Why Private Islands Have Become The Cruise Industry’s Most Valuable Asset

• Carnival has invested $600 million in Celebration Key, an exclusive destination on Grand Bahama and purpose-built for Carnival Cruise Line guests.
• Wells Fargo said in November that the total addressable market for cruises will continue to expand and that private island attractions in the Caribbean have driven and will continue to drive higher demand.
• Royal Caribbean is set to open Perfect Day Mexico in the fall of 2027, offering the tallest waterslides across North and South America and the world’s longest lazy river.

Although COVID-19 was one of the biggest challenges for cruise operators, the post-pandemic world has been kind to them. People around the world were more than willing to spend on vacations and get out of the lull caused by staying cooped up at home.

And ever since, cruise operators such as Carnival Corp have been sailing at full capacity, with occupancy levels at record levels. However, as they also implement price increases, these companies are expanding on one particular itinerary: private destinations.

Private destinations are becoming a bigger part of sailings for the cruise operators who have recognized the need to offer varied experiences to consumers who have grown cautious amid tariffs, layoffs, and price increases.

In November, Wells Fargo said the total addressable market for Cruise will continue to expand, and private island attractions in the Caribbean have driven and will continue to drive higher demand.

Carnival's Investment In Private Destinations

The cruise operator, which primarily caters to a more mass-market audience, has been investing heavily in the Caribbean to build its own private islands. As more people look to travel to exclusive destinations offering everything from water parks to long, blue beaches, Carnival is not waiting around.

Carnival has invested $600 million in Celebration Key, an exclusive destination on Grand Bahama, purpose-built for Carnival Cruise Line guests and offering a beach, freshwater lagoons, local Bahamian flavors, and exciting excursions.

The company has also said that mid next year it will also open the pier expansion at Relax Away Half Moon Cay, its pristine Caribbean oasis. Carnival said that once both piers are operating, one out of every five Carnival Cruise Line Caribbean itineraries will visit these paired destinations, providing guests with beaches and an “all-in-one vacation.”

“We just got to keep doing what we're doing, investing in the things that we think make a difference, leaning into the destination strategy, certainly Celebration Key, Relax Away Half Moon, and those things are going to help. We're always looking at different opportunities like that,” Carnival’s CEO Josh Weinstein said in September.

Norwegian Cruise And Royal Caribbean: Not Holding Back

Carnival’s peers, Norwegian Cruise Line Holdings and Royal Caribbean, have also been leveraging the demand for private destinations and expanding their base. In October, Royal Caribbean said it expects to drive margin expansion even as it advances major initiatives throughout 2026, including the opening of the Beach Club in Nassau and the build-out of Perfect Day Mexico.

Perfect Day Mexico would open in the fall of 2027 and is located on Mexico’s Caribbean coast, offering experiences such as the tallest waterslides in North and South America and the world’s longest lazy river. Royal Caribbean said once the destination opens, Perfect Day Mexico will welcome Western Caribbean itineraries sailing from Galveston, New Orleans, and all Florida homeports.

In November, Norwegian Cruise did not hesitate to say that it was “working diligently” to attract more families to its private destinations, particularly the upgraded private island, Great Stirrup Cay. Its other private island is Harvest Caye in Southern Belize, with a scenic white-sand beach, a lagoon-style pool, and offers adventurous activities to attract customers.

Carnival’s Results On Deck

The company is set to report its quarterly results on Friday, with Wall Street expecting substantial revenue and profit growth heading into the WAVE season early next year.

The WAVE season is a period between January and March when operators offer special cruise deals and discounts for the year, raking in record bookings for the next 12 months.

Jefferies raised its price target on Carnival to $37 from $34 on Monday and maintained a ‘Buy’ rating on the shares. For 2026, the firm said it was bullish across the group on the cruise names.

Carnival is expected to report fourth-quarter revenue of $6.38 billion, and Wall Street estimates earnings per share at $0.25, according to data from Fiscal AI.

Cruise operators have been raising prices on their itineraries to offset the rising cost of fuel and the increase in dry dock days, periods when ships are halted or suspended from sailing for maintenance.

Carnival and peers have so far enjoyed no pushback to higher ticket prices, even as the broader consumer sentiment has remained cautious about spending. People have been more than willing to spend their money on experiences and, more importantly, on exotic vacations.

What Is Retail Thinking?

Retail sentiment on Carnival Corp has jumped to ‘extremely bullish’ from ‘bearish’ territory a month ago, with message volumes at ‘high’ levels, according to data from Stocktwits.

The retail user message count on Stocktwits for Carnival rose by a whopping 880% over the past year, indicating strong retail interest in the stock.

Retail sentiment on Norwegian Cruise was in the ‘bullish’ territory compared to ‘neutral’ a month ago. At the same time, Royal Caribbean also improved to ‘bullish’ from ‘neutral’ during the same period.

Shares of Carnival Corp have jumped nearly 15% this year, and Royal Caribbean’s stock has seen a 25% rise, while Norwegian Cruise has lost 16% of its value year-to-date.

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