The cruise line industry has become increasingly intriguing to investors. Despite concerns about the sluggish economy, travelers continue to fill cabins, prompting these companies to build more ships.
These dynamics also highlight the differences between the world's second-largest cruise line by passenger volume, Royal Caribbean (RCL 7.00%), and Viking Holdings (VIK 6.75%), a smaller line that has attracted interest with a vastly different approach to cruising.
Knowing that, which travel stock holds a greater potential to drive investor returns?
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The case for Royal Caribbean
Royal Caribbean has stood out for its large size and offering a more upscale approach than Carnival. This has been so successful that Royal Caribbean is the largest cruise line stock, as measured by market cap.
Moreover, occupancy averaged almost 110% in 2025. Investors should note that the industry defines 100% occupancy as two people in every cabin. Such strong demand led to new ships in each of the last two years, with four additional ones coming online by 2029.
Furthermore, it also had the highest seven booking weeks in its history. More advanced bookings mean it has to discount less to fill cabins, which increases profits. That factor led to $18 billion in revenue in 2025, an 8% yearly increase.
Additionally, Royal Caribbean stock may not fully reflect that gain, as it rose by around 20% over the last year. Also, at a P/E ratio of 19, it could attract more investor interest as it continues to sail smoothly amid economic uncertainty.
NYSE: RCL
Key Data Points
Why investors might consider Viking
In contrast, Viking has succeeded with smaller ships offering fewer frills. Upscale travelers have turned to the cruise line, as it offers child-free experiences, longer stays in port, and vacations that emphasize learning and experiences. This approach means it claims more than 4% of industry revenue despite carrying less than 1% of passengers.
Not surprisingly, its 2025 ship occupancy rate was 96%, a strong number considering it strictly limits cabins to a maximum of two passengers. Such successes have prompted it to set a goal of launching 27 more river ships by 2028 and 10 other ocean ships by 2031. To put that into perspective, it currently sails approximately 90 river ships and 12 ocean ships.
Amid that success and rapid expansion, Viking earned more than $6.5 billion in revenue in 2025, up 22% from year-ago levels. Consequently, investors are buying its stock, which only began trading in the spring of 2024. Over the last year, it is up nearly 55%.
That has also led to a P/E ratio of 35, much higher than Royal Caribbean's but not far above the S&P 500 (^GSPC 1.52%) average of 30. Given the cruise line's growth rate, that is a valuation that could probably still attract investor interest.
NYSE: VIK
Key Data Points
Royal Caribbean or Viking?
Ultimately, investors can likely win with either stock, but given the state of their businesses, Viking is likely the more appealing choice.
Admittedly, investors will have to pay a premium for Viking stock. Nonetheless, its ability to attract more revenue per passenger and the cruise line's aggressive expansion are indicative of its potential for faster growth. Additionally, its higher-income clientele makes it the most recession-resistant cruise line, making it the most likely stock to meet growth expectations.
