The Secret to Royal Caribbean's Growth in 2026 and Beyond

In a challenging industry, Royal Caribbean Cruises (NYSE: RCL) has stood out for its exemplary returns for shareholders over the past five years. The first two articles in this three-part series have looked at Royal Caribbean's history in the context of the broader cruise industry, as well as the financial prowess that allowed the company to navigate the painful COVID-19 pandemic period with minimal long-term impacts on its business.

In this final installment, you'll get a closer look at the plans Royal Caribbean has to keep up its momentum and continue fostering growth. The progress it has made so far and the targets it has set for the future has led me to make Royal Caribbean the first stock in my new Voyager Portfolio for 2026.

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A perfect(a) strategy

Royal Caribbean has traditionally followed a simple recipe for building long-term shareholder value. It has aimed to increase its capacity at a moderate rate steadily over time. It has also tried to produce moderate yield growth, reflecting its efforts to offer more value to customers in a way that prompts them to spend more. And finally, Royal Caribbean has maintained a diligent, disciplined approach to controlling its costs, allowing for margin improvement and faster growth in net income than its sales gains would suggest.

The company has further cemented its near-term financial goals in a new strategy it calls Perfecta. Royal Caribbean still intends to remain true to its core mission of delivering the best vacations to travelers in a responsible manner. Yet it also believes it can generate average annual growth rates of 20% in earnings per share between now and 2027, along with returns on invested capital in high-teen percentages. Doing all this is important, but Royal Caribbean is also committed to ensuring that it maintains its investment-grade bond rating so as to keep its financing costs from rising sharply.

Expanding its fleet and its map

Royal Caribbean has concentrated on two key areas in which it thinks it can excel and stay ahead of its competition. The company has already begun an ambitious schedule of new cruise ships, with the Star of the Seas and Celebrity Xcel vessels taking to the water during 2025 along with the German Mein Schiff Relax. 2026 should see another ship from the Mein Schiff line as well as the Legend of the Seas. And over the following two years, three new Celebrity ships -- Compass, Seeker, and Xcite -- will take to the seas, along with the Icon 4 and Oasis 7. The variety of new vessels will support Royal Caribbean's efforts to cater to all classes of travelers, ranging from budget-conscious bargain hunters to ultra-premium elite travelers.

Meanwhile, Royal Caribbean expects to build on the past success of its Labadee and Coco Cay exclusive destination resorts by adding several more locations between now and 2028. These are expected to include new Royal Beach Club resorts on Paradise Island in the Bahamas, Cozumel in Mexico, and Lelepa in the South Pacific. Travelers are also excited about other new properties like Perfect Day Mexico in the Cormorant at 55 South in Chile, which should act as a gateway for expeditions to Antarctica.

Why Royal Caribbean is worth an investment in the Voyager Portfolio

I'll admit it: I've never taken a cruise, and I'm not the target audience for Royal Caribbean. I prefer calling my own shots with my travel, exploring on my own away from crowds without fixed itineraries.

But even I'll admit that there's some appeal to the cruise lifestyle. Having endless dining and entertainment options makes travel a lot simpler, and being able to enjoy some downtime between destinations without worrying about driving, biking, or flying is attractive.

What makes Royal Caribbean an attractive investment, though, is the company's strong business execution. Even before the pandemic, the cruise operator had put a successful strategy in place. As it turned out, Royal Caribbean was best-placed to weather the COVID-19 storm and emerge on top. That's why I'll be investing in Royal Caribbean shares in my Voyager Portfolio as soon as disclosure and trading restrictions allow, and I'm optimistic about the travel stock's chances for 2026 and beyond.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.