WEBVTT 00:00:00.000 --> 00:00:02.600 Welcome back to the Deep Dive. You know how this 00:00:02.600 --> 00:00:05.580 works. You give us the sources, the dense filings, 00:00:05.580 --> 00:00:08.179 the industry reports, all of it, and we break 00:00:08.179 --> 00:00:12.419 it all down for you. And today, we are attempting 00:00:12.419 --> 00:00:16.059 to map something truly complex. I'd say so. We're 00:00:16.059 --> 00:00:18.199 looking at what is probably the most successful 00:00:18.199 --> 00:00:20.699 and maybe most complicated corporate structure 00:00:20.699 --> 00:00:23.399 in all of leisure travel, Carnival Corporation 00:00:23.399 --> 00:00:25.699 and Bullets. And we have to be clear from the 00:00:25.699 --> 00:00:27.859 start, we're not just talking about a big cruise 00:00:27.859 --> 00:00:31.039 line. Not at all. No. The sources you sent over 00:00:31.039 --> 00:00:34.659 map out this Anglo -American corporate leviathan. 00:00:34.799 --> 00:00:37.320 It's a behemoth that controls, through its nine 00:00:37.320 --> 00:00:40.100 main brands, something like 40 % of the world's 00:00:40.100 --> 00:00:42.420 entire cruise fleet. That number of 40%, it's 00:00:42.420 --> 00:00:43.939 just staggering. I think for most people, when 00:00:43.939 --> 00:00:45.740 you say carnival, they picture the fun ships, 00:00:45.920 --> 00:00:47.799 you know? Right, the bright colors, the water 00:00:47.799 --> 00:00:50.140 slides. Exactly. But the reality we're diving 00:00:50.140 --> 00:00:53.960 into today is a multinational holding company 00:00:53.960 --> 00:00:57.509 that has spent 50 years just... aggressively 00:00:57.509 --> 00:01:00.250 acquiring and consolidating centuries of maritime 00:01:00.250 --> 00:01:03.399 history. And that's our mission here. We need 00:01:03.399 --> 00:01:05.579 to cut right through that complexity. We're going 00:01:05.579 --> 00:01:08.500 to distill how this company, which is both one 00:01:08.500 --> 00:01:11.400 and two entities at the same time, actually operates. 00:01:11.700 --> 00:01:14.219 We'll look at what incredible historic brands 00:01:14.219 --> 00:01:18.359 it owns and maybe more importantly, the really 00:01:18.359 --> 00:01:20.620 high stakes challenges it's faced. Oh, absolutely. 00:01:20.739 --> 00:01:23.120 Everything from, you know, repeated environmental 00:01:23.120 --> 00:01:25.579 violations that led to record breaking fines 00:01:25.579 --> 00:01:28.689 all the way to the. well, the existential threat 00:01:28.689 --> 00:01:30.950 of the pandemic. The complexity starts right 00:01:30.950 --> 00:01:33.189 away, though, just with its basic legal setup. 00:01:33.349 --> 00:01:36.150 It's not just unusual. It's one of the most unique 00:01:36.150 --> 00:01:38.469 corporate structures out there. A dual listed 00:01:38.469 --> 00:01:41.090 entity. It operates as one business, but it's 00:01:41.090 --> 00:01:43.920 legally split. Split across two continents and 00:01:43.920 --> 00:01:46.180 two different stock exchanges. It's fascinating 00:01:46.180 --> 00:01:48.379 because it's so deliberate. You have Carnival 00:01:48.379 --> 00:01:51.019 Corporation on the U .S. side. Legally, it's 00:01:51.019 --> 00:01:52.760 incorporated in Panama. Which we'll definitely 00:01:52.760 --> 00:01:55.040 get back to. Oh, yeah. Its operational headquarters 00:01:55.040 --> 00:01:57.599 are in Florida. It trades on the New York Stock 00:01:57.599 --> 00:02:00.799 Exchange ticker is CCL. And it's part of the 00:02:00.799 --> 00:02:03.739 S &P 500. And then running right alongside it, 00:02:03.799 --> 00:02:06.200 sharing everything, you have Carnival Pluck. 00:02:06.650 --> 00:02:08.990 The British side. That's the UK -based entity 00:02:08.990 --> 00:02:11.469 listed on the London Stock Exchange, also trading 00:02:11.469 --> 00:02:14.810 as CCL, and it's in the FTSE 250 index. So they 00:02:14.810 --> 00:02:16.930 have two separate legal identities, but they 00:02:16.930 --> 00:02:19.789 act as one single economic engine. And this wasn't 00:02:19.789 --> 00:02:21.509 just for convenience. You said it was deliberate. 00:02:21.990 --> 00:02:24.550 I'd say it was born out of pure necessity. And 00:02:24.550 --> 00:02:27.250 that necessity is backed by, I mean, just staggering 00:02:27.250 --> 00:02:30.449 scale. The 2024 financials and the source material 00:02:30.449 --> 00:02:32.449 really drive this home. Let's hit the numbers. 00:02:32.939 --> 00:02:35.719 Okay, so the entity reported revenue of U .S. 00:02:35.719 --> 00:02:41.060 $25 .02 billion. $25 billion. And its total assets 00:02:41.060 --> 00:02:44.460 are knocking on the door of $50 billion. U .S. 00:02:44.460 --> 00:02:48.039 $49 .06 billion, to be exact. And to run all 00:02:48.039 --> 00:02:50.340 of that, they employ around 100 ,000 people across 00:02:50.340 --> 00:02:52.500 the globe. You're not looking at a travel company 00:02:52.500 --> 00:02:54.759 anymore. That's a multinational conglomerate 00:02:54.759 --> 00:02:57.180 with the economic clout of a small country. Absolutely. 00:02:57.460 --> 00:02:59.699 So let's start by unpacking that corporate plumbing. 00:02:59.819 --> 00:03:01.780 Because if you don't understand the dual -listed 00:03:01.780 --> 00:03:04.199 structure, you can't really appreciate how it's 00:03:04.199 --> 00:03:06.479 managed to dominate the globe. It's the key to 00:03:06.479 --> 00:03:08.319 everything. Okay, so when we look at the geography, 00:03:08.580 --> 00:03:11.560 it gets complicated fast. You've got the operational 00:03:11.560 --> 00:03:14.879 heart, the nerve center of Carnival Corporation 00:03:14.879 --> 00:03:16.900 in Doral, Florida. Right, that's where all the 00:03:16.900 --> 00:03:18.780 North American cruise operations are really run 00:03:18.780 --> 00:03:20.719 from. But then you have the headquarters for 00:03:20.719 --> 00:03:22.699 Carnival Planet over in Southampton, England, 00:03:22.800 --> 00:03:25.259 managing all the European brands. But the detail 00:03:25.259 --> 00:03:27.620 that most people miss, and it's so critical, 00:03:27.780 --> 00:03:31.099 is the legal home. The main Carnival Corporation 00:03:31.099 --> 00:03:34.599 entity is legally domiciled in Panama. And that 00:03:34.599 --> 00:03:37.280 is not an accident. No, it's a huge strategic 00:03:37.280 --> 00:03:39.879 advantage. Operating under a Panamanian flag 00:03:39.879 --> 00:03:43.360 of convenience using their corporate law. It 00:03:43.360 --> 00:03:45.400 provides massive benefits. We're talking about 00:03:45.400 --> 00:03:48.599 taxes, labor rules. Compliance with certain maritime 00:03:48.599 --> 00:03:50.860 regulations. It's just a more flexible environment. 00:03:51.080 --> 00:03:53.000 Right. So you have this triangle. Panama for 00:03:53.000 --> 00:03:55.139 legal, Florida for operations, Southampton for 00:03:55.139 --> 00:03:57.659 Europe. It's the definition of strategic optimization. 00:03:58.020 --> 00:03:59.860 And this whole thing, this Carnival Corporation 00:03:59.860 --> 00:04:03.259 and Flunick, it was formally born in 2003. And 00:04:03.259 --> 00:04:05.400 it wasn't a friendly merger. It was the result 00:04:05.400 --> 00:04:09.020 of a really hard -fought takeover of P &O, Princess 00:04:09.020 --> 00:04:12.219 Cruises, Plank. And that battle is exactly why 00:04:12.219 --> 00:04:16.500 the dual -listed company, or DLC structure, exists. 00:04:17.019 --> 00:04:19.620 It was the solution. What would have happened 00:04:19.620 --> 00:04:23.480 otherwise? If they just, you know, absorbed the 00:04:23.480 --> 00:04:25.560 UK company. It would have been a disaster for 00:04:25.560 --> 00:04:27.180 the deal. I mean, you would have created massive 00:04:27.180 --> 00:04:30.180 tax problems for the UK shareholders. It would 00:04:30.180 --> 00:04:32.399 have killed the UK trading status and it probably 00:04:32.399 --> 00:04:34.579 would have run into huge regulatory hurdles in 00:04:34.579 --> 00:04:37.339 London. So the DLC was the compromise. It was 00:04:37.339 --> 00:04:39.259 the compromise that got the deal done. It let 00:04:39.259 --> 00:04:41.399 the takeover succeed. And this compromise means 00:04:41.399 --> 00:04:44.759 that operationally they are one company. Shared 00:04:44.759 --> 00:04:46.879 management, shared marketing, shared profits. 00:04:47.000 --> 00:04:49.769 But legally. They stay separate. The documents 00:04:49.769 --> 00:04:52.250 show that Carnival Corps and Carnival Plaquing 00:04:52.250 --> 00:04:55.290 jointly own all the operating companies, you 00:04:55.290 --> 00:04:56.850 know, the cruise lines themselves. How do they 00:04:56.850 --> 00:04:58.810 hold that together? Through a really complex 00:04:58.810 --> 00:05:01.329 web of agreements. The most important part is 00:05:01.329 --> 00:05:03.470 something called cross guarantees. OK, what's 00:05:03.470 --> 00:05:05.990 that? That's the glue. It basically means if 00:05:05.990 --> 00:05:09.110 one side to the U .K. entity gets into financial 00:05:09.110 --> 00:05:11.750 trouble, the U .S. entity is legally required 00:05:11.750 --> 00:05:14.670 to back it up and vice versa. Ah, so it creates 00:05:14.670 --> 00:05:17.529 a unified front financially. A unified front, 00:05:17.610 --> 00:05:20.250 exactly, while still allowing them to tap into 00:05:20.250 --> 00:05:22.930 two completely separate pools of investment capital. 00:05:23.199 --> 00:05:26.459 They get money from the NYSE and the LSE without 00:05:26.459 --> 00:05:28.600 forcing shareholders to switch jurisdictions. 00:05:28.939 --> 00:05:31.240 And for a business that needs billions to build 00:05:31.240 --> 00:05:33.860 a single new ship, that access to capital is 00:05:33.860 --> 00:05:36.139 everything. It's vital. So to really feel the 00:05:36.139 --> 00:05:37.899 weight of this company, let's go back to those 00:05:37.899 --> 00:05:40.480 2024 financials. It's more than just the big 00:05:40.480 --> 00:05:43.779 revenue number. Right. The U .S. $25 .02 billion 00:05:43.779 --> 00:05:47.519 in revenue is enormous, of course. It puts them 00:05:47.519 --> 00:05:49.759 in the absolute top tier of the global travel 00:05:49.759 --> 00:05:52.689 sector. And it's profitable. Very. operating 00:05:52.689 --> 00:05:56.870 income was U .S. $3 .574 billion. That shows 00:05:56.870 --> 00:05:59.649 you the core business pricing tickets, managing 00:05:59.649 --> 00:06:02.149 costs across that huge portfolio is incredibly 00:06:02.149 --> 00:06:04.290 strong. And that's all built on that massive 00:06:04.290 --> 00:06:07.250 asset base, just under $50 billion. Right, $49 00:06:07.250 --> 00:06:09.470 .06 billion. And you have to remember what's 00:06:09.470 --> 00:06:11.889 in that number. It's the 93 ships, sure, but 00:06:11.889 --> 00:06:13.629 it's also the port infrastructure, the private 00:06:13.629 --> 00:06:15.790 islands. The value of the brands themselves. 00:06:16.649 --> 00:06:19.220 Kinard's name alone is worth a fortune. Which 00:06:19.220 --> 00:06:20.779 does bring up an interesting point about their 00:06:20.779 --> 00:06:23.360 balance sheet post -pandemic. While the assets 00:06:23.360 --> 00:06:27.199 are huge, the total equity reported was U .S. 00:06:27.199 --> 00:06:31.319 $9 .251 billion. Not a small number, but compared 00:06:31.319 --> 00:06:34.339 to $50 billion in assets. It reflects the sheer 00:06:34.339 --> 00:06:36.620 amount of debt they had to take on to survive 00:06:36.620 --> 00:06:38.860 the shutdown. So while they made it through, 00:06:39.079 --> 00:06:42.560 a huge focus for leadership right now is managing 00:06:42.560 --> 00:06:44.600 those debt payments and building that equity 00:06:44.600 --> 00:06:46.819 position back up. And that leadership still has 00:06:46.819 --> 00:06:49.439 a family connection, right? It does. The CEO 00:06:49.439 --> 00:06:52.360 is Josh Weinstein, but the chairman is Mickey 00:06:52.360 --> 00:06:54.879 Arison, who's the son of the founder, Ted Arison. 00:06:55.879 --> 00:06:58.720 That family link really maintains a very specific 00:06:58.720 --> 00:07:01.480 long term focus, even with all this corporate 00:07:01.480 --> 00:07:03.899 complexity. And you can see that long term focus 00:07:03.899 --> 00:07:06.420 in their real estate plans. Even with this globe 00:07:06.420 --> 00:07:08.819 spanning legal structure, they're actually consolidating 00:07:08.819 --> 00:07:10.399 physically. Yeah, that was a big announcement. 00:07:10.420 --> 00:07:12.100 They're moving all their North America team members 00:07:12.100 --> 00:07:14.620 into one single new headquarters in Miami -Dade 00:07:14.620 --> 00:07:16.740 County, the Waterford Business District. And 00:07:16.740 --> 00:07:18.300 that's not happening tomorrow. It's scheduled 00:07:18.300 --> 00:07:21.220 to open in 2028. Exactly. It shows they're planning 00:07:21.220 --> 00:07:23.800 for the long haul, trying to streamline the internal 00:07:23.800 --> 00:07:26.540 organization and make it more efficient, even 00:07:26.540 --> 00:07:28.060 while they keep all the benefits of the Panama 00:07:28.060 --> 00:07:30.699 domicile in the dual listing. So it's operational 00:07:30.699 --> 00:07:33.639 cohesion on top of financial and legal complexity. 00:07:33.939 --> 00:07:36.779 It's a perfect way to put it. The structure is 00:07:36.779 --> 00:07:39.779 a high -level corporate shield. Panama gives 00:07:39.779 --> 00:07:42.899 them regulatory flexibility. The DLC gives them 00:07:42.899 --> 00:07:45.420 maximum access to capital. And the new Florida 00:07:45.420 --> 00:07:48.850 HQ will give them management efficiency. And 00:07:48.850 --> 00:07:52.129 that agility is exactly what let them build this 00:07:52.129 --> 00:07:54.810 empire in the first place. So how did this company, 00:07:54.910 --> 00:07:57.449 which is so perfectly engineered for global finance, 00:07:57.689 --> 00:08:00.470 actually start? It certainly wasn't with 50 billion 00:08:00.470 --> 00:08:02.810 in assets. No, it was a much, much humbler beginning. 00:08:03.069 --> 00:08:04.990 Let's shift from the balance sheet to the boardroom 00:08:04.990 --> 00:08:07.709 battles. The history of Carnival is, I mean, 00:08:07.709 --> 00:08:10.209 it's a classic entrepreneurial story with this 00:08:10.209 --> 00:08:13.290 incredible moment of high stakes risk. The sources 00:08:13.290 --> 00:08:16.920 trace it all back to 1972. I was founded as Carnival 00:08:16.920 --> 00:08:19.579 Cruise Line by Ted Arison and a partner, Mishulam 00:08:19.579 --> 00:08:21.819 Rickless. They started with just one ship, an 00:08:21.819 --> 00:08:24.100 old one at that. And it did not go well at first. 00:08:24.399 --> 00:08:28.480 Not at all. It was a disaster. By 1974, just 00:08:28.480 --> 00:08:31.019 two years in, the company was drowning in debt. 00:08:31.240 --> 00:08:34.120 And this led to that legendary moment. The $1 00:08:34.120 --> 00:08:37.279 deal. The $1 deal. Rickless was so desperate 00:08:37.279 --> 00:08:40.129 to get out. that he sold his entire share of 00:08:40.129 --> 00:08:42.830 the company to Ted Arison for a single dollar. 00:08:42.929 --> 00:08:44.789 I mean, can you imagine? Arison was essentially 00:08:44.789 --> 00:08:47.029 betting a buck that he could take on all that 00:08:47.029 --> 00:08:49.570 debt and turn this sinking ship around. It's 00:08:49.570 --> 00:08:52.029 an incredible amount of guts. And that $1 investment, 00:08:52.230 --> 00:08:54.370 of course, became the foundation for this entire 00:08:54.370 --> 00:08:58.470 $50 billion empire. And his big idea was to pivot. 00:08:58.769 --> 00:09:01.789 He went after the mainstream mass market customer 00:09:01.789 --> 00:09:04.970 with the fun ship concept. It completely revolutionized 00:09:04.970 --> 00:09:06.850 the industry. They proved they could scale it. 00:09:07.100 --> 00:09:09.379 built their first new ship, the Tropical, in 00:09:09.379 --> 00:09:12.120 the early 80s. But the real game changer wasn't 00:09:12.120 --> 00:09:15.240 a ship. It was a financial move. The IPO, 1987. 00:09:15.500 --> 00:09:18.259 The 1987 IPO in the New York Stock Exchange. 00:09:18.340 --> 00:09:20.519 That was the rocket fuel. They only sold 20 % 00:09:20.519 --> 00:09:22.899 of the company. That's 20%. And it raised around 00:09:22.899 --> 00:09:26.379 $400 million. And that money wasn't for new carpets 00:09:26.379 --> 00:09:29.019 on the ships. It was explicitly a war chest for 00:09:29.019 --> 00:09:31.419 acquisitions. That's the moment. That's when 00:09:31.419 --> 00:09:34.039 Carnival stops being just a cruise line and starts 00:09:34.039 --> 00:09:36.399 becoming a holding company that owns cruise lines. 00:09:36.620 --> 00:09:39.539 And they formalized it in 1993 by officially 00:09:39.539 --> 00:09:43.360 changing the name to Carnival Corporation. The 00:09:43.360 --> 00:09:45.919 acquisition spree that followed was all about 00:09:45.919 --> 00:09:48.279 dominating the market through segmentation. It 00:09:48.279 --> 00:09:52.059 happened so fast. In 1989, they bought Holland 00:09:52.059 --> 00:09:55.620 America Line. Yep, securing that premium, destination 00:09:55.620 --> 00:09:57.960 -focused part of the market. And with it, they 00:09:57.960 --> 00:10:00.059 got the Alaskan land tour business, which showed 00:10:00.059 --> 00:10:01.679 they were already thinking about vertical integration. 00:10:02.080 --> 00:10:05.120 Then they went for the high end, Windstar, Seabourn. 00:10:05.220 --> 00:10:07.059 And then crucially, they expanded in Europe. 00:10:07.279 --> 00:10:09.539 They bought Costa Cruises, which was the leader 00:10:09.539 --> 00:10:12.620 in Italy, and the legendary Cunard line. So with 00:10:12.620 --> 00:10:14.559 that, they controlled everything from the budget 00:10:14.559 --> 00:10:18.220 -friendly fun ships all the way up to ultra luxury. 00:10:18.500 --> 00:10:21.200 They were insulated from shifts in any one part 00:10:21.200 --> 00:10:23.100 of the market. And all of that set the stage 00:10:23.100 --> 00:10:25.519 for the big one, the corporate battle royale. 00:10:25.929 --> 00:10:28.350 for P &O Princess Cruises. Which is what led 00:10:28.350 --> 00:10:30.470 directly to the dualist structure we've been 00:10:30.470 --> 00:10:34.149 talking about. That period from 2000 to 2003 00:10:34.149 --> 00:10:38.110 is just essential. P &O Princess Cruises was 00:10:38.110 --> 00:10:40.830 a huge player in its own right. It had been spun 00:10:40.830 --> 00:10:43.169 off from the original P &O group. And the original 00:10:43.169 --> 00:10:46.970 P &O dates back to 1837. They literally ran the 00:10:46.970 --> 00:10:49.850 world's first commercial cruise ships. So Carnival 00:10:49.850 --> 00:10:52.289 wasn't just buying a competitor. They were trying 00:10:52.289 --> 00:10:55.590 to absorb the deepest, oldest lineage in the 00:10:55.590 --> 00:10:57.809 entire industry. And Pino Princess had already 00:10:57.809 --> 00:11:00.490 agreed to merge with someone else. With Carnival's 00:11:00.490 --> 00:11:03.110 number one rival, Royal Caribbean. So that's 00:11:03.110 --> 00:11:05.250 what made it a hostile takeover. Exactly. Carnival 00:11:05.250 --> 00:11:07.710 just jumped in with a counteroffer, and they 00:11:07.710 --> 00:11:10.529 had a secret weapon. They offered better terms, 00:11:10.629 --> 00:11:13.970 specifically the promise of this new DLC structure. 00:11:14.269 --> 00:11:16.190 And that was the key for the British shareholders. 00:11:16.629 --> 00:11:18.730 It was everything. The British market had this 00:11:18.730 --> 00:11:21.919 deep sentimental attachment to P &O. The DLC 00:11:21.919 --> 00:11:23.779 structure was a way for them to get the financial 00:11:23.779 --> 00:11:26.299 benefit of the merger while keeping a separate 00:11:26.299 --> 00:11:28.659 London stock listing and protecting the independence 00:11:28.659 --> 00:11:31.480 of the classic UK brands like P &O Cruises. That 00:11:31.480 --> 00:11:34.059 was a masterstroke. Instead of a simple American 00:11:34.059 --> 00:11:36.860 buyout, they proposed this complex but brilliant 00:11:36.860 --> 00:11:39.039 structure. It neutralized all the regulatory 00:11:39.039 --> 00:11:42.659 fears. It won over the shareholders. And in 2003, 00:11:42.899 --> 00:11:46.379 they acquired P &O Princess. The unique structure 00:11:46.379 --> 00:11:49.860 we see today is the direct result of that successful 00:11:49.860 --> 00:11:52.289 hostile takeover. And it instantly made them 00:11:52.289 --> 00:11:54.269 the dominant player in the world. Doubled their 00:11:54.269 --> 00:11:56.389 fleet size overnight. And they didn't just stop 00:11:56.389 --> 00:11:59.330 at buying cruise lines. In 2018, they made another 00:11:59.330 --> 00:12:01.429 interesting purchase, this time in infrastructure. 00:12:02.169 --> 00:12:04.710 The White Pass and Yukon route. They bought it 00:12:04.710 --> 00:12:08.029 for US $290 million. And this was pure vertical 00:12:08.029 --> 00:12:09.889 integration, right? Totally. This wasn't about 00:12:09.889 --> 00:12:12.309 adding ships. It was about owning the port. of 00:12:12.309 --> 00:12:15.049 Skagway, Alaska, owning the critical tourist 00:12:15.049 --> 00:12:17.990 railroad, owning the retail shops. By owning 00:12:17.990 --> 00:12:20.450 the destination, they control the quality, the 00:12:20.450 --> 00:12:23.570 logistics. And they capture 100 % of the money 00:12:23.570 --> 00:12:25.830 their passengers spend there. It's brilliant. 00:12:26.169 --> 00:12:28.210 But the sources also show that building an empire 00:12:28.210 --> 00:12:30.009 means you sometimes have to prune it. They've 00:12:30.009 --> 00:12:32.409 sold off brands, too. Oh, for sure. They sold 00:12:32.409 --> 00:12:35.590 Windstar Cruises back in 2007. And more recently, 00:12:35.629 --> 00:12:38.850 just in 2023, they sold their share in a joint 00:12:38.850 --> 00:12:41.620 venture in China, Adora Cruises. So it's not 00:12:41.620 --> 00:12:43.659 just about getting bigger. It's about constantly 00:12:43.659 --> 00:12:46.299 managing the portfolio. It shows their dynamic. 00:12:46.440 --> 00:12:48.460 They're willing to cut assets that don't fit 00:12:48.460 --> 00:12:51.600 their long term global strategy. And the result 00:12:51.600 --> 00:12:54.320 of all this buying and selling is the incredible 00:12:54.320 --> 00:12:56.399 collection of brands they have today. Kate main 00:12:56.399 --> 00:12:59.320 consumer brands all operating under this one 00:12:59.320 --> 00:13:02.539 entity, but each filling a very specific niche 00:13:02.539 --> 00:13:05.519 in the market. It's a masterclass in segmentation. 00:13:05.799 --> 00:13:10.059 They've got 93 ships as of late 2024, and they 00:13:10.059 --> 00:13:12.460 have a ship for basically every demographic, 00:13:12.740 --> 00:13:15.379 every price point, and every nationality you 00:13:15.379 --> 00:13:17.220 can think of. And to manage all that, they did 00:13:17.220 --> 00:13:21.080 a big internal shakeup in June 2023. Yeah, they 00:13:21.080 --> 00:13:23.159 restructured. They created six new operational 00:13:23.159 --> 00:13:26.320 units, and each unit has full executive control 00:13:26.320 --> 00:13:28.559 over the brands in its portfolio. It's about 00:13:28.559 --> 00:13:31.169 making them more nimble. So what are these units? 00:13:31.509 --> 00:13:33.149 Well, you've got Carnival Cruise Line as its 00:13:33.149 --> 00:13:34.710 own unit, which makes sense. It's the biggest. 00:13:34.909 --> 00:13:37.049 Then you have Carnival Maritime, which handles 00:13:37.049 --> 00:13:39.629 the big European brands, AIDA and Costa. Okay. 00:13:39.690 --> 00:13:42.090 Then there's Carnival UK, which is crucial. It 00:13:42.090 --> 00:13:44.570 manages the two British heritage lines, Cunard 00:13:44.570 --> 00:13:46.490 and Pinot Cruises, right out of Southampton. 00:13:46.629 --> 00:13:49.789 Keeping that historical link. Exactly. Then there's 00:13:49.789 --> 00:13:52.289 Holland America Group, based in Seattle, which 00:13:52.289 --> 00:13:55.490 runs Holland America, and the ultra -luxury Seabourn. 00:13:56.210 --> 00:13:59.429 And finally, Princess Cruises gets its own unit. 00:13:59.850 --> 00:14:02.690 Based in California. So that structure guarantees 00:14:02.690 --> 00:14:04.970 that the experience is completely different depending 00:14:04.970 --> 00:14:07.730 on the brand. A passenger on Cunard expects a 00:14:07.730 --> 00:14:10.490 certain level of formality. That would feel totally 00:14:10.490 --> 00:14:13.690 alien to a passenger on Ada who's there for a 00:14:13.690 --> 00:14:16.970 casual German -speaking club atmosphere. Let's 00:14:16.970 --> 00:14:18.730 dig into some of these brand histories because 00:14:18.730 --> 00:14:20.629 this is where you really see the weight of what 00:14:20.629 --> 00:14:22.710 Carnival bought. These aren't just logos on a 00:14:22.710 --> 00:14:25.129 funnel. No, they are living pieces of history. 00:14:25.309 --> 00:14:27.970 Let's start with Cunard, the crown jewel. Founded 00:14:27.970 --> 00:14:30.990 in 1840, its whole reason for being was winning 00:14:30.990 --> 00:14:33.610 the first transatlantic mail contract. It was 00:14:33.610 --> 00:14:36.070 all about speed and reliability, but it was also 00:14:36.070 --> 00:14:39.049 a matter of national pride. The sources say the 00:14:39.049 --> 00:14:41.049 British government actually subsidized their 00:14:41.049 --> 00:14:44.250 ships, like the Mauritania and Lusitania, just 00:14:44.250 --> 00:14:45.909 to make sure they were faster than the German 00:14:45.909 --> 00:14:47.830 ships. And then during the Great Depression, 00:14:47.970 --> 00:14:49.649 they were forced to merge with their biggest 00:14:49.649 --> 00:14:52.830 rival. White Star Line, the company that owned 00:14:52.830 --> 00:14:55.549 the Titanic. For a while, they were Cunard White 00:14:55.549 --> 00:14:58.029 Star Line before Cunard bought out the rest in 00:14:58.029 --> 00:15:01.289 1949. And today, they still operate the Queen 00:15:01.289 --> 00:15:05.350 Mary II, which is the world's last true transatlantic 00:15:05.350 --> 00:15:07.870 ocean liner. Not a cruise ship, an ocean liner, 00:15:08.029 --> 00:15:11.070 built to handle the North Atlantic all year round. 00:15:11.169 --> 00:15:14.289 When Carnival bought Cunard in 1999, they got 00:15:14.289 --> 00:15:17.210 all of that priceless heritage in one go. Then 00:15:17.210 --> 00:15:20.110 you have a brand like Holland America Line. Founded 00:15:20.110 --> 00:15:23.610 in Rotterdam in 1871, its history is tied up 00:15:23.610 --> 00:15:25.950 with the great waves of immigration to the United 00:15:25.950 --> 00:15:28.629 States. And their story is one of smart evolution. 00:15:29.149 --> 00:15:32.090 They started as both cargo and passenger, but 00:15:32.090 --> 00:15:35.450 in 1973, they went all in on cruising. Why was 00:15:35.450 --> 00:15:37.879 that? The rise of container shipping. It made 00:15:37.879 --> 00:15:40.759 their old cargo business obsolete, so they wisely 00:15:40.759 --> 00:15:43.080 ditched it to focus only on leisure travel. And 00:15:43.080 --> 00:15:44.940 they have that famous tradition, all their ships 00:15:44.940 --> 00:15:47.240 have names ending in dam. Right, the Rotterdam, 00:15:47.299 --> 00:15:49.639 the New Amsterdam. It's a core part of their 00:15:49.639 --> 00:15:51.980 brand identity that Carnival have been very careful 00:15:51.980 --> 00:15:54.340 to maintain since they bought them in 89. And 00:15:54.340 --> 00:15:56.500 the European brands have their own unique stories. 00:15:56.919 --> 00:15:59.419 Ada is a really interesting one. Its origins 00:15:59.419 --> 00:16:02.100 are wild. It actually started as part of the 00:16:02.100 --> 00:16:04.179 state -owned shipping company of East Germany 00:16:04.179 --> 00:16:07.820 back in 1952. So Carnival... through the P &O 00:16:07.820 --> 00:16:10.600 merger, now owns a brand that started behind 00:16:10.600 --> 00:16:13.500 the Iron Curtain. And has been completely repurposed 00:16:13.500 --> 00:16:15.700 for the modern German holiday market. It's almost 00:16:15.700 --> 00:16:17.980 entirely focused on German -speaking passengers. 00:16:18.360 --> 00:16:20.620 The language on board is German. The food is 00:16:20.620 --> 00:16:23.259 German. The whole vibe is German. Which is a 00:16:23.259 --> 00:16:26.360 stark contrast to the formality of Cunard. Totally 00:16:26.360 --> 00:16:28.580 different world. And that's the genius of their 00:16:28.580 --> 00:16:31.029 segmentation. We should probably also clarify 00:16:31.029 --> 00:16:33.549 the whole P &O situation because it can get confusing. 00:16:33.789 --> 00:16:36.690 Yes, good point. So there are three P &O entities 00:16:36.690 --> 00:16:39.330 to remember. There's P &O Cruises, the brand. 00:16:39.610 --> 00:16:42.009 It has the oldest heritage in the world, dating 00:16:42.009 --> 00:16:45.009 back to 1837, and it serves the British market. 00:16:45.230 --> 00:16:47.210 Okay, so that's the cruise line itself. Right. 00:16:47.289 --> 00:16:49.629 Then there was P &O Princess Cruises Piatek. 00:16:49.809 --> 00:16:51.950 That was the big company that Carnival acquired 00:16:51.950 --> 00:16:55.090 in that 2003 hostile takeover. And the original 00:16:55.090 --> 00:16:57.750 P &O was the 19th century steamship company that 00:16:57.750 --> 00:17:00.860 started it all. Exactly. When you put this whole 00:17:00.860 --> 00:17:03.840 portfolio together, you see a company that didn't 00:17:03.840 --> 00:17:06.660 just buy ships. It bought history, it bought 00:17:06.660 --> 00:17:09.720 culture, and it bought access to very specific 00:17:09.720 --> 00:17:13.440 markets. It's an incredible portfolio, but they 00:17:13.440 --> 00:17:15.660 aren't just resting on that history. The sources 00:17:15.660 --> 00:17:18.380 show they are betting billions on the future. 00:17:18.619 --> 00:17:21.980 Big time. Which takes us to what they're building 00:17:21.980 --> 00:17:24.279 next. If that was the history they acquired, 00:17:24.579 --> 00:17:27.099 this next part is the future they're building, 00:17:27.240 --> 00:17:29.920 and it starts on land. For a company this big, 00:17:30.099 --> 00:17:32.880 controlling the destination is just as important 00:17:32.880 --> 00:17:35.220 as controlling the ship. That's where the private 00:17:35.220 --> 00:17:37.319 islands come in. Yeah. It's all about controlling 00:17:37.319 --> 00:17:39.660 the guest experience from start to finish. You 00:17:39.660 --> 00:17:41.960 eliminate all the variables of dealing with third 00:17:41.960 --> 00:17:44.400 -party ports. The logistics, the quality of vendors, 00:17:44.579 --> 00:17:47.640 security. And you capture all the revenue. The 00:17:47.640 --> 00:17:50.039 sources point to four big ones. You've got Princess 00:17:50.039 --> 00:17:52.460 Cay in the Bahamas, used by Princess and Carnival. 00:17:52.579 --> 00:17:54.680 And Half Moon Cay, also in the Bahamas. Right, 00:17:54.740 --> 00:17:56.880 originally a Holland America spot. Yeah. And 00:17:56.880 --> 00:17:58.799 they're planning to build a pier there. which 00:17:58.799 --> 00:18:01.240 is a big deal. It means bigger ships can dock 00:18:01.240 --> 00:18:03.779 directly instead of using smaller tender boats. 00:18:03.980 --> 00:18:06.200 They also have Amber Cove in the Dominican Republic, 00:18:06.400 --> 00:18:09.319 and then there's the huge new project. Celebration 00:18:09.319 --> 00:18:12.440 Key. This is their new private resort on Grand 00:18:12.440 --> 00:18:15.660 Bahama. It's a massive investment, a whole controlled 00:18:15.660 --> 00:18:18.279 ecosystem just for their passengers. These private 00:18:18.279 --> 00:18:20.900 spots are so valuable because you can build an 00:18:20.900 --> 00:18:24.059 entire itinerary around them that isn't vulnerable 00:18:24.059 --> 00:18:27.000 to, say, geopolitical problems in other ports. 00:18:27.200 --> 00:18:29.819 You create your own demand. And that confidence 00:18:29.819 --> 00:18:32.099 is reflected in their ship orders. They have 00:18:32.099 --> 00:18:34.480 seven new ships under construction or on order. 00:18:34.640 --> 00:18:37.039 Which is a huge vote of confidence in the future 00:18:37.039 --> 00:18:39.430 of the industry. The delivery schedule runs from 00:18:39.430 --> 00:18:43.450 2027 all the way up to 2033. They plan on a decade 00:18:43.450 --> 00:18:45.930 -long timeline. And the scale of these new ships 00:18:45.930 --> 00:18:48.269 is just breathtaking. For Ada, they have two 00:18:48.269 --> 00:18:51.410 on order. There are 150 ,000 gross tons carrying 00:18:51.410 --> 00:18:54.710 over 4 ,000 passengers, costing $1 .3 billion 00:18:54.710 --> 00:18:58.089 each. But the really colossal investment is for 00:18:58.089 --> 00:19:00.269 the main brand, Carnival Cruise Line. Oh, yeah. 00:19:00.559 --> 00:19:02.480 They have three of these new Project Ace class 00:19:02.480 --> 00:19:04.440 ships on order. How big are we talking? We are 00:19:04.440 --> 00:19:07.579 talking 230 ,000 gross tons, a passenger capacity 00:19:07.579 --> 00:19:10.720 of 6 ,200. These will be among the largest passenger 00:19:10.720 --> 00:19:14.480 ships ever built. And the price tag. $1 .75 billion 00:19:14.480 --> 00:19:18.240 for one ship. Wow. And they're not just bigger, 00:19:18.279 --> 00:19:20.079 they're technologically different too, right? 00:19:20.259 --> 00:19:23.099 Yes. They're designed to run on LNG, electrified 00:19:23.099 --> 00:19:25.680 natural gas. That's a huge step towards addressing 00:19:25.680 --> 00:19:27.599 all the environmental pressure the industry is 00:19:27.599 --> 00:19:29.859 under. And I noticed they're naming the new ships 00:19:29.859 --> 00:19:32.039 after some of their originals, like Carnival 00:19:32.039 --> 00:19:34.599 Festival and Carnival Tropical. It's a clever 00:19:34.599 --> 00:19:37.819 move. It connects these futuristic megaships 00:19:37.819 --> 00:19:40.779 back to the brand's origins in the 70s and 80s. 00:19:40.799 --> 00:19:42.759 This whole order book just screams confidence, 00:19:43.019 --> 00:19:45.759 but... Operating at this scale also means you're 00:19:45.759 --> 00:19:48.319 exposed to equally high stakes failures. And 00:19:48.319 --> 00:19:50.660 that's where we have to go next. You can't talk 00:19:50.660 --> 00:19:52.700 about the empire without looking at the major 00:19:52.700 --> 00:19:55.440 incidents and the deliberate misconduct. The 00:19:55.440 --> 00:19:57.299 sources are really clear on this. There is a 00:19:57.299 --> 00:19:59.079 documented pattern of intentional environmental 00:19:59.079 --> 00:20:01.180 violations. We're not talking about accidents 00:20:01.180 --> 00:20:03.740 here. We're talking about fraud. It goes back 00:20:03.740 --> 00:20:07.880 quite a ways. In 2002, Carnival Corporation pleaded 00:20:07.880 --> 00:20:10.950 guilty to criminal charges. The filings confirmed 00:20:10.950 --> 00:20:13.349 they were falsifying logbooks to cover up the 00:20:13.349 --> 00:20:15.750 dumping of oily bilge water from six of their 00:20:15.750 --> 00:20:17.970 ships. And this had been going on for years. 00:20:18.109 --> 00:20:21.589 From 1996 to 2001, the penalty was an $18 million 00:20:21.589 --> 00:20:24.029 fine. But more importantly, they were put on 00:20:24.029 --> 00:20:26.809 five years of court -supervised probation for 00:20:26.809 --> 00:20:29.490 their entire fleet worldwide. The fact that a 00:20:29.490 --> 00:20:31.630 federal court had to step in and monitor them 00:20:31.630 --> 00:20:33.930 tells you how serious the problem was? But it 00:20:33.930 --> 00:20:38.289 got worse. Much worse. In 2016, their subsidiary, 00:20:38.329 --> 00:20:41.130 Princess Cruise Lines, was hit with a $40 million 00:20:41.130 --> 00:20:43.349 fine. Which was the largest criminal penalty 00:20:43.349 --> 00:20:45.920 ever for intentional vessel pollution. And the 00:20:45.920 --> 00:20:48.599 details are damning. They were using a so -called 00:20:48.599 --> 00:20:51.660 magic pipe to bypass their own systems and dump 00:20:51.660 --> 00:20:54.500 oily waste straight into the ocean. And then 00:20:54.500 --> 00:20:56.559 they actively lied to cover it up. And this only 00:20:56.559 --> 00:20:58.220 came to light because of a whistleblower, right? 00:20:58.299 --> 00:21:01.299 Yes. A newly hired engineer saw what was happening, 00:21:01.400 --> 00:21:04.039 was disgusted by it, and reported it. The practices 00:21:04.039 --> 00:21:07.200 have been going on from 2005 all the way to 2013. 00:21:07.819 --> 00:21:10.640 This suggests a really deep systemic failure 00:21:10.640 --> 00:21:13.000 of corporate culture. It absolutely does. You 00:21:13.000 --> 00:21:15.259 have high ranking ship officers conspiring to 00:21:15.259 --> 00:21:17.619 break the law. And even after all that, even 00:21:17.619 --> 00:21:20.000 while they were on probation, it happened again. 00:21:20.220 --> 00:21:23.940 2019. In 2019, they got hit with another $20 00:21:23.940 --> 00:21:27.039 million penalty for violating the probation from 00:21:27.039 --> 00:21:29.500 the 2016 case. What were the new violations? 00:21:29.980 --> 00:21:32.960 The list is incredible. Discharging plastic into 00:21:32.960 --> 00:21:35.140 the waters in the Bahamas, more falsified records, 00:21:35.319 --> 00:21:38.039 and this is the worst part, actively interfering 00:21:38.039 --> 00:21:40.240 with the court -appointed monitor who was supposed 00:21:40.240 --> 00:21:42.640 to be helping them fix things. So even with a 00:21:42.640 --> 00:21:45.240 federal watchdog on board, they were still trying 00:21:45.240 --> 00:21:46.900 to get away with it. It raises a fundamental 00:21:46.900 --> 00:21:49.589 question about governance, doesn't it? How does 00:21:49.589 --> 00:21:52.690 a company this huge and this geographically dispersed 00:21:52.690 --> 00:21:56.390 ensure that the pressure to make a profit doesn't 00:21:56.390 --> 00:21:58.869 just steamroll basic legal and ethical standards? 00:21:59.130 --> 00:22:00.869 And it wasn't just environmental issues. They 00:22:00.869 --> 00:22:03.750 also had a terrible human tragedy in 2012. The 00:22:03.750 --> 00:22:06.650 Costa Concordia. The ship capsized off the coast 00:22:06.650 --> 00:22:09.250 of Italy. 32 people died. A terrible, terrible 00:22:09.250 --> 00:22:11.529 incident. And while the immediate fault lay with 00:22:11.529 --> 00:22:13.849 the captain, who made a reckless deviation from 00:22:13.849 --> 00:22:15.809 the course. The investigation found the company 00:22:15.809 --> 00:22:18.829 itself was also to blame. Right. Costa Cruzes 00:22:18.829 --> 00:22:21.210 was fined for what the report called general 00:22:21.210 --> 00:22:24.609 bad organization. It pointed to systemic problems, 00:22:24.869 --> 00:22:27.369 a lack of training, and a culture that allowed 00:22:27.369 --> 00:22:29.509 that kind of recklessness to happen. And then, 00:22:29.630 --> 00:22:33.250 as if all that wasn't enough, the entire industry 00:22:33.250 --> 00:22:36.569 was hit by the ultimate crisis, the COVID -19 00:22:36.569 --> 00:22:39.369 pandemic. An absolutely existential threat. The 00:22:39.369 --> 00:22:41.609 entire global fleet was forced to stop sailing 00:22:41.609 --> 00:22:45.369 in March 2020. No revenue. But all the costs 00:22:45.369 --> 00:22:47.369 of maintaining these massive ships were still 00:22:47.369 --> 00:22:50.190 there. The human cost was immediate. 55 passengers 00:22:50.190 --> 00:22:52.349 on their ships died in those early days. And 00:22:52.349 --> 00:22:54.329 the financial bleeding was catastrophic. They 00:22:54.329 --> 00:22:57.700 had to downsize and fast. In September 2020, 00:22:57.920 --> 00:22:59.799 they announced they were getting rid of 18 ships. 00:22:59.940 --> 00:23:02.380 12 % of their entire fleet. And that number eventually 00:23:02.380 --> 00:23:04.839 grew to 19. They scrapped ships that had been 00:23:04.839 --> 00:23:07.200 around for decades, like the Carnival Fantasy. 00:23:07.460 --> 00:23:09.140 The financial reports from that time are just 00:23:09.140 --> 00:23:12.299 brutal. They are. A net loss of $1 .7 billion 00:23:12.299 --> 00:23:15.240 in just the third quarter of 2020. Then another 00:23:15.240 --> 00:23:18.160 $1 .9 billion loss in the fourth quarter. How 00:23:18.160 --> 00:23:21.400 did they survive? Debt. They took on billions 00:23:21.400 --> 00:23:23.759 in new debt, which is why their equity position. 00:23:24.220 --> 00:23:26.779 is what is today. And they had to delay new ship 00:23:26.779 --> 00:23:29.059 deliveries, which messed up their whole modernization 00:23:29.059 --> 00:23:31.420 plan. But their public response was all about 00:23:31.420 --> 00:23:34.579 looking forward, focusing on how they could restart 00:23:34.579 --> 00:23:38.200 safely. Yes. The CEO at the time was very vocal 00:23:38.200 --> 00:23:41.359 about universal testing. That was their strategy. 00:23:41.740 --> 00:23:44.200 They argued that because they could create a 00:23:44.200 --> 00:23:47.279 controlled bubble on a ship with rigorous testing 00:23:47.279 --> 00:23:49.700 and quarantines, they could actually offer a 00:23:49.700 --> 00:23:52.000 safer environment than other types of travel. 00:23:52.250 --> 00:23:54.549 And that argument, combined with their ability 00:23:54.549 --> 00:23:57.410 to raise enough cash to weather the storm, is 00:23:57.410 --> 00:23:59.769 ultimately what allowed them to survive and get 00:23:59.769 --> 00:24:01.650 back to building those new mega ships we just 00:24:01.650 --> 00:24:03.940 talked about. It just shows the incredible extremes 00:24:03.940 --> 00:24:06.640 they operate between. One minute you're managing 00:24:06.640 --> 00:24:09.039 a global health crisis, the next you're signing 00:24:09.039 --> 00:24:12.380 a check for a $2 billion vessel. The sheer complexity 00:24:12.380 --> 00:24:14.819 of navigating a company like this is hard to 00:24:14.819 --> 00:24:17.400 fathom. It really is. I think what stands out 00:24:17.400 --> 00:24:19.839 most from this entire deep dive is just the scale 00:24:19.839 --> 00:24:21.940 of the ambition. We've talked about the sheer 00:24:21.940 --> 00:24:25.740 size, a $25 billion operation, and we've decoded 00:24:25.740 --> 00:24:28.900 that brilliant, complex, dual -listed structure. 00:24:29.359 --> 00:24:31.440 A structure that was essentially the trophy they 00:24:31.440 --> 00:24:34.240 won after that hostile takeover of P &O Princess 00:24:34.240 --> 00:24:37.380 back in 2003. And we traced the history from 00:24:37.380 --> 00:24:40.880 Ted Arison's $1 gamble and that crucial 1987 00:24:40.880 --> 00:24:44.180 IPO. Which funded the shopping spree that led 00:24:44.180 --> 00:24:46.599 to this incredibly segmented portfolio where 00:24:46.599 --> 00:24:48.880 you've got ADA for the German market and Cunard 00:24:48.880 --> 00:24:51.759 for, well, for royalty. And we had to spend time 00:24:51.759 --> 00:24:54.859 on the friction points. the deliberate environmental 00:24:54.859 --> 00:24:57.740 misconduct that led to those huge criminal fines. 00:24:57.900 --> 00:25:00.240 The systemic failures that the Costa Concordia 00:25:00.240 --> 00:25:02.500 disaster exposed and the incredible resilience 00:25:02.500 --> 00:25:05.220 they needed to survive a complete industry shutdown. 00:25:05.900 --> 00:25:07.720 Before we get to our final thought, it's worth 00:25:07.720 --> 00:25:09.480 just taking a moment to appreciate the cultural 00:25:09.480 --> 00:25:11.720 footprint of these brands. I mean, some of the 00:25:11.720 --> 00:25:13.700 most famous ships in modern history have sailed 00:25:13.700 --> 00:25:16.150 for them. Oh, absolutely. Think about the Pacific 00:25:16.150 --> 00:25:18.950 Princess. It was the literal setting for the 00:25:18.950 --> 00:25:21.769 love boat. It defined what cruising meant for 00:25:21.769 --> 00:25:23.869 an entire generation. And the Queen Elizabeth 00:25:23.869 --> 00:25:27.210 II, the QE II. She was the flagship of Cunard 00:25:27.210 --> 00:25:29.970 when Carnival bought them, the absolute pinnacle 00:25:29.970 --> 00:25:32.190 of transatlantic travel. You also have ships 00:25:32.190 --> 00:25:34.789 with real historical weight, like the Edonia. 00:25:35.009 --> 00:25:37.289 That was the first cruise ship to sail from the 00:25:37.289 --> 00:25:40.069 U .S. to Cuba after the Amargo. And the Adora 00:25:40.069 --> 00:25:42.490 Magic City from that Chinese joint venture they 00:25:42.490 --> 00:25:44.140 sold, the first cruise ship ever. ever built 00:25:44.140 --> 00:25:46.579 in China. That's a huge industrial milestone. 00:25:46.920 --> 00:25:49.420 And all those ships, they really lead us perfectly 00:25:49.420 --> 00:25:52.420 to our final provocative thought for you to think 00:25:52.420 --> 00:25:54.579 about. Carnival Corporation in Palak is in this 00:25:54.579 --> 00:25:57.420 constant balancing act. On one side, you have 00:25:57.420 --> 00:26:00.259 centuries of maritime heritage they've acquired. 00:26:00.440 --> 00:26:02.980 On the other, you have the brutal demands of 00:26:02.980 --> 00:26:06.079 modern corporate strategy, hostile takeovers, 00:26:06.259 --> 00:26:09.539 complex financial engineering, multibillion -dollar 00:26:09.539 --> 00:26:12.539 orders. And caught in the middle is this ever 00:26:12.539 --> 00:26:15.200 -growing demand for real demonstrable safety 00:26:15.200 --> 00:26:17.819 and environmental accountability. So it's a question 00:26:17.819 --> 00:26:20.440 of governance versus growth, right? Exactly. 00:26:20.839 --> 00:26:24.440 Committing $1 .75 billion to each of those three 00:26:24.440 --> 00:26:27.359 new mega ships, planning their investments all 00:26:27.359 --> 00:26:30.559 the way out to 2033. It's a monumental bet on 00:26:30.559 --> 00:26:32.519 the future. But what this deep dive suggests 00:26:32.519 --> 00:26:35.220 is that the long -term success of this massive 00:26:35.220 --> 00:26:37.990 floating empire It doesn't just depend on filling 00:26:37.990 --> 00:26:41.630 the 6 ,200 beds on each of those ships. No. It 00:26:41.630 --> 00:26:43.750 hinges on whether they can finally prove that 00:26:43.750 --> 00:26:45.529 their internal compliance and their corporate 00:26:45.529 --> 00:26:48.170 ethics can actually match the staggering scale 00:26:48.170 --> 00:26:50.529 of their financial ambition. That is the ultimate 00:26:50.529 --> 00:26:53.269 test for a global tourism giant. A truly fascinating 00:26:53.269 --> 00:26:55.890 look at a company that is so much more than just 00:26:55.890 --> 00:26:57.769 the sum of its ships. Thanks for taking the steep 00:26:57.769 --> 00:26:58.990 dive with us. We'll see you next time.