All ashore who's going ashore!
The travel industry has been on the upswing since the dark days of the Covid-19 pandemic and that trend seems poised to continue.
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A recent Deloitte survey found that more travelers planned to raise their holiday travel budgets from the prior-year level. And among those, 40% said they would do so because “travel has become more important to me since the pandemic.”
The report said affordability was often the biggest barrier to travel, noting that “either a hit to consumer confidence or persistent high prices could challenge travel demand in the coming year.”
About one in five Americans surveyed said they had opted out of a trip they wanted to take due to the high cost of flights or lodging, Deloitte said.
The report also warned of the Trump administration’s tariffs and deportations of undocumented workers, which could result in staffing shortages.
The cruise industry has been growing steadily, according to Cruise Lines International Association's state-of-the-industry report, which was issued in May.
Cruise is small but ‘dynamic' part of tourism sector
Bud Darr, the association's president and CEO, said in a statement that cruising “continues to be one of the most dynamic and resilient sectors in tourism, growing in line with strong demand for cruise holidays, particularly among younger generations and new-to-cruise travelers.”
Cruise travel earns higher satisfaction ratings compared with other holiday choices, the report said. That's shown in repeat factors – 25% of repeat cruisers sail two or more times per year; 14% cruise twice a year; and 11% take three to five cruises a year.
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Expedition and exploration cruises are the fastest-growing segments of cruise, with 22% more passengers choosing these voyages in 2024 over 2023.
Forty-two million people — roughly the population of France — are forecast to sail in 2028, up 21% from 34.6 million last year.
And the report said cruising has plenty of room for growth, since it is currently only 2.7% of the international travel and tourism sector.
Several investment firms have been reviewing the cruise industry and issued research reports on some of the top companies.
TD Cowen initiated coverage of both Carnival (CCL) with a buy rating and $36 price target and Norwegian Cruise Line (NCLH) , which got a buy rating and $31 target.
Carnival shares are up 20% this year and up 62% from a year ago, while Norwegian stock has slipped nearly 10% in 2025 and are up 18% from a year ago.
Analyst calls cruise lines underappreciated
The investment firm also initiated coverage of Royal Caribbean (RCL) with a buy rating and $405 price target. The company’s shares are up 51% this year and have more than doubled (up 107%) from a year ago.
TD Cowen's analysts called the cruise lines “underappreciated” share gainers in the travel space, according to The Fly.
The cruise names offer a strong value proposition, which will drive long-term share gains, the firm said.
TD estimates annual revenue growth of 7% for the industry through 2029. It views Carnival as an industry leader with an opportunity to widen profit margins.
Citi raised its price target on Carnival to $37 from $30 and affirmed a buy rating on the shares. It lifted its target on Norwegian to $30 from $25 and maintained a buy rating.
The investment firm says “better-than-ever” demand and lower-than-historical supply growth are setting up a favorable pricing environment that could last much longer than investors expect. Citi says recent data show improving trends in May through July.
The firm replaced Royal Caribbean with Carnival on its Focus List.
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Truist analyst C. Patrick Scholes downgraded Royal Caribbean to hold from buy with a price target of $337, up from $275.
Scholes said that he has observed a bounce-back in bookings since April's pullback. But when he averages March-through-early-July's bookings compared with a year earlier, the demand pace is up only low-to-mid-single digits percent, off from the high-teens monthly pace that 2024 averaged, the analyst said.
Norwegian Cruise Line is scheduled to report second-quarter results July 31, while Royal Caribbean is slated to report July 29.
For the fiscal first half ended May 31, Carnival swung to net income of 37 cents a share from a loss of a dime a share in the year-earlier half. Revenue rose 8.5% to $12.14 billion.
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