Passenger and Revenue Strength Driving Balance Sheet Strength

Across the first nine months of 2025, the three operators carried nearly 19.6 million passengers—up 16.7% from 2019. Growth was particularly strong for RCG (+41%) and steady for Carnival (+6%) and NCLH (+8%). Demand strength is also reflected in gross revenue per available passenger cruise day (APCD), a measure of revenue generated per passenger per day, which has jumped 36–42% versus 2019.

Occupancy levels further highlight the market's strength, exceeding pre-pandemic benchmarks: 112% for Carnival and RCG and 106% for NCLH, indicating higher demand per sailing.

By year end, the industry is estimated to carry roughly 3.6 million more passengers this year across these three operators than in 2019, while per-passenger revenue per day has jumped 36–42%. Combined, this represents a massive surge in overall revenue, demonstrating that not only are more people sailing, but each sailing is generating substantially more value.

On the Road to Post-Pandemic Financial Recovery

Higher passenger volumes and strong per-passenger revenue are generating robust cash flow, allowing cruise lines to reduce debt while continuing to invest in destinations and shore infrastructure.

Carnival, the largest of the three operators and carrying the most debt relative to its size, has shown the most consistent reduction. Net debt fell by roughly $2 billion per year from 2022 through 2024, reaching $24.7 billion as of Q3 2025. Its leverage ratio declined from 4.3x to 3.6x, giving the company flexibility to invest in destinations while keeping debt reduction a priority. With few new ship deliveries planned over the next few years, more free cash flow can go toward debt repayment—potentially paving the way for a future shift toward returning capital to shareholders.

"Given the progress we have made and while still a top priority, it is great to be able to say that debt reduction no longer has to be priority 1, 2 and 3. We can soon pivot to diverting some of that effort to returning capital to shareholders as well."

RCG's debt profile remains stable, with net debt slightly higher than last year at $19.8 billion, reflecting ongoing investment in ships and destinations. The company has been steadily paying down debt since 2022, and its leverage ratio has fallen below 3x, providing financial flexibility to expand its destination portfolio—from two assets today to eight by 2027—while also returning cash to shareholders. Since lifting lender restrictions in 2024, RCG has returned approximately $1.6 billion in dividends.

NCLH's net debt rose to $14.4 billion, largely due to the delivery of Oceania Allura and strategic refinancing actions, including replacing secured debt with unsecured notes. Despite this increase, liquidity remains strong at $1.8 billion, supporting operations, growth investment, and debt reduction, which leadership continues to make "our number one priority".

Across all three operators, stronger cash flow and reduced leverage provide a foundation to both pay down debt and continue investing in destinations and ships, further growing their business and reinforcing the link between financial health and operational expansion.

A summary of each operator's debt profile, refinancing moves, and implications is provided at the end of this BAPerspective.

Path Toward Continued Balance Sheet Strength: Diversifying the Portfolio

Across the industry, improved balance sheets are enabling operators to diversify assets, both ships and shore-side destinations. Owned and exclusive destinations are materially cheaper and faster to deliver than new ships, yet deliver similar levers: pricing power, onboard spend, guest satisfaction, and incremental revenue.

• RCG is scaling fastest from a destination perspective: expanding from 2 to 8 owned/exclusive destinations by 2027, including Royal Beach Clubs, a luxury hotel in Chile for Silversea, and a new private destination, Perfect Day Mexico. Fleet expansion also continues with 10 new Celebrity River ships (2027) and 8 ocean-going ships through 2032: 3 Icon-class, 1 Oasis-class, 1 Edge-class for Celebrity, plus 3 Mein Schiff vessels via TUI joint venture.
• Carnival expects 7 new ships from 2027–2033. The newest destination, Celebration Key, debuted in July 2025 and is performing "as phenomenal as we expected". In 2026, 20 of 29 Carnival Cruise Line brand ships will call at the island, creating near-daily high utilization. The new pier at RelaxAway Half Moon Cay (mid-2026) will allow ~1 in 5 itineraries to call at two exclusive destinations. Carnival expects ~8M guest visits across its Caribbean destinations—nearly equal to NCLH and RCG combined.
• NCLH continues investing in destinations and ships, including 13 vessels on order, with GSC enhancements (late 2025) and a waterpark (summer 2026). They are shifting toward Caribbean short sailings as an intentional trade‑off designed to drive higher load factors and margins, with these investments characterized as modest relative to their expected returns.

Looking Ahead: Balancing the Books, Building the Future

The Q3 2025 results confirm that the industry is striking a balance between financial discipline and growth. Stronger balance sheets, supported by refinancing that has smoothed near-term maturities and steadied interest costs, allow operators to invest strategically in both ships and destinations. With pricing and occupancies at all-time highs, operating cash flow is doing more of the work, creating the next wave of incremental revenue while gradually reducing leverage. Destinations are emerging as a key growth engine, complementing fleet expansion and supporting shareholder returns. Across Carnival, RCG, and NCLH, the top priority remains strengthening the balance sheet while positioning themselves to accommodate growth through owned and exclusive destinations.

Balance Sheet: Debt Profile

(in USD millions, except gross revenue per APCD)

Refinancing Moves and Implications