After a long stretch of growth, US travel agents surveyed by Morgan Stanley this month reported weakening cruise bookings — suppressed by the government shutdown, elevated inflation and Hurricane Melissa.
Industry figures are hopeful this is a blip rather than the beginning of a trend. “Enthusiasm for cruising remains high”, says analyst Jamie Rollo, “[but] some consumers are adopting a wait-and-see attitude and booking later.”
One of the biggest factors attracting new guests, particularly younger passengers, is the perception of value.
The so-called discount on the cost of a night on a cruise ship versus one in a holiday resort is wider today than it was in 2019. That is partly a function of timing: hotels returned to normality from Covid sooner, and were therefore able to begin increasing their prices before cruise ships, which faced heavy restrictions from the US Centers for Disease Control until July 2022.
Revenues per cruise passenger were up 24 per cent on 2019 in the second quarter of 2025, according to company reports and figures from analytics group STR collated by Barclays Research. Resort rates in the US, meanwhile, climbed 34 per cent in the same period, while rooms in the Caribbean were up 59 per cent.
Cruise operators have been “marketing into that [gap]”, says Barclays analyst Brandt Montour. Lower prices were, at least initially, “a way to get our consumers back to cruising”, says Gianni Onorato, chief executive of the privately held Swiss-Italian operator MSC Cruises.
Value was certainly a factor for Caitlin Nixon, a 28-year-old data analyst from the UK, who took her first cruise with her husband last December. They paid £4,500, including flights, for an all-inclusive two-week trip in the Caribbean on Tui’s Marella line.
“We wanted to go see a part of the world that we hadn’t explored yet and liked the idea of getting to experience a taste of each place rather than spending the same amount to visit only one,” she says. “We found a good deal about a year in advance in a sale and decided to just take the chance that we’d enjoy it.”
Staffing is a significant factor behind cruise liners’ ability to offer lower costs. More than half of global cruise passengers are Americans, but cruises do not have to recruit locally and can access specialised seafarer work permits, which typically cost less than hiring or bringing overseas workers into a country such as the US.
The big operators do not share precise figures, but analysts say the industry recruits heavily from low-income countries such as the Philippines and Indonesia, and has been shielded from much of the wage inflation that has hit hospitality in the US and Europe.
“They’re competing with resorts, which have increased prices due to higher labour costs,” says Montour. “Cruise lines benefit from lower operating costs by drawing on labour from a global pool.”
These cheaper labour costs have also enabled cruise operators to maintain, or even improve, their pre-pandemic service levels, says William Blair’s Zackfia. “Contrast that with land-based hotels [where] there were some compromises made in 2020 — like ending turndown service — that may have continued.”
That perceived value has also helped the industry remain buoyant at a time of rising insecurity, as consumers seek all-inclusive packages where they can predict “exactly what they’re going to pay”, says Jan Freitag, an analyst at real estate information company CoStar.
Cruise operators have an additional incentive for targeting younger passengers. “They’re really trying to capture customers early [because] there’s a tremendous amount of brand loyalty within the industry,” says Bob Levinstein, chief executive of online broker CruiseCompete. “If Royal Caribbean can get you in as a young adult, that’s a long-term investment.”
Nixon, for one, is hooked on Tui’s Marella. “We’d definitely go again and definitely with them,” she says.
The pandemic “was a blessing as much as it was a curse”, says Goldman Sachs analyst Lizzie Dove. “For the first time ever [ . . . ] you couldn’t physically cruise so they finally had a chance to strategise and start over.” That included everything from overhauling cruise lines’ digital booking platforms to rethinking ship design and building more flexible itineraries.
The vessels themselves have also been growing over time to accommodate more passengers and more amenities. The size of the world’s largest cruise ships has doubled since 2000. With a gross tonnage of about 250,000, Royal Caribbean’s Icon of the Seas, which launched in 2024, is five times heavier than the Titanic.
Operators have started deploying these newer, larger ships on short-haul voyages. Royal Caribbean in August sent its megaship Wonder of the Seas on three- and four-night cruises in the Bahamas from Miami. Rivals are replicating this strategy: Carnival in August said it would begin offering short-haul sailings from Port Canaveral onboard its third-largest ship, the Mardi Gras, for the first time from 2027.
These shorter routes are particularly important for first-time cruisers who fear “risking their whole vacation”, says Dove. They also help attract “working professionals [who] have the money but are very time poor”, says Anna Nash, head of MSC’s luxury cruise division Explora Journeys.
