's getting hard to tell them apart these days.
The combination of Royal Caribbean and P&O Princess is going to
create a cruise industry behemoth rivaling Carnival Corp. in size
and exceeding it in global scope. We're going to have a Big Two,
just like the U.S. airline industry. Can this be good?
Although the airlines have given mergers and takeovers a bad
name, the cruise industry has seen several transactions in recent
years that produced more positive results than the typical airline
Cunard, for example, faced an uncertain future because of some
earlier deals but became stronger and more focused after its
acquisition by Carnival Corp. And the Royal Caribbean-Celebrity
merger seems to have produced synergies that made the merged
company more profitable than the sum of its parts.
For many agents, however, bigness brings sameness and a loss of
diversity and opportunity as more and more brands are consolidated
under big corporate umbrellas. For all their faults, some recently
departed cruise lines were at least trying to do something
There may be nothing to do but resign ourselves to the reality
that cruising in North America has become a very big part of a very
global business and will soon be dominated by two corporate titans,
a distant No. 3 in NCL and an array of decidedly smaller luxury,
niche and adventure cruise lines.
And if history is any guide, it won't end there.