Carnival has won its bid for Princess,
leaving Royal Caribbean to nurse its wounds with a break-up fee of
more than $60 million. Even that amount may not be enough to
console the Royal Caribbean management, which initiated the
campaign to bring Princess into its fold.
The Carnival-Princess deal involves what is called a dual-listed
company -- or DLC -- in which each company will continue to offer
public shares separately even though they have combined
operationally.
Subject to final approval, the deal will take effect in the next
few months and Princess will come into the Carnival fold, which
also includes Holland America, Cunard, Costa and other well-known
cruise brands.
Travel agents who have followed the protracted battle to win
Princess were hopeful that neither of the two bidders would
succeed. Most agents aren't fond of the consolidation of suppliers
that has taken place in recent years.
But our surveys in recent weeks also indicated that agents
generally have been satisfied with the way in which Carnival has
permitted the lines it has acquired to maintain their independence.
There's no reason to assume the parent company will treat Princess
any differently.
When this consolidation is completed, the two major Alaska
cruise lines will have common ownership. But history suggests that
they will be permitted to compete as they have in the past.
How much more consolidation is likely to occur in the cruise
industry? Will Royal Caribbean, which also owns Celebrity Cruises,
seek other partners in the wake of its failure to acquire Princess?
Will the Star group, which includes Norwegian Cruise Line, get
together with Royal Caribbean?
It wouldn't surprise me to see further marriages, reducing the
ownership of the cruise industry to even fewer groups.
At the end of the day, that will only be bad news for the retail
trade if the owning companies change their distribution
policies.
As things stand, agents remain the cornerstone of cruise
distribution. Let's hope that further consolidations don't change
that picture.