Cruising and Checking In: A 20-Year Outlook

Couple on Vacation

It’s February, and frankly, I’m starting to suspect my heating bill is actively mocking me. Which, naturally, led me down a rabbit hole of escapism, specifically, the kind involving warm weather and other people paying for my drinks. This, in turn, landed me on Carnival and Hyatt. Not as a passenger, mind you—my current budget leans more toward “staycations” involving rearranging the spice rack—but as someone staring at stock charts, trying to justify the vague hope that I might, someday, afford a decent pair of sandals. Twenty years is a long time, of course. I once misplaced a library book for that long and the fines were… substantial. But the numbers, surprisingly, held a glimmer of optimism.

The logic, as far as I can tell, is simple. People, generally, like going places. Even the ones who claim they don’t are usually just waiting for a good deal and a complimentary breakfast buffet. And as the global middle class swells – a phrase that always sounds vaguely ominous – more people will have both the means and the desire to inflict themselves upon various tourist destinations. It’s not necessarily a pretty picture, but it’s a predictable one. Carnival and Hyatt, it seems, are positioned to profit from this impending wave of humanity. They’re not curing cancer, but they are facilitating the pursuit of slightly better Instagram photos.

The travel industry, they say, will hit $9.5 trillion by 2035. That’s a lot of miniature shampoos. Carnival, as the world’s largest cruise line, is basically a floating city, and I imagine managing that must be a special kind of hell. But a profitable one. They have 90 ships, sailing to 800 ports. I once got lost trying to find the bakery in my own town. The sheer scale of it is impressive. They’re also good at pricing. I suspect they have an algorithm that knows exactly how much I’m willing to overpay for a room with an ocean view.

They do have debt, naturally. Everyone has debt. My cat has debt, in the form of gourmet salmon pâté. But Carnival is apparently improving its cash flow, which is reassuring. It suggests they’re not entirely reliant on selling overpriced cocktails to slightly seasick passengers. The stock is currently undervalued, which is a term I’ve learned to interpret as “might go up, might not, don’t blame me.”

Hyatt, on the other hand, is doing things differently. They’ve pivoted to an “asset-light” model, which basically means they’re letting someone else own the buildings. It’s a smart move. I tried owning a house once. It was a disaster involving a leaky roof and a colony of particularly aggressive squirrels. They also have a loyalty program with 60 million members. I suspect a significant portion of those members are just trying to accumulate enough points for a free night, and then immediately regretting their life choices.

Their recent earnings report was… robust. That’s what they said, anyway. Lots of percentages and projections. Adjusted free cash flow up 22-33%. Gross fee growth of 8-11%. It all sounds very impressive, but frankly, I mostly just skimmed it. I’m better at spotting a good bargain on hand sanitizer than I am at deciphering financial statements. They’re anticipating a jump from a $52 million loss to a $235-320 million profit. Which is… substantial. Enough to buy a very nice pair of sandals, at least.

Hyatt’s stock has risen 125% over the past five years. That’s a good sign. It suggests people believe in their strategy. Or maybe they just like the miniature shampoos. The forward P/E ratio is slightly higher than the industry average, but if you’re investing for the next 20 years, a little extra cost now seems… manageable. Especially when you consider the potential return. And the possibility of escaping the winter.

So, here we are. Twenty years. A long time to wait for a potential profit. But then again, I’ve been waiting for my library book for that long, too. And, as life and health expectancies rise, and wealth grows, the desire to travel will likely only increase. Carnival and Hyatt, it seems, are positioning themselves to capitalize on that trend. They’re innovating, improving their financial performance, and, most importantly, providing a temporary escape from the mundane. And, frankly, that’s worth something. Maybe even enough to buy a decent pair of sandals.

2026-02-16 09:03

Read More