This financial analysis report examines two high-profile competitors, Royal Caribbean International and Carnival Cruise Line, in the cruise industry in order to evaluate the company's performance and financial health. The sector began an important phase of growth in the late 1960s and early 1970s reaching growth in excess of 2,100%. The initial goal of the cruise industry was to develop a mass market since until then cruising was an activity for the elite. One way to achieve this was through economies of scale as larger ships were able to accommodate more customers and create additional opportunities for sources of income on board. The global growth rate of the cruise industry has been long-lasting and stable, around 7% per year, despite economic cycles of growth and recession. For example, the 2008-2009 financial crisis had no impact on demand for cruises. This highlights that until now the industry has been fundamentally supply-based; ships are built and customers are found to fill them through various marketing strategies and discounts. Cruise lines compete with other vacation alternatives, such as land-based resort hotels and tourist destinations for consumer leisure. Demand for such assets is influenced by general political and economic conditions. Businesses in the vacation market depend on consumer discretionary spending. Overall, 2012 was a very difficult year for the cruise industry. Carnival International is still recovering from the effects of the sinking of the Costa Concordia off the coast of Italy in January 2012. On the other hand, Royal Caribbean's biggest challenge in 2012 was due to one-time impairment charges of nearly $385 million of dollars related to the Spanish Pullma line.... .. middle of the paper ......t example of short-term concerns that offer long-term investors the opportunity to make a great investment.It works Cited http:/ /media.royalcaribbean.com/content/en_US/pdf/13034530_RCL_2012StwrdshpTwoPgrs_v4.pdf http://analysisreport.morningstar.com/stock/research?t=RCL&culture=en-US®ion=usa&cur=USD&productcode=MLE http://answers .businesslibrary.uflib.ufl.edu/a.php?qid=76331 http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=RCL:NYQ http://www. miamiherald.com/2013/03/15/3289232/carnival-lowers-financial-outlook.html http://www.ukessays.com/essays/tourism/sustainable-measure-for-royal-caribbean-tourism-essay.php http://beta.fool.com/ruperthargreav/2013/03/05/does-carnivals -problema-presente-rappello-corrente/25676/ http://beta.fool.com/hoangquocanh/2013/03/20/ -161/27482/ http://beta.fool.com/kwmatt82/2013/01/23/royal-caribbean-earnings-bigger-better/22325/