we are taking you to the high seas. the cruise industry raked in more than $37 billion in revenue last year. than 21sail for more billion passengers. what does it take to be the biggest fish in the sea? we find out from the two biggest ceos in the business. i wanted the biggest and the best. of royalain is ceo caribbean which are more than $8

billion last year. too sad top, his company has been $3 billion on new ships that have everything a cruiser could want and some things they never expected. this is the next generation of cruise ships. we are striving to move the bar higher and higher. royal caribbean may have one of the biggest most of the water, biggerold donald says isn't always better at it has a market share to prove it. we fill 80 million passenger cars day and year. carnival has nearly 50% of all cruising business and told in $16 billion a year. caribbean.oyal donald says with 101 ships in the fleet, staying atop is all about variety. we have nine brands. introvertur social or come we have a great cruise.

the industry has made huge gains --ce last reception recession. profit margins are in the single digits. things like this start to hit the headlines. this will be a disaster. we never want to go on a cruise ship again. years, the several industry has run aground on very public disasters. , to theal outbreaks devastating thinking of a ship nearly twice the size of the titanic, killing 32 people. a publictry is facing relations nightmare that could keep passengers ashore. captains of industry have what it takes to turn the ship around and sail back into double-digit profit margins? the answer may lie halfway around the world. it is all has on that. a titans at the table.

most americans remember titanic as a movie. giant ocean line is like this were the only way for the masses to cross the atlantic in starting in the 1960's, flying replace cruising when jetliners took to the skies. a render these seagoing vessels obsolete. not long after, the massive blinders were reimagined for a last purpose and ocean bound getaway. be line is the vote would used more for recreation than transportation. when the show, the lobo, became popular in the 1970's, it helped it into a giant growth industry. we cover the bases from a-z. to justess wasn't due

bigger ships. by registering ships under foreign flags like liberia or panama, companies avoided costly u.s. labor laws and environmental and tax regulations that regular land-based tourism business's's were forced to follow. between 1970 and 2014, the cruise industry's passenger load through 4000%. from 500,000 to more than 21 billion cruisers e.g. are. but the industry's environmental practices have drawn a lot of scrutiny the past. the industry has been plagued with a series of incidents that have hit the headlines and scare passengers and the public alike. forced caribbean cruise to turn back when 200 people on board got but nora virus ridden some nora virus outbreaks on a separate cruiser/year.

two and a bolus scare that created panic on a carnival magic cruise ship. we knew something bad was happening. of the custer concordia that killed 32 people and led it is cap in prison. then there was p the infamousoop cruise. when a power outage stranded 4000 passengers without food, water or working toilets. days and days of misery. that happened just month before arnold donald took the hell. as he told me, don't believe all the hype. 99% of everyone that cruises, they just have a great time. how many times do people have our stuff on the runway on airplanes, how many times do they have a traffic jam that they are stuck in on a highway. those kinds of incidents, now

the integrity a, that was an accident and a tragedy. serious. more that happens once in a hundred years. a newcomer to the captain's chair, he only became ceo of carnival corporation in 2013. founding by carnivals family. he charted a new course for the biggest name in the industry. under the banner of the cruise line industry association, there are 62 cruise lines worldwide, servicing more than 21 billion passengers. with big names like disney and norwegian joining carnival and royal caribbean. carnival is a largest with a other brands with more than 120,000 employees and 10 million passengers last year, nearly half of the cruising population. that bigger market share also means a bigger spotlight when things go wrong. between 2009 at 213 300 plus

incidents i cruise ship, whether they are sharp -- smaller very it upthe ones that make to national networks. the perception that these are happening more and more, how do you come back with that? our satisfaction scores are through the roof. use of the excitement of the guests. this is just not true. -- can do anything and had and have a one-off incident. 80 million guess, that means 79 having not only a smooth day, they are having the vacation of a lifetime. areher these incidents overblown, there is no denying that people are talking. according to the cdc, ships sailing under the carnival flag were here with 17 cases of nora viruses since 2012. cruise,g that poop

donald said they has sunk $700 million in two improvements so those incidents never happen again. safety is not the only issue these days. the industry is also fighting that only a certain type of person claims a board to cruise. when i talk to people about going on a cruise, generally speaking, the perception is negative. or thator citizens, younger people don't go on cruises. or they have read about the triumph or they have read about the custer concordia. how do you change of perception? challenge for us. we have 3.5% of the vacation going population that cruises in a gay. -- in a year. the people that cruise love it. people say i'm going to get sea

sick or i don't want to be in the buffet line with other people. all these negative things that don't exist. when we come back, arnold donald takes me on a two or of the breeze to show me why carnival is the king of cruising. later, richard fain of royal caribbean pulls out all the stops on their latest ship. he is out to prove that in order to pull it out of the competition, it is go big or go home. they want the in the best and te biggest and the best creature of both -- shop

when you walk into one of carnivals ships first thing you noted his amusement style attractions. it is like a county fair on water. after you dry off it is time to take in some extravagant vegas style entertainment. the news off to a meal fit for a queen or king. offcan burn the calories all in the same place. we have personal trainers also dietitians.

we walked up the decks from the spot. the spot is my favorite place on the ship. hotspots wherer he showed me some of his signature dance moves. aboard hee amenities said when it comes to cruising there is no one one-size-fits-all ship. a cruise is not a cruise is not a cruise. every brand has a different type of cruising experience. there is a reason for that. some people want lots of parting, water parks lots of excitement, let's of kids and families around. others want to relax and be with their immediate close ones. so, you have to have different types of offerings for people. if you get on the right cruise, you will love it. betty: with over 100 vessels, carnival has a different ship for whatever floats your boat. not far behind is royal caribbean ceo richard fain.

he says he has a boat that is so big, it has it all, making it hard to feel trapped at sea. richard: if it has surfing on board, skydiving on board, bumper cars, it's hard to say that i'm going to feel confined. betty: with five million passengers, royal caribbean is the number two player. earning more than a billion dollars in revenue last year. richard fain is determined to close the gap on the competition, and to do that, he would need a bigger boat. it is called the quantum of the seas. richard: people wanted more choice. they do not want a regimented vacation and want to have more choices to pick from. we wanted to provide something where the entertainment gave them a plethora of activities to do. with the food selection, where

they can choose any kind of foods whenever they wanted it. i would say that probably the biggest changes is the level of choice the ship offers. we have this new dynamic dining -- betty: he took me on a tour. i at over 1000 feet long, with nearly 5000 passengers, it's one of the largest cruise ships on water. we are how many stories up? richard: almost 30 stories up. this is a perspective you never get to see. betty: it does. this is amazing. at the very highest, we were above the statue of liberty. in 300 feet out over the water. a richard: it's really cool. betty: the northstar is just the first attraction that has

everything you can think of. and then some. here we go. lucky number eight. i'm taking this one. bumper cars might be the last thing you would expect to see on a cruise ship. here on the quantum of the seas it somehow feels right at home. and if being at sea is not enough for you, this boat has a way of getting you airborne. >> am i ready for this or what? the best job in the world. betty: there is the requisite high-end shopping. and of course, fine dining. can i sample something? you with 18 restaurants to choose from, the real experience is not just the cuisine, it's in how you get to it.

richard: this is what we call royal iq, dynamic dining. it's too many for a page. if you want to reserve space, just hit reserve and it comes up and ask you how many want and when you want it. betty: you can do this on your mobile phone. technology is part of what makes royal caribbean stand apart from the competition. dynamic timing is the tip of the iceberg. richard: we even track your baggages. you can look on your iphone and say that my suitcase is in the elevator or it is in the hallway towards going to security, and these kinds of capabilities i think are things that we probably will look back on in a very short time and say, can you imagine what this was like before quantum of the seas? betty: for all the over top will attractions, is dropping a

billion dollars on a single ship the key to raising profit? arnold donald is not convinced. arnold: there will be a lot of people who will not want to sail on quantum of the seas. that's not how they want to spend your time. a betty: you don't see it as a and betty: you don't see it as a game changer. arnold: i see it as a game changer in certain features on board our ship. as a game changer for the youas a game changer for the industry, every new ship is a game changer. quantum of the seas in the contemporary category, where people are looking for lots of activities and that kind of stuff, a mall of america type of experience. it is a game changer for that in type of experience. betty: arnold called quantum of the seas the mall of america of ships. richard: i am not going to will comment on what he said.

in i think you will have trouble finding a mall on board. betty: the one thing both ceos believe, the incident that cast and a shadow over the industry is a thing of the past, and the bargain ticket that convinced passengers to set sail, a discount of 80%, may go away. richard: the discounting due to those incidences was serious, and i think we are now moving quickly away from that. i think you will see a lot less discounting. in fact, i think our focus needs to be not on offering the cheapest cruise, and if you look around, you will see why it does not make sense for us to try to sell the cheapest cruise, but the best cruise. in fact, one of the other things is we are saying that as we get into 2015, past the first quarter, quiet a solid year. we are seeing the opportunity to raise our prices, even if it

means we have empty staterooms. is arnold: i would say book as a soon as you can. the probability that prices will willthe probability that prices will go lower is not very high. they don't need to. prices will still make it the best vacation value by far versus of land-based vacation. betty: are you willing to give you are up market share to keep your prices above the discounted rates? arnold: it's not market share. the question is occupancy. how many cabins are left unfilled, or how many cabins have one guest versus three or four guests? we are absolutely willing to trade off occupancy to get the price up from a business standpoint. betty: coming up, there is one you and demographic that both you companies have a hard time cracking, millennials. they may be the key to sailing towards higher profits. later, it is full speed ahead to inlater, it is full speed ahead

to a place that may just push the entire industry into bold new waters. ♪ no betty: this is ship rock, norwegian cruise lines solution to younger cruisers, millennials

who have a lot of money to spend, $1.3 trillion of it. and a piece of that demographic could help the industry sail back into double-digit profit margins. the cruising industry group out with numbers say that the in with numbers say that the average cruiser is about 50 years old, makes over $100,000, white, and generally an affluent traveler, but they are essentially that demographic. all in it's not very diverse. a richard: that is part of what we need to help explain because the diversity is growing dramatically, both in ethnicity, age. betty: some of the reports say abetty: some of the reports say that the reason why it is such a way game changer, or at least something that people are excited about, is that it's catering towards the millennials, the younger travelers. you is this an attempt to essentially, a very big attempt, and to get to 20-year-olds and 30-year-olds on your ship? richard: it is directed to expanding our market.

the millennials are a prime market for us, and a growing one. betty: royal caribbean has managed to tackle the one thing almost every millennial wants, which happens to be one of the hardest things to do on the water, providing wi-fi. richard: bandwidth on this ship is 250 times the next best ship. betty: wow. richard: in fact, the bandwidth on the ship is better than the combined bandwidth of every other cruise ship in the world. betty: according to arnold donald, the millennial generation defies stereotypes, but it will no generation defies stereotypes, and providing wi-fi is my is far from the only one i magical bullet to get them to cruise more. arnold: millennials all over the place are like every other generation. some millennials like heavy social exchange and interaction, and in terms of parties. some like doing it on the internet.

some want more private time. a lot of them are adventure seekers. a lot of them want to give back. they like impact travel, travel where they can go do something and help a local community or help an individual. betty: you need to get millennials cruising more. is that a misperception of the industry? arnold: it is a little bit of a misperception. we have weddings on our ships, and there are often young people getting married and chose a cruise as their honeymoon experience and their wedding reception experience. so we have millennials on our ships around the world. betty: but the cruising industry does not live and die by getting millennials on their cruise. arnold: they do not live and die, but you want to build your base for the future. betty: still to come, the one destination that every cruising company is ready to court.

how big is china going to be? >> it will eventually be the largest cruise market in the world. ♪ betty: the cruising industry has built its success in the west, but halfway around the world, there is another market on the horizon they could change the game completely. richard: the demographic shift in china and the growth of the middle class is one of the biggest single demographic explosions in history, one of the big demographic shifts we have gone through has been the baby boomer generation. what's happening in china today makes that look insignificant.

betty: royal caribbean ceo richard fain says that in a few years, the middle class in china will not only be bigger than the middle class in america, but bigger than america. consumer spending in china is expected to increase of about 7% every year. by 2020, the total could be $5.7 trillion. remember the quantum of the seas, the ship with every bell and whistle you can think of? it is setting sail to its new home port of shanghai. one big advantage of expanding in china, not having to deal with the stodgy, old images of a typical cruiser. in china, the cruise liners can start with a clean slate. richard: this whole concept is new and exciting. there is no old-fashioned myths about cruising. there is none of this cruising is for old people. if you are a family traveler,

you can enjoy it together. how many vacations can you have where a 70-year-old and a 20-year-old can go together and both rave about it? so, we have that, and it is extraordinary. there are not many places you can do that. china, the family bond is stronger than in the western world. so, the ability to offer multi traveling in china is even more viable. betty: carnival ceo arnold donald has no intention of being left in royal caribbean's wake when it comes to china. he says it is a market that they are ready have both feet in since 2006. arnold: we sail to over 700 ports in the world every year. we source from everywhere. we have four ships home ported in china, four in shanghai. betty: carnival carries chinese passengers to japan and south korea. last year, donald put his chief

operating officer in shanghai and signed a deal to develop the cruise industry with a local operator, china merchants group. arnold: there is a lot of work to be done in china. we have to develop ports. the reality is that it is a good market today. we have four ships there. both brands are profitable. the chinese government has declared through their five year economic plan their intention to develop the cruise industry. that means a lot of things will happen relatively quickly. we want to be there to help make it happen in a way that we think will help the chinese government established the cruise industry they want, that will be sustainable for years to come. betty: how often are you there now? arnold: i have been on the job a year and a half or so and have made five trips to china. it's a very active market under development.

it will take some time. we are very happy with what we have today. we see it someday being as large as any cruise market in the world. betty: donald says carnival is focusing on one thing the chinese can never get enough of, luxury shopping. arnold: the chinese guests really like high-end retail, luxury brands. betty: they want louis vuitton, prada. arnold: they really like high-end stuff, and so we have to reconfigure our retail there for the very high end. each ship is different. a lot of americans are shoppers. they want great quality and really great prices. they are not as hung up in general on big luxury brands. betty: is there one brand that you would like to get on board that you haven't gotten yet? arnold: in terms of a retail brand? i would love to get bentley,

rolls-royce automobiles. betty: whether it is the promise of the emerging chinese market or the appeal of the next generation of millennial cruisers, these two titans are laying all on the line and moving ahead to shake off the negative news of the past. royal caribbean's flagship vessel, quantum of the seas, won't be top dog for long. in 2016, they're rolling out a bigger, better, bolder cruise ship, the harmony of the seas, with the ability to carry 5000 passengers, the llargest cruise ship in the ocean. donald is pulling out all the stops. his goal is to see the rest of the world climb aboard.

arnold: cruising is the greatest vacation value there is. it is one of the greatest vacations you could possibly have. when people experience the right product for them, they are hooked for life. ♪

betty liu: hi. tom steyer: good morning. betty: tonight on "titans at the table" -- i will be chatting with billionaire businessman turned environmental activist tom steyer. tom steyer was born and raised in the financial capital of the u.s., new york city, but chose to open his investment firm farallon capital management in san francisco. he founded the company in 1986 with $8 million, and by the time he stepped down in 2012, he had turned the initial investment into $30 billion, making farallon the fourth-largest hedge fund in the world. his personal fortune is an estimated $2.6 billion.