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Why cruises are booming as air travel slumps

April 30, 2025
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Why cruises are booming as air travel slumps
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Roal Caribbean Wonder of the seas
Despite a downturn in parts of the travel industry this year, cruise lines like Royal Caribbean and Carnival are still seeing booming demand.

Esther Carlstone

The cruise industry is proving uniquely resilient as the travel industry navigates rocky economic waters and airlines prepare to trim their schedules as demand sinks.

Cruise giants Carnival and Royal Caribbean reported strong first-quarter earnings and said they’ll boost capacity this year amid ever-growing demand for vacations at sea — many of which can be budget-friendly getaways.

The same can’t be said for airlines. Only one, United, has provided any financial guidance for the rest of 2025, warning a recession could dent profits by a third.

Across the board, US air carriers plan to slash their flight schedules as demand for domestic tickets weakens, international visitors avoid the United States, and government travel evaporates.

Travel analyst Henry Hardevelt of Atmosphere Research Group told Business Insider that cruise lines’ saving grace is their diversified customer base, large exposure to international markets, and far-out bookings.

“Cruises are so extensive in the assortment of brands and itineraries and the variety of cabins available on these ships,” he said. “They can appeal to a very broad mix of travelers.”

The all-inclusive nature of cruises can help customers manage their budgets, and people can board from all corners of the world — not just in the US.

Huge bets initiated years ago on amenities, like massive new ships and private resorts that keep the cruise-ship experience (and dollars) flowing on land, have also helped the cruise industry guard against what airlines have experienced this year.

Cruises attract a broad array of customers

Cruise lines’ diverse fleet and itineraries help give them an edge.

Some boats are small and quaint, with luxury spas and sushi restaurants. Others are so massive, with rollercoasters and go-kart tracks, that you can’t possibly do everything in one week.

Companies like Virgin offer adult-only sailings, Norwegian Cruise Lines offers solo cabins, and Viking Ocean Cruises forgoes casinos.

Pricing varies, too. Celebrity Cruises focuses on luxury with expensive cabins to match, for example. Carnival and MSC offer sailings for a few hundred dollars, including a stop at a private island.

two Royal Caribbean cruise ships docked at Perfect Day at CocoCay
The majority of Royal Caribbean’s Caribbean cruises stop at its private island, Perfect Day at CocoCay.

Brittany Chang/Business Insider

Hardevelt said this diversification can help cruisers control their budgets without sacrificing the fun. For example, they could ditch the drink package or excursions to save money and stick to the included accommodations, shows, and food.

This can make cruising more affordable, a main draw for people feeling more cash-strapped. The costs for flights, hotels, and everything in between for an à la carte vacation to places like Orlando or Las Vegas can quickly add up.

“Cruising is truly an example of an industry where there is something for almost everyone available,” Hardevelt said. “This is why I think people prioritize it.”

That’s not to say airlines aren’t diversified to cushion against a downturn. American, Delta, and United reported strong premium cabin demand through the summer, especially for long-haul flights.

Cruises have a larger global footprint

Cruise lines like Carnival and Royal Caribbean operate worldwide in Europe, Australia, Asia, and beyond, opening vast market opportunities across geographically different itineraries.

Royal Caribbean CEO Jason Liberty said on Tuesday that the company’s “nimble and flexible sourcing model” can attract “quality demand from all over the globe.”

In contrast, US airlines largely pull demand from the Americas. In recent earnings, American Airlines, Delta Air Lines, and United Airlines said that 75% to 80% of their international revenue originates in the US.

United Polaris business class.
Strong summer demand for expensive business class seats is padding US airlines’ bottom line.

Nicolas Economou/NurPhoto via Getty Images

Decreased bookings from Canada and Europe have forced airlines to reduce capacity this year. Hardevelt said cruise lines aren’t as vulnerable to these changing habits.

“There may be Canadians who don’t want to sail out of a US port, so they may fly to Mexico, for example, if there is a cruise they like that is available to board there,” he said.

He added that airlines may still benefit from booming cruise demand, as many cruisers travel by air to their embarkation port.

However, airplanes are just the vessel to get there: “Few people get on a plane for the sake of getting on a plane; cruising is the vacation.”

People can book cruise itineraries years out

Airlines typically only allow bookings about 11 months out, with most people buying tickets 90 days before the flight, making flying a relative short-term decision.

Cruises, on the other hand, can generally be booked 18 to 24 months in advance, allowing some flexibility to cancel if a recession hits.

For example, if someone today decides to book a cruise for mid-2026 and puts a deposit down, it may be months or longer before they fully pay for it.

people in the pool and on the deck on Carnival Firenze
Future cruise bookings remain strong, and people can still find deals on sailings.

Brittany Chang/Business Insider

They may choose to wait out the uncertainty period of 2025 before canceling, and they may even be able to get their deposit refunded if they do decide to.

Hardevelt noted, however, that people keeping their cruises on the books for now amid a potential recession could skew forecasts.

“As cruise companies look at their forward bookings, they can certainly say activity looks good,” he said. “But if the economy is substantially derailed, some of those bookings could very well disappear.”

The post Why cruises are booming as air travel slumps appeared first on Business Insider.

Tags: adult-only sailingairlinecruisecruise linedemand sinkexamplefar-out bookingflight schedulehardeveltitinerarymonthPeoplerecessionunitedyear
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