The new year has just begun, and I'm starting a new investing journey on this first trading day of 2026. All year long, I'm planning to look at stocks that have escaped many investors' attention, both on Wall Street and here in the Motley Fool universe of stock recommendation services. My first stock for what I'm calling my Voyager Portfolio is Royal Caribbean Cruises (RCL 6.11%), as the cruise-line operator has impressed me with its comeback after many investors left it and its industry peers for dead during the early stages of the COVID-19 pandemic.
Articles in the coming days will drill down on Royal Caribbean's financial condition and its future prospects as a growth stock. Here, though, let's get better acquainted with the cruise industry and Royal Caribbean's part in it.
Image source: Getty Images.
Royal Caribbean and its opportunity in the cruise industry
Travelers worldwide have historically made cruise ships a popular way to see the sights . With cruise ships offering a wide array of dining and entertainment options on their way to appealing onshore destinations, many travelers enjoy the all-inclusive nature of cruise travel. In 2019, nearly 30 million passengers globally booked passage on cruise ships across the industry, according to figures from the Cruise Lines International Association (CLIA).
The pandemic caused the suspension of commercial cruise operations across the globe. CLIA estimates put the economic damage in just the first six months of the pandemic at $77 billion, including $23 billion in lost wages and over half a million jobs lost. In the U.S., passenger counts bottomed out in 2021 at 2.17 million, down nearly 85% from the 14.2 million American passengers that boarded cruise ships two years earlier.
However, despite immense hardship both financially and operationally, many cruise ship operators were able to obtain the financing they needed to get through tough times and survive until national governments lifted pandemic-era restrictions on travel. By 2023, the number of cruise passengers had surpassed pre-pandemic numbers, and the most recent statistics indicate nearly 35 million people took a cruise in 2024. Of those, 20.5 million launched from North American ports, showing the importance of having a significant base of operations that includes destinations across the U.S., Canada, Mexico, Central America, and the Caribbean.
NYSE: RCL
Key Data Points
How Royal Caribbean has become a leader among cruise stocks
Royal Caribbean stands out among its peers as one of the most successful cruise operations in the world. The company owns and operates three global brands: Celebrity Cruises, Silversea Cruises, and its namesake Royal Caribbean. The company also has a one-half interest in its TUI Cruises joint venture, which operates TUI and Hapag-Lloyd Cruises out of Germany. All combined, Royal Caribbean and TUI had a combined fleet of 68 ships as of the company's most recent annual report, with spots for nearly 167,000 passengers.
Royal Caribbean's voyages typically run from three to 14 nights, while its Celebrity and Silversea brands sometimes offer extended itineraries that can nearly double that length. You'll find top destinations on Royal Caribbean's schedule, including the Caribbean, Alaska, Canada, Europe, and the Asia-Pacific rim. The company serves more than 1,000 ports on all seven continents, with the Silversea line offering an expedition approach that includes exotic itineraries such as Antarctica and the Arctic Ocean.
In the aftermath of the pandemic, Royal Caribbean has redefined its customer strategy. The company still hopes to woo travelers to come back for repeat voyages through a wide range of incentives that are common in the hospitality industry. However, the importance of health and safety has risen dramatically, particularly in light of the highly publicized COVID-19 outbreak on the Diamond Princess cruise ship early in 2020.
Setting the stage for strong stock gains
It's easy to understand how Royal Caribbean's history set it up for a dramatic uptick as the pandemic ran its course. However, that story alone doesn't explain the cruise operator's gain of over 280% in the past five years. For that, the next article in this three-part series on Royal Caribbean will focus on the company's financial statements and how it managed to weather one of the worst periods in the industry's history.
