Cruise Stocks To Sail Smoothly Into 2025: Analyst Sees 'Zero Signs Of Softening'

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Royal Caribbean, Carnival, and Norwegian are leveraging strong booking trends and unique strategies to drive post-pandemic recovery.
Inflationary pressures and rising costs pose challenges, but cruise stocks are well-positioned for long-term market share gains.
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Cruise stocks are cruising in the fast lane, and according to analysts, the seas ahead look crystal clear. Royal Caribbean Group RCL, Carnival Corp CCL, and Norwegian Cruise Line Holdings Ltd NCLH are poised for a strong setup in 2025, backed by rising demand and pricing power, according to JPMorgan analyst Matthew R. Boss.

‘Zero Signs’ Of Demand Softening For Cruise Lines

"Zero signs of softening in any lead indicator," said Boss after attending the Endless Summer Forum in Miami. That includes everything from booking curves to onboard spending – with Royal Caribbean and Norwegian Cruise Line’s management confirming the industry's sturdy footing.

With nearly half of 2025's capacity already booked, cruises are setting sail much earlier than usual, extending bookings as far as 2027.

Royal Caribbean ‘In A Very Good Spot’

RCL is leading the charge. CFO Naftali Holtz stated, “We're in a very good spot,” citing how 70% of passengers make pre-cruise purchases, which translates to a significant onboard spending boost. The company is banking on long-term drivers, including the arrival of new ships like “Utopia of the Seas” and “Star of the Seas” to fuel further growth.

Carnival Prepares For Q3 Earnings

Meanwhile, Carnival is ready to ride the wave, with its third quarter earnings expected to get a lift from the continued surge in demand, particularly in Europe and Alaska.

The company remains optimistic about maintaining its pricing power, which remains about 25% lower than land-based alternatives – a strong selling point for thrifty travelers.

Norwegian’s Management Is ‘Very Confident’

Norwegian Cruise Line remains neutral in JPMorgan’s outlook but sees clear skies ahead. Management expressed "very confident" expectations of hitting a $300 million cost savings target, driven by initiatives such as optimizing fuel use and streamlining menus—all while keeping passengers satisfied.

As Royal Caribbean, Carnival, and Norwegian Cruise Line Holdings navigate the post-pandemic recovery, each is showing unique strengths.

Royal Caribbean’s focus on new ship launches and immersive experiences, Carnival's strong booking trends and cost-efficiency strategies, and Norwegian's premium offerings suggest that all three are well-positioned to benefit from increasing consumer demand. The cruise industry, with its multi-generational appeal and rising demand, seems to be taking a larger slice of the $1.9 trillion global vacation pie.

However, challenges such as inflationary pressures and rising operational costs could impact profitability. Investors will need to weigh these factors as they consider which cruise line is best positioned to capitalize on the industry’s recovery and continue gaining market share.

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