As P&O Princess Cruises Plc moves toward a $5.6 billion
marriage with Carnival Corp., travel agents expressed mixed
emotions about what would become the world’s largest cruise
company.
Several said they believe that a Carnival-P&O combination
would strengthen Princess Cruises and enhance relationships with
travel agents. Still, some also harbored concerns that the mammoth
company, with an estimated 43% of the cruise market, could decrease
agent commissions.
“If there is going to be an acquisition of Princess, I’d prefer
Carnival,” said Ruth Turpin, owner of Cruises Etc., in Fort Worth,
Texas.
Karen O’Donoghue of The Cruise Director Inc. in San Carlos,
Calif., said, “If Carnival takes over Princess, it will be very
well taken care of.”
On Oct. 24 P&O Princess announced it welcomed a proposal by
Carnival Corp. to create a dual-listed company in which each
company would maintain current listings on the London Stock
Exchange and the New York Stock Exchange, respectively.
The P&O Princess board withdrew its recommendation of a
merger with Royal Caribbean Cruises Ltd. and paid a $62.5 million
breakup fee. If shareholders approve the Carnival deal, it is
expected to close in the first quarter of 2003.
In an Oct. 29 letter to shareholders, P&O Chairman Lord
Sterling of Plaistow said the next development is expected to take
place in early 2003. He did not set a date for a shareholders
meeting.
Meanwhile, agents wondered how the Carnival-P&O deal would
impact Princess, a popular premium line based in Los Angeles.
“I’m not the slightest bit concerned,” said Pam Alexander,
president of The Cruise Director Inc., in San Carlos, Calif. “It
will only be a positive. Carnival has been brilliant at keeping
their acquisitions independent.”
Carnival Corp. also owns Carnival Cruise Lines, Holland America
Line, Costa Cruises, Cunard, Seabourn Cruises and Windstar
Cruises.
“I think that many of my clients are worried that the quality of
Princess will decline,” said Lisbeth Oden of Northern Star
Productions in Aspen, Colo.
Turpin noted that Carnival keeps its brands independent and
invests in them, unlike RCCL.
“Royal Caribbean absorbed Celebrity, which doesn’t have its own
identity anymore,” Turpin said. “Royal Caribbean took Celebrity and
made it Royal Caribbean.”
Bill Knight, president of All Cruise Travel in San Jose, Calif.,
said, “If Carnival handles Princess like all its other
acquisitions, it will be a positive move for Princess.”
Carnival Chairman Micky Arison has said his corporation does not
operate as a monolith and that individual lines even compete
against each other.
“We operate by brand; the power of the company is in the power
of the individual brands,” Arison told The Wall Street Journal.
“There’s nothing to fear and nothing to be concerned about.”
