Cruise Industry Rebounds: Carnival & Royal Caribbean Lead with High Occupancy Rates
The cruise industry is bouncing back, with Carnival and Royal Caribbean leading the way. Both companies have high occupancy rates, with Carnival at 112% and Royal Caribbean at 110%. Despite the challenges posed by the pandemic, they have added ships to their fleets to meet demand.
Carnival, with around 42% of all passenger traffic, and Royal Caribbean, with 27%, dominate the market. Despite losing billions during the pandemic and resorting to debt financing, both companies have managed to recover. Carnival ended Q3 with $26.5 billion in total debt, down from $28.9 billion the previous year. Royal Caribbean, with a lower debt-to-equity ratio of 2.0 compared to Carnival's 2.2, ended the quarter with $19 billion in debt, down from $21.1 billion.
Royal Caribbean has reinstated and raised its dividend three times since 2024, with a current yield of around 1%. This is notable as no other major company is known to have resumed a dividend that was suspended during the COVID-19 pandemic in that year. Carnival, however, does not pay a dividend. Despite this, both companies have seen strong demand, with Carnival's 2026 bookings exceeding its capacity.
Carnival and Royal Caribbean, the top two cruise companies, have shown remarkable resilience in the face of the pandemic. With high occupancy rates and increasing demand, they continue to lead the industry's recovery. Their ability to manage debt and adapt to changing circumstances has been crucial in their success.
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