We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Carnival's Destination Strategy Power a New Phase of Yield Growth?
Read MoreHide Full Article
Key Takeaways
CCL is scaling its Paradise Collection to drive pricing power, conversion and per-passenger revenues.
CCL is optimistic about the Celebration Key opening, backed by strong early bookings.
CCL expects FY25 net yields to rise 5.6% over FY24, fueled by enhanced land-based experiences.
Carnival Corporation & plc (CCL - Free Report) is doubling down on a high-margin, experience-led strategy by investing heavily in exclusive Caribbean destinations to unlock additional revenue streams. The cruise giant has been steadily building out its portfolio of exclusive private island destinations, positioning the assets as growth accelerators capable of lifting yields and deepening guest engagement.
At the center of this strategy is Celebration Key, a 275,000-square-foot lagoon destination set to open in July. Built to house the world’s largest swim-up bar and most expansive sandcastle attraction, Celebration Key has already become one of the most Googled cruise destinations. Carnival is deploying targeted marketing spend behind the destination, aiming to drive both brand heat and yield premiums. Early booking trends are encouraging, with pricing in line with management’s expectations.
Carnival also plans to expand other Caribbean properties under its “Paradise Collection,” including RelaxAway (Half Moon Cay) and Isla Tropicale (Mahogany Bay). These destinations are being enhanced to support higher guest throughput, improved infrastructure and elevated experiences, paving the path for increased revenue per passenger.
By leveraging unique land-based assets and extending its advanced booking window, the company is creating opportunities to drive consumer conversion, optimize pricing and extract more value from each guest. In an environment where capacity growth remains measured, these assets offer an efficient lever for improving returns.
With over 2 million annual visitors expected across these properties, the downstream impact on yield and per-passenger spend could be meaningful. In fiscal 2025, Carnival expects net yields (in constant currency) to be approximately 5.6% higher than 2024 levels.
How It Stacks Up to Competitors
Royal Caribbean Cruises Ltd. (RCL - Free Report) has long embraced a destination-first strategy and continues to double down with its expanding portfolio. Over 70% of Royal Caribbean’s Caribbean itineraries already include a stop at a private destination, and that number is expected to climb to 90% by 2027. The company’s Perfect Day series remains a powerful lever for driving higher average per diems (APDs) and elevated onboard revenues. In 2025, Royal Caribbean is guiding for yield growth in the range of 2.6-4.6%, underpinned by destination-led pricing strength and favorable mix.
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) is also building out its destination infrastructure, with a focus on elevating Great Stirrup Cay, its private island in the Bahamas. Norwegian Cruise expects to more than double Great Stirrup Cay’s capacity by 2026, from roughly 400,000 to over 1 million annual guests. These enhancements, including resort-style pools, family zones, exclusive beach clubs and upgraded transportation, are designed to support stronger onboard monetization and yield lift. For 2025, Norwegian Cruise is guiding net yield growth in the 2-3% range, supported by disciplined pricing, improved onboard spend and expanded Caribbean deployment.
CCL’s Price Performance, Valuation & Estimates
Shares of Carnival have rallied 49.5% in the past three months compared with the industry’s growth of 26.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, CCL trades at a forward price-to-earnings ratio of 13.82X, significantly below the industry’s average of 19.68X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CCL’s fiscal 2025 and 2026 earnings implies a year-over-year uptick of 38% and 13.4%, respectively. The EPS estimates for fiscal 2025 and 2026 have increased in the past 30 days.
Image: Bigstock
Can Carnival's Destination Strategy Power a New Phase of Yield Growth?
Key Takeaways
Carnival Corporation & plc (CCL - Free Report) is doubling down on a high-margin, experience-led strategy by investing heavily in exclusive Caribbean destinations to unlock additional revenue streams. The cruise giant has been steadily building out its portfolio of exclusive private island destinations, positioning the assets as growth accelerators capable of lifting yields and deepening guest engagement.
At the center of this strategy is Celebration Key, a 275,000-square-foot lagoon destination set to open in July. Built to house the world’s largest swim-up bar and most expansive sandcastle attraction, Celebration Key has already become one of the most Googled cruise destinations. Carnival is deploying targeted marketing spend behind the destination, aiming to drive both brand heat and yield premiums. Early booking trends are encouraging, with pricing in line with management’s expectations.
Carnival also plans to expand other Caribbean properties under its “Paradise Collection,” including RelaxAway (Half Moon Cay) and Isla Tropicale (Mahogany Bay). These destinations are being enhanced to support higher guest throughput, improved infrastructure and elevated experiences, paving the path for increased revenue per passenger.
By leveraging unique land-based assets and extending its advanced booking window, the company is creating opportunities to drive consumer conversion, optimize pricing and extract more value from each guest. In an environment where capacity growth remains measured, these assets offer an efficient lever for improving returns.
With over 2 million annual visitors expected across these properties, the downstream impact on yield and per-passenger spend could be meaningful. In fiscal 2025, Carnival expects net yields (in constant currency) to be approximately 5.6% higher than 2024 levels.
How It Stacks Up to Competitors
Royal Caribbean Cruises Ltd. (RCL - Free Report) has long embraced a destination-first strategy and continues to double down with its expanding portfolio. Over 70% of Royal Caribbean’s Caribbean itineraries already include a stop at a private destination, and that number is expected to climb to 90% by 2027. The company’s Perfect Day series remains a powerful lever for driving higher average per diems (APDs) and elevated onboard revenues. In 2025, Royal Caribbean is guiding for yield growth in the range of 2.6-4.6%, underpinned by destination-led pricing strength and favorable mix.
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) is also building out its destination infrastructure, with a focus on elevating Great Stirrup Cay, its private island in the Bahamas. Norwegian Cruise expects to more than double Great Stirrup Cay’s capacity by 2026, from roughly 400,000 to over 1 million annual guests. These enhancements, including resort-style pools, family zones, exclusive beach clubs and upgraded transportation, are designed to support stronger onboard monetization and yield lift. For 2025, Norwegian Cruise is guiding net yield growth in the 2-3% range, supported by disciplined pricing, improved onboard spend and expanded Caribbean deployment.
CCL’s Price Performance, Valuation & Estimates
Shares of Carnival have rallied 49.5% in the past three months compared with the industry’s growth of 26.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, CCL trades at a forward price-to-earnings ratio of 13.82X, significantly below the industry’s average of 19.68X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CCL’s fiscal 2025 and 2026 earnings implies a year-over-year uptick of 38% and 13.4%, respectively. The EPS estimates for fiscal 2025 and 2026 have increased in the past 30 days.
Image Source: Zacks Investment Research
CCL stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.