Cruises are among the most popular vacation picks for people of all ages. The uptick in cruising has shown an immaculate rebound following the massive setback of Covid-19. Truly, the tourism industry suffered as a whole. Yet, other forms of travel didn’t see as much revitalization as the cruise sector which set an industry record. The number of passengers in 2023 reached 31.7 million.
With more diverse offerings and pricing, cruises are now appealing to a broader demographic and are already off to the races this year. These three cruise stocks are the cruise lines with the most promising prospects and likelihood to show fantastic growth.
Let’s learn about each cruise line’s unique offerings, pricing and performances that reflect the industry’s upward trend right now.
Carnival (CCL)
Carnival (NYSE:CCL) has the second-largest market cap in the cruise industry. It’s known for its relatively affordable pricing model, which appeals to more average consumers. Carnival’s dedication to providing the price point sets it apart from the image of luxury that many associate with cruising.
Due to its pricing, Carnival has seen great success and is one of the top cruise lines riding the surge in momentum affecting the industry. In the Q1 of this year, Carnival reported record revenue at $5.4 billion and an all-time high in booking volume. The average price of each booking is increasing as well.
Cash hit $1.8 billion, and operating income was $276 million. Also, this leeway has allowed Carnival to successfully order new builds for the first time in five years. The two ships will belong to Carnival’s excel-class and will be delivered in 2027 and 2028.
Further, Carnival emphasizes providing top-tier customer satisfaction and making the joy of its cruises accessible to all. Its broad target market and excellent momentum make it a superb buy.
Lindblad Expeditions (LIND)
Lindblad Expeditions (NASDAQ:LIND) offers a specialized cruise experience, making it unique compared to other cruise lines. The company’s niche is much smaller, more personalized cruises that typically target wealthier customers. For perspective, LIND cruises never exceed more than 150 passengers.
While a smaller passenger load means fewer bookings, the fewer customers is precisely what makes Lindblad Expeditions stand out. The cruise line prides itself on offering unique adventures and trips to almost anywhere in the world. Destinations include Antarctica, Alaska, and other less familiar destinations, giving it a strong edge and a small but loyal customer base.
Also, Lindblad Expeditions has a long-term partnership with National Geographic, offering unique expedition cruises. With over 90 possible destinations and unique trips, each expedition provides an opportunity to travel with a dynamic expedition team and visit some of the planet’s most remote and pristine places. These cruises are offered only by Lindblad Expeditions until 2040.
In addition, Lindblad Expeditions continues to deepen a collabortion with Disney to further enhance the marketing of these expedition cruises. Now is a great time to buy LIND as it continues expanding its niche and unique edge over other cruise lines.
Royal Caribbean (RCL)
With the largest cruise market share, Royal Caribbean (NYSE:RCL) is one of the most predominant cruise lines in the world. Royal Caribbean offers passengers a one-of-a-kind experience through an extensive list of onboard entertainment, such as Skydiving, Escape Rooms, Water Slides and Theater shows.
Royal Caribbean is reaping excellent benefits from surging demand. For the Q1 of this year, it reported $3.7 billion in revenue and $1.3 billion in operating cash flow. The momentum resulted in record bookings. Consequently, RCL raised its adjusted EPS guidance from $10.70 to $10.90 per share for 2024.
The cruise line is not just riding the current wave of momentum, though. With a series of smart investments, Royal Caribbean has a bright future ahead. The company has bought more ships to fuel a broader selection of trips and invested in ships driven by clean energy sources.
Therefore, Royal Caribbean stands as a giant in the cruise industry, showing no signs of slowing down this year. Investors should buy before the current wave washes away the opportunity.
On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
