The cruise industry is officially back. About 36 million passengers are expected to board a ship in 2024. That’s about 20% more than 2019. In fact, the second largest Cruise Line, Carnival’s profits in Q2 were five times higher than last year. Five. Times. That’s like trading in your dusty Honda Civic for a Tesla overnight.

Although historically plagued by viral outbreaks, nothing could have prepared the cruise industry for 2020. In fact, the whole industry had to shut down for 15 months. Two years after the pandemic the major cruise lines had piled up $76 billion in debt. Bleeding cash flows and tanking share prices led to questions about whether the industry could recover. 

I know what you’re thinking, “cruises are for retirees and my aunt who collects seashells,” but hold up. The cruise industry has undergone a glow-up, and people—especially younger folks—are jumping on board (pun totally intended). In fact, half the passengers on Carnival cruises are now millennials or younger. And, the cruise industry is gaining serious traction—Carnival’s stock is up a solid 10% this month.

So, why the sudden boom? First off, cruises are a serious bargain. Traveling on a cruise is about 40% cheaper than your typical land vacation, which is a big reason people are opting for them over a week at some overpriced resort. Plus, post-pandemic revenge travel is a real thing. After years of sitting at home trying to make sourdough bread, people are ready to splurge, and Carnival is cashing in.

The company just reported its best-ever revenue for a second quarter at $5.8 billion. And the demand? It’s off the charts. Carnival’s ships are already booking up into 2025—at higher prices, too. In other words, people are ready to cruise like it’s 1999, and Carnival has no plans to add more ships, so prices are staying high.

But What About Their Debt? Ah yes, the elephant in the room—debt. Carnival, like every cruise line, had to take on a boatload of debt to survive the pandemic. Two years after the world shut down, they were sitting on $76 billion in IOUs. But here’s the thing: Carnival’s been handling it. They paid off $1.6 billion last quarter and still ended up with $4.6 billion in liquidity. They’re definitely headed in the right direction with some major momentum. They’re using that sweet cash—$2 billion from operations and $1.3 billion in adjusted free cash flow last quarter alone—to chip away at the debt while shoring up their finances. 

Oh and did I mention that Carnival’s got something big up its sleeve? No, it’s not another ship—it’s called Celebration Key, a private island paradise set to open in July 2025. Think resort vibes: beach cabanas, infinity pools, and exclusive clubs, all on Grand Bahama Island starting at just $220 for the weekend. This $500 million project is set to open in 2025 and host 2 million guests a year, making it a serious revenue source for Carnival. 

Carnival’s stock is still trading at a dirt-cheap price—just 13.5 times forward earnings. That’s a steal when you consider how much demand there is for cruises and how Carnival is managing its debt. Plus, as interest rates start to ease, the company could get an even bigger boost. 

I’ll wrap up with this. If you thought Carnival’s comeback was already impressive, think again. This stock is far from hitting its peak, and it’s still 77% off its pre-pandemic highs. Carnival might just be the ticker you didn’t know you needed.

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Stocks.News holds a position in Carnival.