Economic Worries Have Americans Booking Cruises But Staying Closer to Home

Americans aren’t giving up on vacations, but cruise operators say they’re sticking closer to home.

Bookings for Caribbean-bound cruises remained brisk in the first three weeks of April, but trips to Europe were weak, Norwegian Cruise Line Holdings (NCLH) executives said on an earnings conference call Wednesday. They attributed the shifts to consumers feeling uncertain about the economy amid evolving domestic trade policies.

Royal Caribbean Group (RCL) also expects consumers to seek out value while planning vacations closer to home, CEO Jason Liberty said on a conference call Tuesday.

Americans “seem to be a little bit more comfortable staying closer to home, given what’s going on in the macroeconomic environment,” Norwegian CFO Mark Kemba said, according to a transcript made available by AlphaSense.

Choppiness in European cruise bookings seems to have tapered off in the final week of April, according to CEO Harry Sommer. The  “short-lived weakness” suggested “some hesitancy for Americans to do long-haul trips in this environment,” Sommer said, according to the transcript.

Norwegian missed analyst expectations in its first-quarter earnings, but maintained a rosy outlook for the year ahead. The company forecasts it will have $1 billion in adjusted net income in 2025, a roughly 11% increase from the year before.

Liberty said consumer behavior hasn’t shifted, other than being a bit “more short-term focused.”

“Travel is not the first place consumers indicate they will pull back,” he said on Tuesday’s call. He said Royal Caribbean was well-positioned to offer “value through a range of itinerary options from 3 to 10 days, from Florida, Texas, California, the Northeast, and the Northwest.” 

The company envisions net yield—revenue minus certain costs per available passenger cruise day—increasing 2.6% to 4.6% year-over-year in 2025.

Norwegian Cruise Line shares were down nearly 8% Wednesday, while Royal Caribbean Cruises shares were down a bit less than 1%.