The rough seas are starting to swell for the cruising industry, but that isn't stopping market leader Carnival
Fatter distributions and ambitious share buybacks are nice, but the industry is growing weary of its domestic growth prospects. Too many ships in the Caribbean have forced the lines to discount their fares just to fill their ships. Things aren't necessarily better on the other coast, where Norwegian Cruse Lines (NCL) recently announced that it would be deploying its U.S.-flagged Pride of Hawai'i vessel to Europe next year.
Growth abroad will likely drive the fortunes of Carnival, NCL, and Royal Caribbean
Carnival is currently deriving 70% of its revenues from ships that leave from North American ports. That number will shrink to 60% at Carnival over the next four years. No, the stateside market isn't going to collapse. However, a dozen of the 20 new ships that Carnival will add through 2010 will be for its European brands. That's substantial, especially given that the vast majority of its 80-ship fleet currently serves the U.S. tourist market.
Expanding abroad can be a good thing. Motley Fool Stock Advisor selection Disney
This should be good news for Rule Breakers pick Steiner Leisure
The potential is there. We live in a world with so much water on the surface. It's good to see many of the North American specialists delve deeper.
Longtime Fool contributor Rick Munarriz realizes that growing up in South Florida makes him think that cruise ships a natural and economical way to get around, but he thinks everyone should try one of these ships once. He does not own shares in any of the companies in this story, save for Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.