There is a lot of talk about airline consolidation these days, what with United and Continental in talks for an alliance, and Delta’s takeover of Northwest, and rumors about just about every other domestic airline.
But the real consolidation has been in the cruise industry, and it might be about to get much worse.
As reported in the ARTA (Association of Retail Travel Agents) newsletter, there is a rumor that Carnival is trying to take over Royal Caribbean International, parent company of Royal Caribbean Cruise Line and Celebrity Cruise Lines.
While Carnival, Royal Caribbean and Celebrity sounds like a pretty large cruise company by itself, the truth is much bigger than that.
Carnival Cruise Line is already the parent company of Princess, Seabourn, Costa Cruises, Holland America and Cunard. Which means that adding Royal Caribbean and Celebrity would give them over 80 percent of the North American cruise market.
If the merger happened, only NCL would remain outside the Carnival umbrella, along with smaller super deluxe lines like Regent Seven Seas and Silversea.
And while Carnival could, and probably would, claim that their increased purchasing power would result in potential savings for clients, the reality is likely to be far less advantageous.
The brands are currently marketed separately, but there would be very little reason for Carnival to drastically undercut prices with similar products. And for that matter, to offer better onboard prices on one line versus another for wine and bar drinks, shore excursions and spa treatments.
In addition, presumably there would also be less reason for a Carnival monopoly to offer any incentives to travel agents. Not simply in terms of commission, but in terms of onboard credits and extras that cruise lines often give to preferred agents.
At this point, the potential takeover is simply a rumor, and it is also possible the Department of Justice might say “enough” and disallow a takeover. But if it happens, a Carnival-RCI mega merger will make the airline industry look competitive.
