Cruises have long been a popular way to vacation. The biggest cruise companies own several cruise lines, each taking a unique approach to keeping their customers loyal. You have several attractive options if you want to invest in cruise line stocks.
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Trends
Cruise line industry trends
Almost all travel companies were affected by the COVID-19 pandemic, but cruise lines were hit the hardest. Cruise ships were docked for more than a year, causing their owners to miss out on billion of dollars in earnings. The number of cruise passengers plummeted from 29.7 million in 2019 to just 4.8 million in 2021.
But the cruise industry has made a strong comeback. The number of cruise passengers jumped to 20.4 million in 2022 and 31.7 million in 2023, surpassing pre-pandemic numbers.
As of the end of last year, cruise lines have even rebounded more than other forms of travel and tourism. International tourism numbers, for example, are still 12% lower than they were in 2019.
While cruises have traditionally been considered an activity for older adults, they're growing in popularity with younger generations. Cruise Lines International Association reports that 36% of cruise travelers are younger than 40. Also, 27% of cruisers over the last two years are new passengers.
Best cruise stocks
Top cruise line stocks in 2024
These are our picks for the best cruise line companies:
| Cruise line stock | Market cap as of April 2024 |
|---|---|
| Royal Caribbean Cruises | $33.16 billion |
| Carnival Corp. | $17.89 billion |
| Lindblad Expeditions | $385.76 million |
| Norwegian Cruise Line | $7.79 billion |
Royal Caribbean
1. Royal Caribbean
Royal Caribbean (RCL 1.44%) is distinguished as being one of the most innovative cruise lines. Its ships are packed with state-of-the-art amenities, including virtual balconies, massive water slides, skydiving at sea, and even Broadway shows.
Royal Caribbean has made a number of investments, expanded its fleet, invested in ships powered by clean energy, and prioritized international expansion. Its investments appear to be paying off.
This cruise line hit record revenue numbers of $13.9 billion in 2023, and it could do even better in 2024. It already had the best wave (first-quarter) booking weeks in the company's history. It also reports bookings for all four quarters and all key products are better than they were at the same time last year.
Carnival
2. Carnival
Carnival (CCL 2.01%) is the largest cruise company in the world. It was also one of the first to offer cruises in the price range of the average traveler. Although affordable cruises are more common now, the market was previously dominated by luxury voyages.
This cruise line is still known for its reasonable prices and ability to offer a fun time for everyone. Carnival cruises are popular among families and groups of friends alike, including younger generations. Carnival excels in customer satisfaction, winning the 2024 USA Today Readers' Choice Awards for best ocean cruise line.
Carnival also had a strong 2023 and looks poised to keep growing. Its full-year revenue last year was $21.6 billion, an all-time high. Coming into 2024, it was in its best booked position on record in terms of both price and occupancy rates.
Lindblad Expeditions
3. Lindblad Expeditions
Lindblad Expeditions (LIND 3.86%) isn't your typical cruise company. While others carry thousands of passengers per ship, Lindblad specializes in smaller, more expensive adventure cruises. The maximum capacity for these cruises is typically between 48 and 148 passengers, depending on the trip.
The main competitive advantage that Lindblad enjoys is its ability to offer premium, one-of-a-kind experiences. Travelers with Lindblad can book expeditions all over the world, including to Antarctica, the Caribbean coast, and Patagonia. Because of the types of trips offered, Lindblad has built a loyal base of wealthy customers.
Lindblad expanded its partnership with National Geographic in November 2023, making it the only partner for National Geographic cruises until 2040. It will also be working with The Walt Disney Company (DIS 1.4%), an affiliate of National Geographic, which could be a powerful expansion opportunity.
Norwegian Cruise Line Holdings
4. Norwegian Cruise Line Holdings
Norwegian Cruise Line Holdings (NCLH 1.58%) is a hit among casual cruisers and is known for its laid-back atmosphere. Norwegian offers what it calls "freestyle cruising," meaning its cruises have no dress codes, no set dining times, and no assigned seating.
Norwegian offers a variety of cabin categories, which enables it to accommodate every type of traveler. It was the first cruise line to offer studios exclusively for solo travelers, and it has lodging fit for everyone from people sailing on their own to large families.
The smallest of the three major U.S. cruise lines, Norwegian hasn't quite rebounded as well as Royal Caribbean and Carnival. It also has higher debt levels compared to its competitors.
But Norwegian paid down $1.9 billion in debt last year, it's keeping its ships full, and it's increasing capacity. It took delivery of three ships in 2023, the most deliveries in one year in its history. Norwegian is at least worth keeping an eye on to see how it performs.
Related investing topics
Cruise lines faced an enormous challenge during the pandemic, but the big names have recovered well. They may not exactly be a good fit for investors in search of safe stocks, but they offer quite a bit of upside.
Most importantly, cruise lines tend to have a passionate customer base with plenty of repeat passengers. Over the long term, cruise line stocks may be a good value investment provided you are comfortable with some volatility.
FAQ
Cruise stocks FAQ
Are cruise lines worth investing in?
It could be worthwhile to add cruise line stocks to your portfolio now that the industry is back to pre-pandemic numbers. Cruise companies can be volatile, but they have high customer loyalty.
Which cruise line is financially strongest?
Carnival is the largest cruise line and reached an all-time high in revenue in 2023, so it's arguably the financially strongest cruise line.
Do cruise line stocks pay a dividend?
Cruise line stocks don't pay a dividend. Carnival and Royal Caribbean Cruises each paid a dividend in the past, but they stopped during the pandemic.
What is the fastest-growing cruise company?
MSC Cruises is reportedly the fastest-growing cruise company. Like many cruise lines, it's a private company.
Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends Carnival Corp. and Lindblad Expeditions. The Motley Fool has a disclosure policy.
