Cruise Ships
Description
Companies in this industry operate deep sea, inland, and coastal/Great Lakes cruise ships. Major companies in the deep sea cruise segment, which accounts for about 95% of industry revenue, include Carnival, Disney, Norwegian Cruise Line, and Royal Caribbean Cruises (all headquartered in the US); major operators based outside of the US include Color Line of Color Group (Norway), and Viking Line (Finland).
Top cruise destinations include the Caribbean, the Mediterranean, North America's West Coast, South America, and Alaska. Cruise is forecast to grow about 42 million passengers by 2028, according to the 2025 State of the Cruise Industry Report by Cruise Lines International Association (CLIA).
The US cruise ship industry includes about 500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $25 billion.
COMPETITIVE LANDSCAPE
Demand for cruises is driven by consumer disposable income and vacation preferences. Small operators have the competitive advantage of lower labor and equipment costs and more personalized service; large operators benefit from stronger bargaining power in vendor contracting, the ability to spread costs over a larger number of passengers, and greater financial resources for marketing, expansion, and investment. The US deep sea cruise segment is highly concentrated: the four largest companies generate more than 95% of segment revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
The industry revenue is comprised of sales from entertainment and shopping facilities as well as passenger ticket sales. Many cruise lines offer all-inclusive packages in which the costs of food, beverages, and standard services are incorporated into ticket prices. Other revenue sources include casino gaming, retail shops, and premium services such as luxury spa treatments.
The industry includes companies that sail large ships to ports around the world and companies that sail smaller ships in the Great Lakes and along inland and coastal waterways. Some small and medium-sized companies that operate luxury yachts and mid-sized ships offer a variety of inland, coastal, and deep sea cruises. Large deep sea cruise companies may own multiple cruise lines that target different demographics and offer a variety of options. For example, Disney Cruises are more casual and tailored to families with children, while Princess Cruises target adults with spa services and other luxury offerings.
Cruise ship amenities often include formal and casual dining facilities, health clubs, pools, live entertainment, casinos, nightclubs, restaurants, retail stores, laundry and room service, ice skating rinks, and public lounging and sightseeing areas. Large cruise ships may carry about 3,000 to 5,000 passengers. Coastal cruise ships usually hold 200 or fewer. Average cruise length regardless of ship size is six to eight days, but most cruise companies offer trips ranging from two to 14 days. Transatlantic and transpacific cruises may be longer.
Coastal and Great Lakes cruise companies tend to operate smaller ships and turn passengers' focus more toward shore excursions than onboard features, which are typically limited to cabins, dining rooms, libraries, and sightseeing decks. Coastal and inland cruise companies typically operate a single ship, but may offer multiple routes and stop at varying ports. A niche offering, luxury yacht cruises tout both the cruising experience and opportunities for shore excursions. Luxury lines tend to sail to exotic destinations with ports that are often inaccessible to large ships.
Cruise brands are generally characterized as contemporary, premium, or luxury. Cruises with a contemporary format are typically casual and relatively inexpensive excursions on large ships, lasting about a week or less. Premium cruises, which generally cater to older, more affluent travelers, are often one to two weeks on mid-sized ships. They emphasize style and comfort, focus more on destinations, and are priced higher than contemporary cruises. Luxury cruises, the highest-priced tier, typically run on small ships and focus on accommodations, service, and exotic destinations.
Cruise lines often contract for the use of port facilities, fuel, maintenance, and services. Carnival operates cruise port facilities in the US and numerous other countries and is involved with the development and enhancement of ports. In addition to port operations, large cruise companies may own interests in shipbuilding and repair facilities.
Storms and natural impediments can affect cruise routes and schedules. Hurricanes and flooding can damage ports; long-term damage, like that sustained at the port of New Orleans, forces cruise companies to move base operations to other ports. Dredging of waterways and ports may also be required after storms or the natural movement of silt and other debris in inland waterways. Cruises in the Great Lakes are seasonal, due to surface water freezing.
Top cruise destinations include the Caribbean, the Mediterranean, North America's West Coast, South America, and Alaska. Cruise is forecast to grow about 42 million passengers by 2028, according to the 2025 State of the Cruise Industry Report by Cruise Lines International Association (CLIA).
The US cruise ship industry includes about 500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $25 billion.
COMPETITIVE LANDSCAPE
Demand for cruises is driven by consumer disposable income and vacation preferences. Small operators have the competitive advantage of lower labor and equipment costs and more personalized service; large operators benefit from stronger bargaining power in vendor contracting, the ability to spread costs over a larger number of passengers, and greater financial resources for marketing, expansion, and investment. The US deep sea cruise segment is highly concentrated: the four largest companies generate more than 95% of segment revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
The industry revenue is comprised of sales from entertainment and shopping facilities as well as passenger ticket sales. Many cruise lines offer all-inclusive packages in which the costs of food, beverages, and standard services are incorporated into ticket prices. Other revenue sources include casino gaming, retail shops, and premium services such as luxury spa treatments.
The industry includes companies that sail large ships to ports around the world and companies that sail smaller ships in the Great Lakes and along inland and coastal waterways. Some small and medium-sized companies that operate luxury yachts and mid-sized ships offer a variety of inland, coastal, and deep sea cruises. Large deep sea cruise companies may own multiple cruise lines that target different demographics and offer a variety of options. For example, Disney Cruises are more casual and tailored to families with children, while Princess Cruises target adults with spa services and other luxury offerings.
Cruise ship amenities often include formal and casual dining facilities, health clubs, pools, live entertainment, casinos, nightclubs, restaurants, retail stores, laundry and room service, ice skating rinks, and public lounging and sightseeing areas. Large cruise ships may carry about 3,000 to 5,000 passengers. Coastal cruise ships usually hold 200 or fewer. Average cruise length regardless of ship size is six to eight days, but most cruise companies offer trips ranging from two to 14 days. Transatlantic and transpacific cruises may be longer.
Coastal and Great Lakes cruise companies tend to operate smaller ships and turn passengers' focus more toward shore excursions than onboard features, which are typically limited to cabins, dining rooms, libraries, and sightseeing decks. Coastal and inland cruise companies typically operate a single ship, but may offer multiple routes and stop at varying ports. A niche offering, luxury yacht cruises tout both the cruising experience and opportunities for shore excursions. Luxury lines tend to sail to exotic destinations with ports that are often inaccessible to large ships.
Cruise brands are generally characterized as contemporary, premium, or luxury. Cruises with a contemporary format are typically casual and relatively inexpensive excursions on large ships, lasting about a week or less. Premium cruises, which generally cater to older, more affluent travelers, are often one to two weeks on mid-sized ships. They emphasize style and comfort, focus more on destinations, and are priced higher than contemporary cruises. Luxury cruises, the highest-priced tier, typically run on small ships and focus on accommodations, service, and exotic destinations.
Cruise lines often contract for the use of port facilities, fuel, maintenance, and services. Carnival operates cruise port facilities in the US and numerous other countries and is involved with the development and enhancement of ports. In addition to port operations, large cruise companies may own interests in shipbuilding and repair facilities.
Storms and natural impediments can affect cruise routes and schedules. Hurricanes and flooding can damage ports; long-term damage, like that sustained at the port of New Orleans, forces cruise companies to move base operations to other ports. Dredging of waterways and ports may also be required after storms or the natural movement of silt and other debris in inland waterways. Cruises in the Great Lakes are seasonal, due to surface water freezing.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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