It's not fair to say that all cruise lines are in the same boat. Carnival (CCL 0.88%) (CUK 1.11%), Royal Caribbean (RCL 0.74%), and Norwegian Cruise Line Holdings (NCLH -0.52%) have all suspended operations since March, and they aren't expected to resume the bulk of their operations until at least a couple of months into 2021.

Travel stocks in general have been bad bets for investors in 2021, and cruise line stocks are among the industry's biggest losers. There are just three major publicly traded players, but they're not all built the same. Let's rank them from best to worst in terms of investing potential for the year ahead.

A passenger zip-lining in Labadee with a Royal Caribbean cruise ship in the background.

Image source: Royal Caribbean.

1. Royal Caribbean

Shares of Royal Caribbean have fallen 45% in 2020 as we head into the final two trading weeks of the year. If you think that's bad, check the competition. Carnival and Norwegian Cruise Line have both taken a 57% hit this year. I warned you that cruise line stocks had some ugly year-to-date performances. 

Royal Caribbean is the second largest cruise line operator. Being the silver medalist in terms of size may not seem like a winning recipe for the best-performing cruise line stock, but there are a lot of advantages that Royal Caribbean has over its underperforming peers. 

We can start with margins. Royal Caribbean has historically been able to command higher markups for its cruises, and this means that it will have the easiest path back to profitability when the industry starts sailing again. Every cruise line may argue that it has the most loyal customer base, but Royal Caribbean can quantify the devotion. When cruise lines began to offer passengers on canceled sailings the choice of cash refunds or 125% in the form of future cruise credits, Royal Caribbean had the largest percentage of customers push their payments into 2021 and 2022 voyages. 

Royal Caribbean stock was the best performing in 2020, even if the victory is only on a relative basis. It should repeat the feat in 2021 as it leads the way back to revenue-generating cruises. 

Concept art for the rollercoaster on the top deck of the Carnival Mardi Gras ship.

Image source: Carnival.

2. Carnival

Right now there isn't much of an advantage to being the world's largest cruise line operator. Its monthly cash-burn rate of $530 million is more than the money being squandered at Royal Caribbean and Norwegian Cruise Line combined. Carnival's namesake brand also is magnetic to first-time cruisers given its entry-level pricing, and that's one segment of the market that is going to be a hard draw when the industry is sailing again in 2021. The headlines were pretty brutal with all of the COVID-19 outbreaks that took place on cramped cruise ships this year.

You still shouldn't bet against Carnival. It has raised more money than its two rivals combined. It has retired a few vessels, but they were its less productive ships. There are also economies of scale here, and the $20.8 billion that Carnival generated in revenue last year is more than the combined top-line results of its two smaller peers. 

Carnival doesn't get top honors here because Royal Caribbean's margins and passenger fandom are stronger. However, Carnival will be in the best positive to market its product when it's time to turn on the marketing spigot again. 

A stateroom on the NCL Jewel.

Image source: Norwegian Cruise Line.

3. Norwegian Cruise Line

I've been hard on Norwegian Cruise Line this year, and ranking it third in a three-dog race may seem like another insult. The company has seen its share count and long-term debt increase 26% and 73%, respectively, through the first nine months of this year, and that's not bueno. Its larger rivals have pumped their debt loads by more, but no one has done its future per-share profitability more harm during the lull than Norwegian Cruise Line with all of the new shares printed in 2020.

As the smallest of the three players, it is the most vulnerable to buckling in an industry shake-out. If we're not sailing on cruise ships by the end of next year, you're kidding yourself if you think all three players would survive nearly two years of disruption. In that grim scenario, you'd be hard-pressed to argue that Norwegian Cruise Line wouldn't be the first to capitulate. 

However, even if Norwegian keeps extending its cancellations (the latest nixing pushes out its restart until March), favorable news on the vaccine front may make some of the strict measures that Norwegian Cruise Line and Royal Caribbean agreed to this fall moot. Cruise lines may be sailing at full capacity soon if the pandemic is tackled early in 2021, and all of the players will be smarter and leaner after months of fine-tuning their businesses. Norwegian Cruise Line is third on this list, but that doesn't mean that it's going to be a bad investment. Royal Caribbean is this year's best performer, and obviously losing nearly half of its value in a single year is not a good look. 

It's quite possible that 2021 is a bull market for cruise line stocks, even if the general market doesn't play along. I still rank the three stocks as Royal Caribbean first, Carnival second, and Norwegian Cruise Line third, but all three will outperform the overall market if the cruise industry recovers in the year ahead.