Can Carnival's Destination Strategy Power a New Phase of Yield Growth?

Carnival Corporation & plc CCL is doubling down on a high-margin, experience-led strategy by investing heavily in exclusive Caribbean destinations to unlock additional revenue streams. The cruise giant has been steadily building out its portfolio of exclusive private island destinations, positioning the assets as growth accelerators capable of lifting yields and deepening guest engagement.At the center of this strategy is Celebration Key, a 275,000-square-foot lagoon destination set to open in July. Built to house the world’s largest swim-up bar and most expansive sandcastle attraction, Celebration Key has already become one of the most Googled cruise destinations. Carnival is deploying targeted marketing spend behind the destination, aiming to drive both brand heat and yield premiums. Early booking trends are encouraging, with pricing in line with management’s expectations.Carnival also plans to expand other Caribbean properties under its “Paradise Collection,” including RelaxAway (Half Moon Cay) and Isla Tropicale (Mahogany Bay). These destinations are being enhanced to support higher guest throughput, improved infrastructure and elevated experiences, paving the path for increased revenue per passenger.By leveraging unique land-based assets and extending its advanced booking window, the company is creating opportunities to drive consumer conversion, optimize pricing and extract more value from each guest. In an environment where capacity growth remains measured, these assets offer an efficient lever for improving returns.With over 2 million annual visitors expected across these properties, the downstream impact on yield and per-passenger spend could be meaningful. In fiscal 2025, Carnival expects net yields (in constant currency) to be approximately 5.6% higher than 2024 levels.How It Stacks Up to CompetitorsRoyal Caribbean Cruises Ltd. RCL has long embraced a destination-first strategy and continues to double down with its expanding portfolio. Over 70% of Royal Caribbean’s Caribbean itineraries already include a stop at a private destination, and that number is expected to climb to 90% by 2027. The company’s Perfect Day series remains a powerful lever for driving higher average per diems (APDs) and elevated onboard revenues. In 2025, Royal Caribbean is guiding for yield growth in the range of 2.6-4.6%, underpinned by destination-led pricing strength and favorable mix.Norwegian Cruise Line Holdings Ltd. NCLH is also building out its destination infrastructure, with a focus on elevating Great Stirrup Cay, its private island in the Bahamas. Norwegian Cruise expects to more than double Great Stirrup Cay’s capacity by 2026, from roughly 400,000 to over 1 million annual guests. These enhancements, including resort-style pools, family zones, exclusive beach clubs and upgraded transportation, are designed to support stronger onboard monetization and yield lift. For 2025, Norwegian Cruise is guiding net yield growth in the 2-3% range, supported by disciplined pricing, improved onboard spend and expanded Caribbean deployment.CCL’s Price Performance, Valuation & EstimatesShares of Carnival have rallied 49.5% in the past three months compared with the industry’s growth of 26.5%.Image Source: Zacks Investment ResearchFrom a valuation standpoint, CCL trades at a forward price-to-earnings ratio of 13.82X, significantly below the industry’s average of 19.68X.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for CCL’s fiscal 2025 and 2026 earnings implies a year-over-year uptick of 38% and 13.4%, respectively. The EPS estimates for fiscal 2025 and 2026 have increased in the past 30 days.Image Source: Zacks Investment ResearchCCL stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Carnival Corporation (CCL): Free Stock Analysis Report Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks