Carnival Corporation operates as a leisure travel and cruise company. It offers cruises under the Carnival Cruise Line, Princess Cruises, Holland America Line, and Seabourn brands in North America; and Costa, AIDA, P&O Cruises (UK), Cunard, and P&O Cruises (Australia) brands in Europe, Australia, and Asia. The company operates approximately 100 cruise ships. It also owns Holland America Princess Alaska Tours, a tour company in Alaska and the Canadian Yukon, which owns and operates hotels, lodges, glass-domed railcars, and motor coaches. In addition, the company is involved in the leasing of cruise ships. It sells its cruises primarily through travel agents and tour operators. The company was incorporated in 1972 and is headquartered in Miami, Florida. Carnival Corporation is a subsidiary of Carnival Corporation & Plc.
Business Analysis of Carnival
The Travel & Leisure Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Carnival compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Carnival to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Carnival with an interactive chart.
- Revenue Growth: Carnival reported a revenue growth of 4.3% year-on-year during 2016. Recreational Services Industry grew at 6.2% in the same period
- COGS share of Revenues: As a percentage of revenue, Carnival spent 57.3% of its total revenues on COGS. Recreational Services industry average (COGS share of revenue) in the same period was 63.5%
- R&D share of Revenues: Carnival R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Carnival spent 13.4% of its total revenues on Sales, Marketing, and General Administration (SG&A). Recreational Services industry average SG&A spending in the same period was 13.9%
- Inventory share of Revenues: As a percentage of revenue, Carnival spent 2.0% of its total revenues on Inventories. Recreational Services industry average Inventory spending in the same period was 1.2%
- Accounts Payable share of Revenues: As a percentage of revenue, Carnival invested 4.4% of its total revenues on Accounts Payable (A/P) Recreational Services industry average Accounts Payable investment in the same period was 5.7%
- Accounts Receivable share of Revenues: As a percentage of revenue, Carnival invested 1.8% of its total revenues on Accounts Receivable (A/R). Recreational Services industry average Accounts Receivable investment in the same period was 3.9%
- PP&E share of Revenues: As a percentage of revenue, Carnival invested 197.9% of its total revenues on Property, Plants, and Equipments (PP&E). Recreational Services industry average PPE investment in the same period was 137.7%
- Intangibles share of Revenues: As a percentage of revenue, Carnival invested 25.5% of its total revenues on Intangibles. Recreational Services industry average Intangibles investment in the same period was 35.4%
- Net Margins: Carnival Net Margins in the year 2016 were 17.0%. Recreational Services industry average Net Margins in the same period were 9.7%
Sector and Industry Association of Carnival
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Carnival is associated with Travel & Leisure Sector and Recreational Services Industry.
Travel & Leisure sector is comprised of the following industries: Airline; Car Rental Services; Casino; Hotels and Resorts; Recreational Services. The definitions for each of the industries is as follows:
- Airline industry includes companies primarily engaged in providing passenger air transport.
- Car Rental Services industry includes companies engaged in providing car rental services.
- Casino industry includes providers of gambling and casino facilities.
- Hotels and Resorts industry includes operators of hotels, motels, lodges, resorts, spas and campgrounds.
- Recreational Services industry includes providers of leisure facilities and services, such as amusement and theme parks, fitness centers, cruise lines, movie theaters, racetracks, and sports teams.
Industry Ranking of Carnival
With $16.4 billion revenues, Carnival ranked number 1 of all the companies in the US Recreational Services industry. There were a total of 24 public companies in the US Recreational Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Recreational Services industry by revenues during 2016 were:
- Carnival ($16.4 billion)
- Royal Caribbean Cruises ($8.5 billion)
- Live Nation Entertainment ($8.4 billion)
- Norwegian Cruise Line Holdings ($4.9 billion)
- AMC Entertainment Holdings ($3.2 billion)
- Regal Entertainment Group ($3.2 billion)
- Cinemark Holdings ($2.9 billion)
- SeaWorld Entertainment ($1.3 billion)
- Six Flags Entertainment ($1.3 billion)
- Churchill Downs ($1.3 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.