The cruise industry's darkest days appear to be behind it. With surging demand for leisure travel and strategic moves by major players, the sector is entering a phase of steady growth.

Leading the charge are Carnival Corporation & plc (CCL Quick QuoteCCL - Free Report) , Royal Caribbean Cruises Ltd. (RCL Quick QuoteRCL - Free Report) and Norwegian Cruise Line Holdings (NCLH Quick QuoteNCLH - Free Report) . These companies have consistently demonstrated their strength by achieving record-breaking revenues and profitability. In 2024, full-year revenues reached unprecedented heights, driven by robust demand and strategic pricing initiatives.

As travelers increasingly prioritize experiences over material goods, cruise operators are well-positioned to capitalize on a mix of loyal returning customers and first-time cruisers. Strategic investments in fleet modernization and innovative offerings further bolster the industry’s growth trajectory as it sails confidently into 2025.

Strategic Initiatives Propel Growth

Cruise operators are implementing targeted strategies to enhance efficiency and reduce costs while maintaining exceptional guest experiences. These measures aim to boost margins and rebuild profitability across the sector.

Key players are ramping up investments in fleet upgrades, unveiling new ships equipped with luxurious accommodations, cutting-edge dining experiences, and diverse entertainment options. This focus on innovation is designed to attract younger travelers, families and premium clientele.

Additionally, operators are refining their approaches to onboard spending, a critical driver of profitability. From pre-cruise purchases to exclusive onboard experiences, these revenues reflect both consumer confidence and financial health. Companies are leveraging digital marketing, search engine optimization and user-friendly booking platforms to boost pre-cruise sales and foster customer engagement.

Sustainability also remains at the forefront, with cruise lines adopting alternative fuels, energy-efficient technologies and eco-friendly practices. These efforts align with global environmental goals and resonate with eco-conscious travelers, a growing demographic in the tourism sector.

A Promising Road Ahead for the Cruise Industry

Following a strong performance in 2024, the cruise industry is well-positioned for another exceptional year in 2025. Companies are investing in advanced revenue management tools to effectively leverage technology and optimize yields. One of the key growth opportunities lies in increasing onboard spending, particularly through pre-cruise purchases, which often lead to higher spending during the cruise itself. With ongoing investments and a focus on enhancing these efforts, the industry is set for continued expansion.

There is considerable headroom moving forward, as consumers are expected to pay more for the cruise experiences offered, not just in comparison to competitors within the cruise sector but also when considering the unique value cruises offer versus land-based vacation alternatives.

The momentum heading into 2025 is already clear, with advanced bookings reflecting strong demand. Per the report, the cruise industry is projected to surpass 37 million passengers globally in 2025, with market revenue expected to grow by 10% year over year.

Per Statista, the global cruises market is projected to grow at an annual rate of 4.81% CAGR (2024-2029), reaching $53.49 billion in revenue by 2029. The number of users is expected to rise to 46.57 million, with user penetration increasing from 0.44% to 0.58% during this period. The average revenue per user (ARPU) is estimated at $1,230, and online sales are forecasted to contribute 24% of total revenue by 2029. The United States will likely dominate the market, driven by strong demand for luxury cruises.

For investors, the cruise industry’s resilience and growth trajectory make it a compelling segment to watch in 2025 and beyond. Additionally, the Zacks Leisure and Recreation Services industry ranked in the top 10% of all Zacks industries, suggesting further upside potential for the sector.

3 Cruise Stocks to Watch Out For

Given the backdrop, here are three cruise stocks that are likely to move higher in 2025. With the help of the Zacks Stock Screener, we have selected stocks that carry a Zacks Rank #2 (Buy). NCLH, CCL and RCL remain top contenders for investors looking to capitalize on the industry’s upward trajectory. These companies are well-positioned to continue delivering strong financial results and driving innovation, ensuring smooth sailing into the future.

Stock Price Performance

Image Source: Zacks Investment Research

Carnival is well-positioned for long-term growth, supported by robust revenues from record bookings, higher ticket prices and increased onboard spending. The company has made significant strides in cost management, improving operating margins despite inflationary pressures. Strategic investments in fleet modernization, eco-friendly technologies and enhanced guest experiences have bolstered its appeal to a broader customer base. With advanced bookings for 2025 exceeding historical averages and a favorable industry outlook, Carnival is poised to capitalize on the growing demand for experiential travel.

CCL — currently carrying a Zacks Rank #2 — has gained 36.2% over the past year compared with the industry’s 19.8% growth. The 2025 EPS estimate has increased to $1.89 from $2.03 over the past 60 days. Earnings for 2025 are expected to grow 16.7% year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Royal Caribbean is setting the stage for another promising year in 2025, with several exciting developments on the horizon. The company anticipates a 5% capacity increase, driven by introducing two ships: Star of the Seas in third-quarter 2024 and Celebrity Xcel in fourth-quarter 2024.

The Caribbean region remains a key focus, with capacity projected to grow 5%, making up 57% of Royal Caribbean’s deployment. Other notable regions include Europe, which will account for 15% of capacity, followed by the Asia-Pacific at 11% and Alaska at 6%.

Encouragingly, booking trends for 2025 align with historical patterns, with load factors remaining strong and at elevated price points. While dry dock days will increase to support fleet modernization, disciplined cost management continues to support margin expansion and cash flow growth, positioning Royal Caribbean for continued success.

RCL — currently carrying a Zacks Rank #2 — has gained 85.5% over the past year. The 2025 EPS estimate has increased to $13.55 from $14.42 over the past 60 days. Earnings for 2025 are expected to grow 23.8% year over year.

Norwegian Cruise is likely to benefit from high consumer interest, particularly in its luxury and premium segments. It continues to see impressive growth in onboard revenues and pre-booked bookings, reflecting sustained confidence in the cruise industry. NCLH's efforts to reduce costs and enhance operational efficiency are paying off, with significant margin improvements. Its continued fleet growth, including new, high-end ships, positions the company for success.

NCLH — currently carrying a Zacks Rank #2 — has gained 24.7% over the past year. The 2025 EPS estimate has increased to $1.92 from $2.05 over the past 60 days. Earnings for 2025 are expected to grow 25.4% year over year.