How Stanley McDonald’s bold vision transformed a single ship into one of the world’s most recognized cruise lines, shaping the modern cruise industry along the way.
Few cruise lines can trace their origin and success to one person but that doesn’t apply to Princess Cruises. Their founder has an amazing story that takes place during the infancy of the very early days of cruising.
Early Beginnings (1965-1970s)
West Coast Canadian businessman Stanley B. McDonald had noticed an opportunity to use passenger ships as floating hotels for the 1962 World’s Fair in Seattle. There was an overt lack of hotel rooms in the area, and the ease and convenience of chartering a few ships to fill that void was a no-brainer. Stanley decided to add a different spin to it and make it a proper cruise. He picked up passengers in San Francisco, then made a short technical stop at Vancouver, and then headed to Seattle for several days before returning to San Francisco 10 days later. He chartered the SS Yarmouth (sister to the Yarmouth Castle) for this in 1962. After repeating this several times that summer, he described the venture as a “howling success.” The time charter of the Yarmouth ended, and she returned to the Caribbean. It was this first foray into the cruise market that gave Stanley the idea to expand on this concept.
In the following years, he started to put together a business plan to repeat this, but for trips to warmer climates. He and his team also wanted to focus on the underserved United States West Coast market and base the ship there. In 1965, his team found a ship owned by Canadian Pacific called the Princess Patricia that was available during the winter months, so they chartered her and sailed her down to Acapulco, Mexico. Canadian Pacific traditionally named their ships with the prefix ‘Empress,’ ‘Duchess,’ or ‘Princess.’ In order to keep things streamlined, Stanley and his team simply named this new venture, Princess Cruises.
After the success of the first ship, he set out to find a more permanent ship to use on a year-round basis. They had heard about this Italian ship called the Italia, which was brand new but had been through three owners so far and only sailed three voyages. Her original owners had gone bankrupt before she was even launched. When the yard did launch the ship, she was then owned by Crociere d’Oltremare of Italy, who subsequently chartered her first to another Italian brand, Fratelli Cosulich. When that folded after the three voyages, they arranged a longer-term charter to Princess Cruises in 1967. The ship operated as Princess Italia until 1973, when her charter ended and she went to Costa Crociere.
An often forgotten ship in the Princess fleet was their third, called the Princess Carla. Originally sailing as the 1951-built Flandre of the French Line, she had been sailing for Costa Crociere at the time but was chartered to Princess in 1967 to sail shorter 3- and 4-night Mexican Riviera cruises.
The Love Boat Era
In the early 1970s, Flagship Cruises, a Norwegian cruise startup, built two state-of-the-art vessels, the Sea Venture and Island Venture. Stanley had actually consulted with Flagship during the initial stages. Despite their modern design, Flagship Cruises struggled to find financial success. An option for a third ship was never exercised, and by 1972, Flagship decided to charter the Island Venture to Princess.
The Island Princess was thus born. This was perfect timing, too, as mentioned above, both the line’s previous ships, Princess Italia and Princess Carla, had to be returned to their owners. Add to this the downturn in the economy in the early ’70s, due in part to the oil crisis, and Princess was in for some rocky times.
The arrival of Island Princess coincided with growing competition in the California cruise market as well, to make things even more challenging. One of Britain’s most famed shipping companies, the Peninsular & Oriental Steam Navigation Company, or simply P&O as it’s commonly known, was looking to break into the lucrative North American market after dominating the European and Australian markets. They arranged to send their newbuild, the Spirit of London, to Los Angeles. In addition, the Italian line Sitmar also competed directly with Princess on their home turf on the West Coast. Sitmar’s diverse fleet, including ships like Fairland and Fairsea (former Cunard liners), further intensified the rivalry.
As Princess Cruises grappled with the 1973 petroleum crisis and financial struggles, Stanley McDonald faced difficulties in expanding the fleet. In a surprising twist, P&O Lines decided to collaborate rather than compete, purchasing Princess Cruises in 1974. The larger and more financially sound P&O was able to leverage the Island Princess’ charter into an outright purchase, as well as extending the transaction to her original sister ship by bringing on the Sea Venture and renaming her the Pacific Princess. They also transferred their Spirit of London to Princess, renaming her the Sun Princess. This singlehandedly created a stronger fleet of three modern ships that would propel Princess Cruises forward.
Princess, being a California-based company, had always had a close partnership with Hollywood and would frequently arrange to have their vessels as the setting for various TV shows. It was this partnership that led to one of the most important events in the rise of the modern cruise industry, the 1976 made-for-TV movie titled The Love Boat. It had been based on the nonfiction book The Love Boats by Jeraldine Saunders , a former cruise director herself, and actually the very first female one.
What quickly followed was the weekly ABC TV series The Love Boat, which ran for 9 seasons. This transported Americans into the world of cruising through their living room TV sets. This, I’d argue, singlehandedly did more than any marketing or promotional campaign ever did for the industry to propel it forward. To this day, to pay homage to this linkage, Princess ships’ whistles blast out The Love Boat theme when leaving a port.
Mergers and Expansions
In 1988, Princess Cruises saw an opportunity to eliminate its major rival and strengthen its position in the U.S. and Australian markets. Princess’ parent company, P&O, reached an agreement to purchase Sitmar Cruises (recall from above, this was a major competitor at the time). The acquisition was one of the most significant in the cruise industry at the time and marked the end of Sitmar as an independent company. For Princess, the deal provided not just new ships but access to Sitmar’s existing customer base and established routes.
With the acquisition, Princess Cruises gained three Sitmar vessels that were already under construction. These became the original Crown Princess, Regal Princess, and Star Princess. These ships were larger, modern, and luxurious, aligning well with Princess’ strategy of expanding its fleet to accommodate the growing demand for cruises.
The Final Merger
During the 1980s and 1990s, Princess Cruises built a reputation for offering luxury vacations and experiences, innovative ship designs, and exotic itineraries. The company expanded into key markets, including Canada & New England, the Caribbean, and the Mediterranean, while also becoming a leader in cruising from the West Coast of the U.S. P&O helped bolster Princess’ fleet, and the line continued to grow, with iconic ships like Royal Princess, the record breaking Sun Princess, and even more record breaking Grand Princess.
In 2000, P&O de-merged its cruise operations from its traditional shipping business, forming P&O Princess Cruises, a standalone cruise company that was one of the largest in the world at the time which allowed for it to go up for bid.
The cruise industry was becoming increasingly competitive, with major players like Carnival Corporation and Royal Caribbean rapidly expanding their fleets and challenging each other to build the largest ships. Carnival Corp., led by Micky Arison, had grown into the industry’s dominant force and he saw this as an opportunity to strengthen its position in the market further by acquiring P&O Princess Cruises.
The Bidding War: Carnival vs. Royal Caribbean
What followed was a dramatic corporate battle that shaped the future of the global cruise industry. In 2001, P&O Princess had announced plans to merge with Royal Caribbean, the second-largest cruise company at the time. This proposed merger was seen as a major move that would create a serious rival to Carnival Corporation in the growing industry.
However, Carnival had other plans. In response to the P&O Princess-Royal Caribbean merger, Carnival launched a surprise takeover bid for P&O Princess, offering a more attractive deal to shareholders. What ensued was a year-long bidding war between Carnival and Royal Caribbean, with regulatory challenges in both the U.S. and Europe complicating the process. P&O Princess’ board initially resisted Carnival’s advances, preferring the Royal Caribbean deal, but Carnival’s financial strength and persistence eventually won out. It is interesting to note that as part of the regulatory approval for this deal, Carnival Corp. would not be allowed to purchase any more brands as there was already too much consolidation going on.
Carnival’s Acquisition of Princess Cruises
In 2003, Carnival Corporation successfully completed its acquisition of P&O Princess Cruises for approximately $5.4 billion, creating the world’s largest cruise company. The deal was a pivotal moment for the industry, consolidating Carnival’s dominance and bringing Princess Cruises into its portfolio of brands.
As part of the Carnival Corp family, Princess Cruises retained its unique identity and operational independence, continuing to cater to its established customer base. Carnival benefited from Princess’ strong presence in key markets like Alaska, Europe, and Australia, and the line’s reputation for offering premium cruising experiences.
After the Acquisition: Princess Cruises’ Growth
Under Carnival Corp, Princess Cruises continued to expand. Princess Cruises, which already had a strong Italian technical group internally, fit in well with Carnival Corp’s Italian technical team, even though throughout its history (and even to this day), Princess has been run fairly independently of other brands. The line iterated on the Grand-class ship design and then launched its first new ship design with the prototype Coral Princess and Island Princess. This was followed by the largely successful Royal-class, which served as the flagship of the lineup until just last year.
Legacy and Impact
Princess Cruises has become known for its diverse itineraries, including popular routes in Alaska, the Caribbean, and Europe, along with a reputation for high-quality service and unique onboard experiences. The brand has consistently been a leader in the cruise industry, adapting to changing consumer preferences and market conditions. Princess has also maintained its position as a leader in Alaskan cruising, with its extensive land-and-sea packages offering immersive experiences in the region.
A final musing: Princess Cruises’ mascot is a giant stuffed bear named Stanley, after founder Stanley B. McDonald.