Quarter after quarter starting in 2023, Carnival Corp., Royal Caribbean Group and Norwegian Cruise Line Holdings (NCLH) have each crowed about breaking one record or another. This calendar year, the cruise giants have taken turns smashing records for booking volumes and booked positions; two of them set records for pricing levels, and Carnival Corp. repeatedly broke records for customer deposits, net yields, net per diems and revenue.

For cruise sellers, the strength of the industry is good news. The sector’s robustness after the dreary days of the pandemic demonstrates that demand is strong, with cabins booking further out and commanding higher prices and subsequently bigger commissions. And the cruise lines aren’t resting on their laurels; this year they each put in large orders for shiny new ships and are improving or building private destinations, which are often guests’ highest-rated ports of call.

Meanwhile, in a good sign for the future, the industry is attracting a greater number of young people and first-time cruisers to their ships, cruise executives say.

With all this positive news for the industry, the big question is, how long can this momentum last?

What’s going right: bookings

This is the “golden era” for cruise lines, said Patrick Scholes, managing director of lodging and leisure equity research for Truist Securities. Not only is demand for cruising strong, but pricing is favorable compared with other modes of vacation, he said.

Other analysts agree that now is a good time for the cruise industry. Demand shows “zero signs of softening in any lead indicator,” like the booking curve, price or onboard spending, wrote Matthew Boss, J.P. Morgan’s head of leisure and retailing, in his September cruise report.

With nearly half of 2025 capacity booked as of September, booking curves for the world’s largest cruise companies have stretched about four months ahead of schedule, Boss wrote.

Typically, cruise lines would be 50% booked by the end of this year for 2025. Bookings now extend into 2026, with some as far out as 2027.

“Cruise is well positioned to continue to take share in the broader $1.9 [trillion] global vacation [market],” he wrote. “Looking ahead, we see the industry growing revenues by high-single digits over the next five years, capturing [about] 3.8% of the global vacation market by 2028.” Cruise executives have also pointed to growing multigenerational appeal, with younger people turning to cruise, expanding the market.

What’s going right: pricing

The cruise industry has also nestled itself into a consumer sweet spot when it comes to pricing compared to other vacations such as land-based resorts and theme parks.

The price gap has grown since the pandemic to at least 25% between cruises and land-based alternatives, Boss said. That’s up from the 10% to 15% pricing gap before the pandemic.

And while cruise executives have said they’d like to close that gap and that their sailings may be too much of a deal, it has spurred demand.

Beci Mahnken, owner of MEI-Travel in Issaquah, Wash., for instance, said some of her theme park clients have pivoted toward other vacation choices, like trips to Europe, a bucket-list vacation or trying out a cruise, as theme park ticket prices have risen.

Anthony Hamawy, president of Cruise.com, said cruise lines have positioned themselves well as a value proposition for families, especially ones sensitive to higher pricing from hotels, resorts and theme parks, which can run $300 to $700 a night without including meals.

“We always talk about value proposition, and it’s a [term] that’s been heavily used,” he said. “Overused, probably. But it really exists now more than ever when you look at what you’re getting on the cruise, and you’re comparing it to what you’re getting on one of these land [vacations].

“I think the cruise industry is in a really, really good spot.”

A lot of cruise line success is also related to the growth of onboard revenue on everything from specialty dining, WiFi packages, spa treatments, purchases on private destinations and other extras, Hamawy said. Some of this is because cruise lines have better mastered how to encourage guests to prebook onboard activities, which cruise companies say translates to a higher spend once that guest is onboard, he added.

Another element working in the industry’s favor is restrained capacity growth. The cruise sector historically had grown capacity by at least 6% annually. It is currently expected to increase capacity by about 2% annually for the next three years, thanks to a reluctance to order ships during the pandemic and the limited number of shipyards capable of building large vessels. The slower approach means the cruise lines have the leverage to keep prices high amid the strong demand and the limited supply they have.

Major cruise companies are collectively planning to build at least 40 new ships in the next 12 years.

Carnival Corp., which has six ships on order, plans to add one to two ships per year beginning in 2027. Royal is looking to roll out one Icon-class ship a year through at least 2027 plus another Oasis-class ship in 2028, and a Celebrity Edge-class ship is due in late 2025. NCLH has 13 ships on order across its three brands to be delivered by 2036, while Disney Cruise Line has four ships in the pipeline and is looking to build four more between 2027 and 2031. Viking has eight ocean ships scheduled to be delivered by 2029.

Cruise lines are also investing in their private islands, which routinely get the highest destination satisfaction scores among cruisers.

They offer what Hamawy called a “controlled Caribbean experience” with the food, drinks and exclusivity of being on a ship while enjoying a beach day. All the lines with private destinations have done work recently to spruce them up or build new ones. For instance, Royal Caribbean Group, which found great success with its Perfect Day at Coco Cay private island in the Bahamas, will build a second Perfect Day destination in Mexico near the Costa Maya cruise port. It is also building two new beach clubs and is planning a third.

Meanwhile, Disney Cruise Line just opened its second private destination this year, Lookout Cay at Lighthouse Point. And Carnival Corp. is building a new private destination for Carnival Cruise Line called Celebration Key.

Potential roadblocks

Although guests and cruise lines love new ships, too many too fast can lessen demand for other vessels in the fleet and lead to a loss of pricing power, Scholes said. There could come a day when the cruise industry is oversaturated with tonnage and private destinations, but he thinks we’re years away from that.

While noting that private destinations are a major part of cruising’s success, Scholes wonders whether in the long arc of time there will be a point of oversaturation.

“Being the cynic that I am, eventually the cruise lines will probably kill the golden goose by having too many ships and too many private islands,” he said.

Another threat would be a consumer slowdown, he said. Cruises are not immune to economic conditions and could suffer some on the margins, he said.

“If you see a real consumer slowdown, yeah, it certainly wouldn’t be positive for cruise lines, but they seem to have some resilience,” he said, adding that the fixed costs cruise companies have means that even if a company were to lose a couple percentage points of demand, it could hurt them financially.

Clayton Reid, MMGY Global’s executive chairman, is concerned that leisure travel demand is declining among consumers.

“I believe that the staggering amount of debt, the dramatic declines in savings, the intent levels to do longer-haul travel are dropping,” he said. Cruise won’t be hurt in the short term, he said, as much as outbound U.S. travel to Europe or the high-end luxury hotel industry.

But he expects it could become an issue for the cruise industry in 2026.

“You’ve got now more inventory available. You’ve got consumers on the leisure side who are pushing back on price and in some cases are not going to travel as much,” Reid said. “Especially with the big operators who are the big ships, who are adding inventory, they’ll have to, in my view, discount to keep demand and inventory occupancies high, whereas that hasn’t necessarily been the case in the last 24 months, nor the next 12.”

Other pitfalls could be incidents that lead to bad press, Scholes said.

For instance, after the 2012 Costa Concordia disaster, in which a ship capsized after crashing into rocks off the coast of Italy, the entire industry experienced a drop in business. Cruise got another black eye when Princess Cruises was fined $40 million in 2016 for illegally dumping oil-contaminated waste, which was followed by a $20 million fine in 2019 for parent company Carnival Corp.

And while some analysts said geopolitical conflicts are also a concern, with their mobile assets that can be repositioned, the cruise industry has successfully weathered conflicts currently plaguing parts of the globe.

For example, despite losing calls to St. Petersburg, Russia, (which former NCLH CEO Frank Del Rio considered a “crown jewel” of Baltic itineraries) when Russia launched a full-scale invasion of Ukraine in 2022, the cruise industry is still thriving today. Last year, the Palestinian militant group Hamas attacked Israel, which has led to an ongoing conflict and the absence of cruise calls in the region. However, cruise companies repositioned their ships and have since enjoyed record-breaking success.

It’s unclear what the future holds for the cruise industry. Few people could have predicted a global pandemic would happen and put cruising on life support. But barring a major economic downturn, the next Covid or some other black swan event, analysts say the industry looks solid right now. Advisors hope it stays that way.