U.S. Cruise Companies Surge 45% in 6 Months as 'Modern-Day Noah's Arks' Gain Popularity

Ahead of the U.S. vacation season, cruise companies' share prices are surging to all-time highs.
Royal Caribbean Cruises hit an all-time high of $316.37 in early July, and Carnival Cruise reached a 52-week high of $26.10.
Bernstein raised its target price for Royal Caribbean from $290 to $360, saying, "Cruises have evolved into high-quality compounding growth stocks."
Market dominance and growth outlook
In the U.S. cruise market, Carnival (42%), Royal Caribbean (20%) and Norwegian (10%) form the Big 3, controlling about 80% of the entire market.
According to Nester Research, the market, worth 9 billion dollars in 2023, is expected to exceed 23 billion dollars by 2036.
Carnival's recovery after the pandemic was somewhat slower because of its large brand portfolio, but Royal Caribbean, with its focused strategy, showed a quick recovery in profitability and a bigger rise in its share price.
Differentiators
Royal Caribbean's new Icon-class ships are on the scale of a modern-day Noah's Ark, able to carry up to 7,600 people.
In 2019, it invested 250 million dollars in CocoCay, a private island in the Bahamas, which it operates as an exclusive resort for its customers.
Younger travelers and technological innovation
The average age of cruise travelers fell from 49.1 in 2021 to 45.4 in 2023, and last year, travelers under 40 outnumbered those 40 and over.
A partnership with Elon Musk's Starlink provides high-speed internet even at sea, accelerating the influx of younger travelers.
Value for money and investment outlook
The basic 4-night, 5-day Miami–Bahamas package costs $358 (about 500,000 won) per person, drawing attention as an affordable vacation option even during an economic downturn.
Wall Street generally views the outlook for the cruise industry, led by Royal Caribbean, positively, and expects it to sail on as a centerpiece of U.S. vacation-season spending in 2025 as well.