Arnold Donald, Carnival Corporation's 1st Black CEO, Navigates Cruise Lines to $1.5 Billion in Profit

MIAMI – Arnold Donald has swag. Not the phony suburban swag, but that old-school, down-home New Orleans Black neighborhood kind of swag that signals the confident chief executive strolling into the board room is clearly in charge. As Carnival Corporation’s first African-American CEO, Donald has prepared for this high-level, high-profile, high-paid position all his life.
At the prestigious St. Augustine High School in New Orleans, an all-boys, all-African-American Catholic school where Donald received a scholarship, he recalled this inspirational mantra from his teachers: “Three times a day, they would say: ‘Gentlemen, prepare yourselves, you’re going to run the world.’ ”
It’s close enough. Today, Donald, 60, leads the world’s largest cruise line with 120,000 employees and 100 ships for the 10.5 million passengers who cruise with Carnival each year. Sitting inside his spacious 10th-floor office at Carnival Corp. in suburban Miami, Donald talked about his vision for leading the Carnival Corporation. For Donald, it’s all about trying to offer unprecedented customer service.
He spends some of his time sifting through “psycho-graphics” to determine which of his nine “brands” – cruise ships — will best suit individual passengers. He enjoys talking to “guests” about their experiences while cruising and often asks passengers how Carnival can better serve them.
“We’re in the vacation business and part of our job is to help people have a good time,” Donald said in an interview with BlackAmericaWeb.com. “We can’t make more very fast. We can’t sell more volume. It’s not like selling shoes. Our ships sail full, we can’t sell more cabins, you can’t just build as many ships as you want in a year, there are only so many shipyards and they are limited in the number of ships they can build in a year.” “So we want to create onboard experiences where we’re giving the guests what they want,” he explained. “And therefore they are willing to pay for it. So the trick is to determine what the guests really want.”
Donald’s leadership demeanor is reminiscent of the affable Ed Koch, the former mayor of New York, who was famous for walking around the city charming residents and asking: “How am I doing?” Engaging, charismatic and gregarious, Donald is not the typical CEO. At his core, Donald is a people person – an over-achieving, quick-study executive with a hearty laugh who is known for his progressive leadership style.
Donald frequently asks his employees for their advice – and he actually listens to them. “It’s really uplifting to be around that level of human spirit all the time,” Donald said. “The level of energy here is contagious.”
After graduating from Carleton College in 1976, Arnold and his wife, Hazel, moved to St. Louis to pursue engineering degrees at Washington University. After graduating from Washington University, Arnold began his career at Monsanto, also in St. Louis, while pursuing his MBA from the University of Chicago. Today, Donald has earned a reputation for his keen attention to detail and a clear understanding of how to keep Carnival at the top of a highly-competitive industry. He often reviews spreadsheets, analyzes data, consults with consultants, and studies profits and expenditures, but the bottom line for Donald is a no-brainer – keeping customers happy and coming back for more cruises.
Donald works diligently to find the best cruises for all passengers, particularly families with children and teenagers. Last year, Donald teamed up with comedian Cedric the Entertainer to market – for the first time — all nine of Carnival Corp’s brands in a major way. Donald and Cedric the Entertainer called for consumers to provide input on four TV commercials, one of which aired during the Super Bowl on Feb. 1. Cedric the Entertainer’s involvement underscores one thing Donald knows instinctively: Black folks love to cruise.
“As Carnival’s first Black CEO, I have learned the obvious: Black folks are like everybody else,” Donald said. “There is range of interests, a range of orientation, and there are African-Americans who strongly prefer the (luxury) Seabourn experience, and there are African-Americans who strongly prefer our Carnival Cruise Lines (more affordable) experience. You have studious African-Americans, extroverts; folks who want to party,” he added. “Carnival is probably more diverse in the traditional sense than many of the other brands. It’s more contemporary marketing. But we have African American guests on all of our brands.”
The diversity of Carnival Cruise Lines is perhaps why Donald agreed to partner with Tom Joyner’s Fantastic Voyage for the fourth straight year. This year, the cruise, which sails from Miami on April 11, has been extended to eight days and Donald said Carnival is offering Joyner its newest and largest ship, the Carnival Breeze, which can accommodate 3,690 passengers.
“The people on the ship have so much energy and lots of positive energy,” Donald said of the Fantastic Voyage. “Our people love working with the Tom Joyner’s Fantastic Voyage and our people love interacting with the guests onboard.”
Donald took over Carnival Corporation in July 2013, when Micky Arison, the son of Carnival Corp.’s founder and the CEO since 1979, stepped aside. At that point, Carnival had experienced some significant setbacks. First, the Concordia, from its Costa Cruises brand, sank off the coast of Italy, killing 32 people in January 2012. Then, in February 2013, an engine-room fire on the Triumph, from its Carnival Cruise Line brand, left the ship without power for five days. Passengers were left stranded without air conditioning, hot food and use of most toilets.
“We started out with the media not being our friends,” Donald recalled, saying it was his job to regain the trust of passengers who were reluctant to cruise with Carnival after the much-publicized incidents. “The media was hard on the industry and hard on us.”
But Donald, who served on Carnival’s board for 12 years, seems to have weathered the storms. In the first full year under his leadership, Carnival Corporation saw significant earnings improvement, including a full-year 2014 net profit of $1.5 billion, according to Carnival officials. The company finished its 2014 fiscal year with a strong fourth quarter, exceeding guidance even before factoring in the benefits of lower fuels and leading to 2014 full year cash from operations of nearly $3.5 billion.
Carnival’s brands range from more affordable cruises like Carnival Cruise Lines and Princess Cruises to higher end, luxury brands like Seabourn Cruise Line and Cunard Line, which operates the grand Queen Elizabeth 2, (QE2) the flagship 70-ton, 963-foot-long oceanliner designed for transatlantic cruising.
“We have 9 brands, each brand caters to different guests,” Donald said. “What we have on the ship is an experience over multiple days, not a singular product, it’s an extended experience that becomes a community for the time the guests are onboard.”
Carnival recently announced plans to build a $700 million ship for its Princess line that is scheduled for delivery in 2017. The as-yet unnamed 143,000-ton vessel will carry 3,560 passengers and feature the successful design platform introduced by sister ships Royal Princess in 2013 and Regal Princess, which entered service this May.
“Cruising is the greatest vacation value there is,” Donald said. “You can’t get high-end restaurants, top-flight entertainment and the number of venues and match that on land. People bond and connect; they grow; they learn about other cultures, they get closer to their loved ones and children. They learn about marine life and the environment; it broadens people and it enriches them through the experiences they have on our ships.”
When he’s not working at Carnival and serving on corporate boards, Donald enjoys writing. He writes non-fiction, children’s stories and poetry. And he prefers to talk about important connections – like family. He’s a father of three and a grandfather of five. Donald’s mother and father raised their own five children as well as 27 foster kids. Fifteen years ago, Donald said he paid for 50 family members to take a cruise.
“To this day, the first thing they will talk about when we get together was that cruise,” Donald recalled. “It was that memorable and that life-transforming. Many of them had never even been out of the city where they lived before; it was the experiences on board, the way we came together as a family of 50. It was spiritual.”
article by Michael H. Cottman via blackamericaweb.com