Cruise ship stocks are ownership in companies that run cruise ships and transport passengers to their destinations while offering comfort and entertainment along the way.
Three companies own about 75% of the market share: Royal Caribbean, Carnival and Norwegian. The first two pay dividends to shareholders.
How to invest in the cruise ship sector
There are several ways you can get your feet wet with cruise line investing. You can buy shares of individual cruise stocks. Or you can purchase shares of an ETF that invests in multiple cruise ship stocks and possibly other stocks in the travel industry. Here’s how to start:
Choose a stock trading platform. You have plenty to choose from, so be sure to compare your options to find the one that works best for you.
Open your account. Be ready with your ID, Social Security number and bank account information.
Fund your account. You’ll need to transfer money to your brokerage account before you can start investing. Some platforms let you start with as little as $1.
Search for stocks. Look up stocks by ticker symbol or use a stock screener to filter the types you’re interested in.
Place an order. Once you’ve found an investment you want, specify how much of it you wish to purchase and submit your order.
Monitor your investments. Track the performance of your portfolio by logging on to your account.
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Top Cruise Ship Stocks
Finder’s investments experts analyze all S&P 500-listed stocks to curate a list of the best performing stocks. The companies are ranked in average order of both their year-to-date and month-over-month performance.
What ETFs track the Cruise Ship sector?
You can also invest in ETFs that hold cruise ship stocks along with equities from companies in other industries. Here are some to consider:
The First Trust Consumer Discretionary AlphaDEX Fund (FXD)
Cruise stocks tend to perform best when the economy is healthy and people have disposable income to spend on travel. Cruising is one of the fastest-growing corners of the leisure travel industry, and demand has climbed back past its pre-pandemic peak to record levels — helped by high repeat-booking rates and a wave of younger, first-time cruisers entering the market.
A few features make the sector stand out:
A concentrated market. Three companies — Royal Caribbean, Carnival and Norwegian — control roughly three-quarters of the global market, giving the largest operators scale and pricing power.
Recurring demand. The large majority of cruisers say they intend to sail again, and cruise lines increasingly market multi-generational, expedition and luxury trips that widen their customer base.
Improving balance sheets. After borrowing heavily to survive the pandemic shutdown, the major lines have been paying down debt and, in some cases, restoring dividends and earning credit-rating upgrades.
High operating leverage. Because a ship is largely a fixed cost, filling cabins at higher prices can translate into outsized profit growth when demand is strong.
The trade-off is that these dynamics work in reverse, too. Cruising is a discretionary purchase, so downturns in the economy or the wider travel industry can send cruise stocks sharply lower.
What unique risks does the cruise ship sector face?
Cruising carries a set of risks that set it apart from most other consumer stocks:
Heavy debt. The major operators took on billions in debt to weather the pandemic. They’ve been steadily reducing it, but large interest and refinancing obligations still weigh on earnings.
Economic sensitivity. A cruise is a discretionary expense. When household budgets tighten, bookings and onboard spending are among the first things travelers cut back on.
Fuel and cost exposure. Ships consume enormous amounts of fuel, so spikes in energy prices can quickly erode margins. The sector also leans on a wide web of other industries, including food and beverage, hospitality and logistics.
Tax and regulatory scrutiny. The big US-based operators are incorporated overseas — in countries such as Liberia, Panama and the Bahamas — and are largely exempt from US corporate income tax. That structure periodically draws political attention and calls to change it, which can rattle share prices even when no legislation is ultimately passed.
Environmental rules. Tightening emissions standards, carbon pricing and rising port fees, particularly in Europe, add to costs, and some popular destinations are capping or taxing cruise visits amid concerns about overtourism.
Health and safety events. Disease outbreaks can trigger cancellations, itinerary changes or, as the pandemic showed, industry-wide shutdowns. Negative publicity from any onboard incident can also dent demand.
Weather and geopolitics. Hurricanes, storms and geopolitical flashpoints can force costly itinerary changes and ship redeployments at short notice.
Few pure plays. With only a handful of listed cruise operators, there’s limited room to diversify within the theme itself.
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The cruise industry has moved well beyond its pandemic low point. Passenger numbers are at record highs, demand is strong and the major lines are rebuilding their balance sheets — a very different backdrop from a few years ago. Even so, these are cyclical, debt-heavy businesses that depend on discretionary spending and remain exposed to fuel costs, regulation, taxation and geopolitical headlines.
Whether that reads as an opportunity or a risk depends on your goals and risk tolerance. As with any sector, it’s worth researching each company’s finances, valuation and dividend policy, and thinking about how a cruise position fits alongside the rest of your portfolio. To get started, you’ll need a brokerage account, after which you can buy shares of individual cruise lines or gain exposure through a travel-focused ETF. Finder isn’t a financial advisor, so consider speaking with a licensed professional before investing.
Frequently asked questions
A small number of companies dominate the industry. Royal Caribbean, Carnival and Norwegian together control roughly three-quarters of the global cruise market, and many of the cruise line brands you'll recognize are subsidiaries of one of these three parent companies rather than separately listed stocks.
Some do. Royal Caribbean and Carnival have historically paid dividends and have moved to restore shareholder payouts as their finances recover, while Norwegian doesn't currently pay one. Dividend policies can change as a company's financial position shifts, so check the latest information before investing.
Yes. There's no large pure-play cruise ETF, but many consumer-discretionary and broad travel ETFs and mutual funds hold cruise stocks as part of a wider basket. Bear in mind that cruise lines usually make up only a small fraction of these funds, so your exposure to the sector may be limited.
Most major operators register their companies and ships in countries such as Liberia, Panama and the Bahamas — often called flags of convenience. This can reduce their tax burden and give them more flexibility on labor and operating rules, though it also means they're periodically targeted by proposals to make them pay more US tax.
Royal Caribbean (RCL), Carnival (CCL) and Norwegian Cruise Line Holdings (NCLH) are the three largest US-listed operators. Smaller listed options include Viking Holdings (VIK), which spans ocean and river cruises, and Lindblad Expeditions (LIND), which focuses on expedition travel.
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Javier Simon is a freelance finance writer at Finder and a certified educator in personal finance (CEPF).
He’s featured on NerdWallet, Bankrate, Yahoo Finance and Fox Business, where he’s shared his expertise on personal finance topics, such as investing, retirement planning, taxes, budgeting and savings.
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Javier holds a bachelor’s degree in multimedia journalism from SUNY Plattsburgh.
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