The f-cking cruises are coming back.

Dagnamit. I was hoping we'd be done with these disturbing monstrosities. Talk about ruining it for everyone else...each time these giant blights on humanity hit their next port.

Couldn't they do the honorable thing and go out of business? Better still, put Bill in charge.

All aboard!

Chart R

So, the headline is that cruises are back.

Indeed, cruise tourism is expected to make a titanic comeback this year, with passenger volumes forecast to exceed pre-pandemic levels by 6% — increasing at an even faster rate than overall international tourist arrivals in 2023, which are only estimated to have returned to 80-95% of the number of voyagers seen in 2019.

Since travel restrictions have phased out, it appears that vacationers are rushing to try out their sea legs. Despite the dip in cruise passengers, as nightmare scenarios played out on Covid-stricken stranded cruise liners around the world, the public’s enthusiasm for vacationing on the high seas clearly runs deep. Estimates from the CLIA see the number of ocean-going cruise passengers reaching nearly 40 million per year by the end of 2027.

Indeed, this summer appears to have been a bumper season for the industry. Operator Global Ports Holdings, which claims to be the world's largest cruise port operator, revealed almost 2x as many passengers across its network in the three months to June 30, translating to a quarterly revenue increase of 60%.

Furthermore, the largest cruise operators in the world are showing little problem filling the rooms on their increasingly enormous fleets. Royal Caribbean experienced record-breaking demand for its new flagship Icon of the Seas — set to be delivered in October — which is nothing short of a remarkable feat of engineering. Coming in at 1,196 feet, or nearly 4 Statues of Liberty laid end-to-end, Icon will offer its 5,600+ guests the choice of 6 waterslides, 7 pools, 19 floors to explore, and 40+ bars and restaurants.

Not waving, but drowning

That demand suggests that the industry is getting back on an even keel, with consistent profits likely to follow. Indeed, in the decade 2010-2019, Carnival Corporation — at the time the world’s largest cruise ship company — was a slick operation, raking in more than $24bn in operating profits across those 10 years, with ~$3.3bn coming in 2019 alone. But, the pandemic very nearly sunk the ship, kickstarting 3 cash-hemorrhaging years for the company and industry at large.

Below deck

As passengers have gradually started to don their deck shoes once again, Carnival’s revenues have crept up, but still not enough to match the costs that come with operating the floating hotels. Just fueling its fleet, for example, cost Carnival a whopping $2.2 billion in 2022. All told, Carnival Corp. reported an operating loss of $4.4 billion as passenger tickets and onboard sales failed to rebound sufficiently… and that was a significant improvement on the $7.1 billion loss the year before.

Seas the day

Interestingly, the more costly cruises seem to be the ones that are really setting sail, with the luxury cruise market expecting to carry over 1 million guests in 2023, up from 600,000 in 2019. Customers appear willing to trade up for a voyage that’s a tad more bon, perhaps fitting the trend of what some have called "revenge travel". Some of the most sophisticated ships even offer a personal butler service and access to the only Nobu at sea.

But, apart from fine dining or particularly exotic locations, the biggest differentiator when you’re out at sea? How many crew members there are to help you have the time of your life. Data from Cruisewatch reveals that most cruise ships have to maintain at least 1 crew member for every 2-3 passengers.

More hands on deck

The largest cruise ships in the world tend to fit right in that sweet spot between 2 and 3 passengers per crew member. Royal Caribbean’s Oasis of the Seas hosts a crew of 2,395 for its 5,400 customer capacity, a passenger-crew ratio of 2.3. At the smaller end of the cruise ship spectrum, boats like the Crystal Esprit — a boutique, all-suite ship that was sold by Crystal Cruises in its 2021 offering — afford an unrivaled level of service, boasting 1.5x as many crew members as guests.

Cruising back

Although many had to take extraordinary measures to weather the storm, the share prices of the “big 3” — Carnival, Royal Caribbean and Norwegian Cruise Line — have all soared this year, up 92%, 100% and 37% respectively. Although not everyone's first choice of vacation, the combination of travel, entertainment and relaxation all rolled into one package was, in hindsight, probably a cocktail that would always be desirable. Reports of the death of cruises were greatly exaggerated.