ENCORE: Cruise Ship Wars | Anchors Aweigh!

In late 1971, Norwegian Cruise Line co-founder Knut Kloster flew from Oslo to Miami to confront his business partner, Ted Arison. An auditor had just discovered a $7 million discrepancy in the company's accounts—more than two-thirds of annual revenue. When Kloster arrived at the Miami port office, Arison was gone. The safe was empty. A call to the bank confirmed it: Arison had closed the accounts and withdrawn every dollar two days earlier. Kloster had been outmaneuvered, and Norwegian Cruise Line was effectively bankrupt.

This episode of Business Wars traces the origins of the modern cruise industry through the founding of its three dominant lines—Norwegian, Royal Caribbean, and Carnival—and the boardroom betrayals, financial gambles, and sheer bravado that turned a struggling transport business into a vacation empire.

From ocean liners to floating resorts

Before the 1960s, traveling by ship was not a vacation—it was a necessity. Ocean liners carried immigrants and business travelers across the Atlantic, and the experience was rarely pleasant. Third-class passengers endured cramped steerage quarters, meager food, and seasickness that reached even the first-class cabins. But after World War II, jet travel made crossing the ocean in hours instead of days, and the passenger ship industry faced extinction.