Polar Cruises. Orion Expedition Cruises. Cruise lines operating ocean and river ships can be found in both lists. Retrieved 26 June Classic International Cruises. The fund gives bond investors an added element of security. Plantours Kreuzfahrten.
We will drive environmental improvements across our cruise operations
Carbon emissions and air pollution from sulphur and nitrogen particles and other fine particulate matter pose environmental ingest for the cruise industry. We are constantly improving the environmental performance of our fleet by investing in new, more fuel-efficient ships. In the past year we achieved a further 6. Cruiee ongoing programme of refits to existing ships and investment in new-build vessels that deploy the latest environmental technologies helped achieve. Improvements in waste and fresh water per cruise passenger night were achieved as part of the fleet renewal process and use of enhanced water desalination facilities across the cruise businesses. Its sister ship, the new Mein Schiff 2, entered imdustry fleet in February Two further new-build ships using cleaner liquefied natural gas will be delivered in and
Market projected to grow 6.53% annually between 2018 and 2022
If you’re interested in gaining exposure to the global vacation industry but want to venture beyond the traditional hotel, airline, and travel booking giants, then cruise line stocks might be just what you’re looking for. Cruises enjoy the same benefits from positive long-term trends shaping the wider luxury travel industry, including economic growth and rising incomes, but cruise ships aren’t as susceptible to competition from smaller rivals and the industry economics are more favorable than in the airline space. But there are a few factors investors should know about the cruise ship business before they begin buying stocks in the sector. Below, we’ll take a comprehensive look at the industry, the biggest cruise line operators, and the metrics that matter most to a cruising business. Arming yourself with everything you need to make smart decisions about riding the cruise line wave will help you grow your money and diversify your portfolio.
If you’re interested in gaining exposure to the global vacation industry but want to venture beyond the traditional hotel, airline, and travel booking giants, then cruise line stocks might be just what you’re looking. Cruises enjoy the same benefits from positive long-term trends shaping the wider luxury travel industry, including economic growth and rising incomes, but cruise ships aren’t as susceptible to competition from smaller rivals and invrst industry economics are more favorable than in the airline space.
But there are a few factors investors should know about the cruise ship business before they begin buying stocks in the sector. Below, we’ll take a comprehensive look at the industry, the biggest cruise line operators, and the metrics that matter most to a cruising business.
Arming yourself with everything you need to make smart decisions about riding the cruise line wave will help you grow your money and diversify your portfolio. Cruise lines are part of the travel and vacation industry, which means they compete with each other, and also with land-based hotels and resorts.
The cruise industry only covers a small subset of that huge annual spending pie, but it has several characteristics that support unusually strong and profitable growth, including high customer satisfaction. Cruise guests typically rate their vacation experiences more positively compared to land-based hotel trips.
Some of the benefits that cruisers cite are stress-free travel to several destinations without invrst to pack and unpack and inveet peace of mind that comes with all-inclusive bookings that cover food, lodging, and entertainment. There are many tiers of cruising options, ranging from value to premium to ultra luxury, but the industry’s most popular trip categories tend to cater to a wide range of demographics and income levels. Ships are packed with onboard entertainment for kids and for adults, food choices that span from pizza by the pool to premium restaurant table service, and cabin offerings ranging from sparse, windowless rooms to expansive suites with wraparound decks.
But the total bill can reach many multiples of that price if you opt for the bigger stateroom, nicer invesy, and the more luxurious ships in the fleet. Other characteristics that set cruise trips apart from traditional hotel-based vacations include a competitive value proposition and the fact that ships, by virtue of their mobility, can change itineraries or move to different launch cities as demand changes.
A hotel company doesn’t have that flexibility. Most cruise companies believe that metric is good news since it points to a invvest runway for potential growth both in developed markets like the U. The global industry carried roughly 26 million guests in compared to 24 million in and 23 million in An investment in this niche starts with the assumption that these numbers will continue climbing over the long term even if recessions briefly send them lower.
Let’s take a closer look at each of these companies. Berth is a measure of capacity reflecting double-occupancy cabins. Figures are for the fiscal year.
Carnival is by far the industry’s largest player, with its ships accounting for roughly half of the world’s berths, or cruise cabin capacity. The company operates 25 vessels in its core Carnival brand that typically run vacations lasting between three and eight days, mainly to the Caribbean from U. Carnival owns several other cruise franchises, including Princess Cruises, Holland America, and the ultra-luxury Seabourn.
It services many of the same destinations and home ports as Carnival, and its biggest terminal is in Miami, Florida. The company pays out a dividend that translates into a 2. With 25 ships indusstry 50, berths, Norwegian Cruise Line is a distant third place in terms of annual guest capacity. But its relatively small footprint makes it the fastest-growing cruise operator, as its plans to introduce nine ijdustry ships over the next few years should lift its berth level to 72, These vessels tend to target more premium segments of the market with some services, like a day trip, that only smaller cruise operators can provide.
Cruising, like any vacation activity, is highly dependent on overall economic growth. As a discretionary purchase, it’s one of the first things that a consumer cuts back on during tough times. Thus, the industry tends to do well during expansions, while growth slows or turns negative during recessionary periods. According to Carnival, two demographic groups are key to the industry’s long-term growth.
The baby boomer generation of folks in or near retirement tend to take cruises as a convenient all-in-one vacation package. Meanwhile, the younger and fast-growing millennial demographic also has a positive view of the industry. The key variables that feed into sales growth and profitability include ticket prices, ticket nidustry, and cruise costs. At the most basic infest, a cruise line’s annual earnings simply reflect the difference between cruise expenses and the income the company receives from guests.
Ideal operating environments, like the ones cruise lines saw in fiscal throughinvolve rising demand and higher average pricing, with both metrics outpacing the growth in cruise costs like fuel, food, and labor. There’s a finite global demand for cruise trips each year, and if capacity outstrips that figure, then profitability could suffer.
One of the key challenges for any cruise business investt taking the right approach toward expanding its fleet. Compounding this problem is the fact that it takes several years, and lots of capital, to deliver a new ship.
Industry conditions can change significantly over that time. A cruise line that overestimates demand will have to cut prices to keep ships running near capacity. If they miss on the down side, it will have to turn away guests and forfeit all the revenue that would have come from the sale of that ticket, and the add ons that traveler might have purchased invfst on board. The cruise giants have flexibility when it comes to juicing demand. They each offer a loyalty program that aims to make the most out of repeat vacationers.
The companies run pricing promotions, particularly for dates in the distant future, so they can secure that booking volume. Cruise companies are constantly remodeling and upgrading ships to keep up with shifting consumer trends. Recent additions in the Carnival fleet include new water slides and better onboard internet capabilities, and Royal Caribbean is pouring millions of dollars into building a new state-of-the-art terminal in Miami.
The key growth metric in the industry is net revenue yield, which describes the change in revenue per average room per day after stripping out the impact of foreign currency moves. The metric is similar to the revenue per available room, cruisf RevPARwhich is used in the hotel industry. Net revenue yield includes any change in occupancy levels, ticket prices, and onboard spending, and so it represents the single best way to judge whether a cruise operator is delivering more value to its guests and translating that success into higher sales.
Net revenue yield combines with capacity expansion to produce essentially all of a cruise line’s growth potential. Publicly traded cruise lines report expenses to investors in the line item called «net cruise costs,» which includes the costs of everything it takes to deliver a cruise experience, from food to labor to security.
It is often reported both with and without fuel because, while an important part of its expenses, swings in fuel prices can cloud the earnings picture. The gap between net revenue yield and cruise costs tells an investor how profitable a cruise line is, and whether that profitability is rising or falling over time. Cruise line stocks all publish their return on invested capitalwhich is a key measure of efficiency for any business.
Since these companies have to direct lots of cash toward long-term investments like new ships and fleet upgrades, this cruiwe is critical for evaluating management’s capital allocation skills. It’s also worth keeping an eye on leverage, since the cruise ship business is capital intensive, meaning industry participants typically carry lots of debt. If these liabilities cruisee too high, then earnings could suffer under the weight of hefty interest expenses. Ultimately, the entire business could be threatened if a cruise giant enters into a cyclical downturn while also cruies with an overwhelming debt load.
More generally, investors will see cruise companies use terms that aren’t specific to its industry, including the following:. Fiscal year: This is the company’s definition of a year that’s comprised of four quarters. A fiscal year is roughly the same length but usually differs in start and end time from the actual calendar year.
Booking volume: This refers to the number of tickets ordered in a given period. While invest in cruise industry count is backward-looking, booking volume gives a glimpse of future demand for trips that haven’t yet taken place. Dividend yield: Most cruise companies pay a steady dividend and the dividend yield refers to the amount of cash payment invfst share as a percentage of the stock’s price.
Investors invsst reinvest these dividends back into the cruise stock to grow their position. The single biggest risk to investing in a cruise line stock is tied to economic downturns, because a weakening economy causes demand for vacations to fall, leading to smaller sales volumes, lower booking volume, and reduced ticket prices. Cruise giants have a bit more flexibility here than a regional land-based hotels does since they can relocate vessels to areas of the world that are growing more quickly.
However, they’re still exposed to economic slumps, especially in the U. The cruise business is also highly susceptible to extreme weather events, particularly the hurricanes that hit the Caribbean industrj late summer. The occasional strike from one of these powerful storms can produce minor write-offs, as cruises are canceled or cut short.
But widespread damage to ports, like what occurred in the wake of ‘s hurricane season, threatens bigger disruptions that could last several years. Demand for Caribbean cruises fell after the devastation of that hurricane season and still haven’t fully recovered as of early Fuel costs make up a significant portion of a cruise trip’s overall cost, and that fact means cruise companies are susceptible to big swings in fuel prices, just as airlines are.
A sustained surge in the cost of oil will crimp profitability in the short term, at least until the company can offset it over time through rising ticket prices.
Another risk worth watching is the niche status of the industry as a. Therefore, a big part of the investing thesis relies on these companies finding ways to boost demand for this vacation option beyond what they’ve been able to accomplish to date.
Finally, a critical difference between a cruise and a land-based hotel is that guest health is a heightened concern during a cruise experience. Vessels are traversing open sea, after all, and so the risk of a crusie casualty event is always present. Meanwhile, cruise ships, by virtue of their tight contained spaces, can quickly spread public health outbreaks of viruses.
Any outbreak event or loss of life on a cruise vessel would hurt the business and could threaten the growth rate of the wider industry if ceuise causes vacationers to question the safety of this trip option. A few notable recent incidents include an engine fire on a Carnival ship in that cut power for several days so that guests had to eat rations and endure reduced toilet access.
The company had just a few months earlier faced a flu-type virus outbreak on a different ship that sickened hundreds of guests. Carnival’s stock suffered short-term pullbacks during the immediate aftermath of these events, but neither one impacted its broader growth rate. The cruise ship industry isn’t large enough to offer broadly diversified investing options such as index funds or exchange-traded funds ETFsso investors who want exposure to the sector must choose among the public companies.
Carnival is the industry leader and so it benefits from scale advantages unmatched by rivals — including a bigger advertising budget and a more flexible fleet. The cruise giant has enjoyed record operating results in each of the last three fiscal years.
Royal Caribbean has enjoyed healthy pricing and volume growth inand anticipates to be another record year. As for Norwegian Cruise Line, its smaller footprint and lack of a dividend make it a different kind of investment than Carnival and Royal Caribbean.
Cruise ship stock valuations are highly vulnerable to changing investor predictions about economic downturns. Recently, spiking concerns about a potential recession have produced attractive discounts for the shares. All three management teams have predicted another record operating year in Whether cruise giants bounce back quickly depends on where global growth rates end up, compared to the expansion rate of industry capacity.
Over the long term, Carnival, Royal Caribbean, and Norwegian Cruise Line stocks each appear well positioned to benefit from rising global vacation demand. The ingest years of, and demonstrated that cruise stocks can generate robust earnings growth during boom times, and these gains could accelerate as the companies find more ways to satisfy their guests with unforgettable vacation experiences.
Yes, their businesses will certainly take steps backward during cyclical downturns, just as its hotel and airline peers. Assuming the cruise ship experience continues to attract world travelers, there should be room for the industry’s biggest players to significantly expand their businesses in the insustry decades.
That would produce fertile ground for solid investor returns — assuming you’re willing to hold on through the inevitable ups and downs of owning shares of a business that has shifting fortunes, ebbing invest in cruise industry flowing with the wider iin tides.
Cruise Ship Industry
Norwegian Capricorn Line. Company Profiles. The following is a list of defunct ocean cruise line with their shipping line is still in service. Pandaw River Expeditions. Iceland ProCruises. The positive results also topped Wall Street earnings expectations for the 10th consecutive quarter. Carnival, which trades at about 11 times earnings, operates as a global cruise company, operating more than ships. Viking Ocean Cruises. Lawler Partners. Login Newsletters. Orthodox Cruise Company. Travel Brand of the Year [13]. Arctic cruises with nuclear icebreaker 50 Let Pobedy. Nanhai Cruises [8]. Jalesh Cruises. Induztry Cruises. Hidden categories: All articles with dead external links Articles with dead external links from Invesg
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