Cruises are more popular than ever—and investors are late to the party

livemint.com:

Still looking for an amazing deal on a cruise? Four years after Covid-19 shut the industry down, a brief golden age of uncrowded decks and deep discounts has come to an end. With ships sailing at capacity and prime cabins selling out quickly, grabbing an offer as the industry’s traditional “wave season" winds down this month might be wise. Investors are in more luck than travelers: Even though the lowest prices are off the table, bargains remain available in the shares of cruise lines—especially for those not put off by a bit of choppiness.

“Wave season" is the term for the window of time at the beginning of the year when the cruise industry offers its best rates. During 2023’s season, executives were all but shouting to Wall Street that they were seeing monster demand. Analysts were slow to take the hint: More than two-thirds of those covering industry giant Carnival, for example, rated its stock a “sell" or “hold" early last year.

Its shares, along with Royal Caribbean and Norwegian Cruise Line Holdings, were the top three performers in the S&P 500 during the second quarter of 2023. Since then, though, only Royal Caribbean has been able to keep rallying, coming close to erasing its pandemic losses. The other two are still down by more than half.

Further gains look likely for all three as anecdotes trickle in about what is shaping up to be the industry’s best wave season ever. “The wind is behind their sails—pun intended," says Michael Erstad, a senior analyst covering the consumer sector at research firm M Science. Cruises have long been affordable compared with land-based alternatives.