Investing in Cruise Stocks

Following the worst days of the pandemic, cruise stocks have staged a recovery, benefitting from robust demand for travel. In this article, we’ll take a look at the 2 top cruise line stocks, examine the recovery from their pandemic lows and compare their investment prospects!

The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.

Investing in Cruise Line Companies

Cruise line stocks were amongst the worst affected industries during the pandemic.  

Following the US Centers for Disease Control and Prevention’s (CDC) no-sail order on 14 March 2020, cruise ships didn’t operate for more than a year.  

With revenue plummeting, cruise companies posted multi-billion-dollar losses and were forced to take on large amounts of debt to remain operational and maintain their fleets. 

However, once social restrictions were removed, demand for cruises soared and major cruise lines have subsequently returned to profit. In 2025, cruise demand remains strong, but it should be noted that the cruise industry, along with travel in general, tends to be very cyclical. 

In other words, demand for cruising generally fluctuates according to the health of the economy. Consequently, ongoing economic uncertainty could dampen cruise demand in the future.

The 2 Top Cruise Stocks

The cruise line industry is dominated by two main players: Royal Caribbean and Carnival. Between them, these two titans account for almost 70% of total cruise passengers and more than 60% of total market revenue. 

Of the two, Carnival carries significantly more passengers (around 40% of the market total) and generates more revenue. However, Royal Caribbean is more than twice the size of Carnival in terms of market capitalisation.

But which one is the better investment? Let’s take a look at these two cruise stocks in more detail.

Royal Caribbean

Royal Caribbean is the world’s largest cruise company in terms of market cap. It fully owns Royal Caribbean International, Celebrity Cruises and Silversea Cruises; it also owns a 50% stake in TUI Cruises.

Like other cruise companies, Royal Caribbean shares collapsed at the outset of the pandemic. However, its recovery has been fairly remarkable.

The table below highlights key metrics from Royal Caribbean’s annual reports from 2019 to 2024, demonstrating its pandemic struggles and its subsequent recovery.

Source: Royal Caribbean Group – SEC Filings 

Despite plummeting during the pandemic, revenue recovered significantly in 2022 and continued strong demand helped Royal Caribbean return to annual profit in 2023. 

Accordingly, since its pandemic low, share price has soared more than 1,200% and, as of the beginning of October 2025, shares were trading at more than double their pre-pandemic high (please note that past performance is not a reliable indicator of future results). 

In 2024, Royal Caribbean reinstated its dividend which it had suspended at the outbreak of the pandemic, which highlights the fact that future dividends are never guaranteed. At the time of writing, 17 October 2025, the cruise stock has a dividend yield of 0.8%.

Carnival Corporation

Carnival Corporation is the second largest cruise company in terms of market capitalisation, but it is the largest in terms of revenue. 

The company owns eight cruise brands:

• AIDA Cruises 
• Carnival Cruise Line 
• Costa Cruises 
• Cunard 
• Holland America Line 
• P&O Cruises 
• Princess Cruises 
• Seabourn 

Unlike Royal Caribbean, Carnival has been slower to recover from the effects of the pandemic. In fact, its share price currently trades significantly lower than its pre-pandemic high.

Whereas Royal Caribbean returned to annual profit in 2023, it took Carnival an extra year to achieve this milestone. Again, we have highlighted some of the key metrics from Carnival’s annual reports between 2019 and 2024 in the table below. 

Source: Carnival Corporation – Latest Results

Although Carnival achieved an operating profit in 2023, high interest expenses resulted in a net loss, with the cruise company reporting an annual profit in 2024.

However, whilst revenue and operating income was reported higher in 2024 than its pre-pandemic 2019 levels, net income remained lower, reflective of significantly higher interest expenses.

Carnival also suspended its dividend payments in the wake of the pandemic, however, it has yet to reinstate payouts.

Royal Caribbean vs Carnival

The first thing you might be wondering upon reading the last section is why Royal Caribbean has recovered more strongly since the worst days of the pandemic.

Whilst operating costs have risen considerably for both companies, Royal Caribbean offers a more premium product and, consequently, has higher pricing power than Carnival.

Therefore, Royal Caribbean has been able to offset higher costs more effectively by raising prices, resulting in significantly higher profit margins than Carnival. Royal Caribbean’s decision to reinstate its dividend in 2024 was also a well-received show of confidence in its underlying business. 

Another factor to bear in mind is debt. Both cruise line stocks were forced to borrow significantly to survive during the pandemic. Whilst both companies have made progress in reducing their burdens, Carnival’s initial borrowing was significantly heavier, and its debt levels remain higher. 

At the end of its fiscal Q3 2025, Carnival’s total debt stood at $27 billion, giving it a debt-to-equity ratio of 2.3. At the end of Q2 2025, Royal Caribbean’s total debt was $19.5 billion, and its debt-to-equity ratio was slightly lower at 2.1. 

In terms of valuation, following its strong stock market performance, Royal Caribbean currently trades at around 23 times earnings. That's considerably higher than Carnival’s price to earnings ratio of 14; however, both trade at lower levels than the wider S&P 500. 

However, it’s important to remember that cruising is a highly cyclical industry. Ongoing economic uncertainty or a potential downturn could hamper demand for cruises and, consequently, negatively impact one or both of these cruise stocks.

How to Invest in Cruise Line Stocks

In order to invest in the cruise stocks examined in this article, investors can follow these steps: 

• Register for an Invest.MT5 account and log in to the Dashboard. 
• Click ‘Invest’ next to your account details to open the trading platform. 
• Search for the cruise line company you want to invest in and open the instrument page. 
• Enter the number of cruise shares you wish to purchase and press ‘Place Order’. 

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