Carnival Reported Earnings on June 23, Royal Caribbean Is Next on July 28, Then Norwegian Cruise Line on July 30. Here's My Top Buy of the Bunch.

The cruise industry has largely completed its post-pandemic recovery. Occupancy rates have returned to historical levels, pricing remains healthy, and consumers continue spending on travel despite broader economic uncertainty.

With Carnival (NYSE: CCL), Royal Caribbean (NYSE: RCL), and Norwegian Cruise Line (NYSE: NCLH) all reporting earnings over the next two weeks, we'll soon get another update on booking trends and profitability. But if I had to choose just one stock today, it would be Royal Caribbean. Here's why.

Image source: Getty Images.

Consistency and profitability

Among the three largest cruise operators, Royal Caribbean has consistently produced the strongest financial results. During the first quarter of 2026, Royal Caribbean generated approximately $4.54 billion in revenue, while adjusted earnings per share increased to $3.60.

The company continues to outperform on profitability, as well. Higher ticket prices, increased onboard spending, and disciplined cost management helped Royal Caribbean generate some of the strongest margins in the leisure travel industry. Management noted that onboard purchases and pre-cruise spending remained above prior-year levels, while customer demand continued to be supported by travelers prioritizing experiences over other discretionary spending.

But perhaps most encouraging is what the company sees in future demand. Royal Caribbean says booking volumes accelerated since its last earnings report, and travelers continue reserving cruises at higher prices.

Carnival still has work to do

Carnival's latest earnings report showed that the company's turnaround continues to gain momentum. During the second quarter, Carnival reported record operating income and record adjusted net income, while customer deposits climbed to an all-time high of $9 billion. Management also said booking volumes remain strong, with reservations for 2027 and beyond ahead of last year's pace despite a more uncertain economic backdrop.

The company also made meaningful progress in strengthening its balance sheet. Since the beginning of 2024, management repaid more than $7 billion of debt, reducing interest expenses and improving financial flexibility. Still, Carnival ended the quarter with approximately $23.4 billion of long-term debt, considerably more than Royal Caribbean.

Of course, that doesn't make Carnival a bad investment. It simply means shareholders are relying on management to continue paying down debt while maintaining strong pricing and occupancy in an increasingly competitive travel market.

Norwegian carries less debt, but more risk

Norwegian Cruise Line is in a similar position. The company focused heavily on premium itineraries and expanding onboard spending opportunities while modernizing its fleet. Occupancy has largely recovered, too.

Like Carnival, however, Norwegian still operates with a leveraged balance sheet, carrying approximately $15.2 billion of total debt. While that's less than Royal Caribbean's, Norwegian generates substantially less revenue, earnings before interest, taxes, depreciation, and amortization (EBITDA), and operating cash flow, leaving it with less room for error if travel demand softens.

Demand remains remarkably strong

The encouraging news for all three companies is the industry backdrop continues to improve. According to the Cruise Lines International Association, global cruise passenger volume is expected to exceed 38 million travelers in 2026, establishing another industry record. Cruise vacations continue attracting both first-time and repeat passengers, while demand remained strong enough to support higher ticket prices across much of the industry.

Cruise operators are also generating more revenue beyond ticket sales. For example, Royal Caribbean noted onboard spending and pre-cruise purchases continue to run ahead of prior years, while Carnival also cited stronger onboard spending as a contributor to higher yields.

Why Royal Caribbean remains my favorite

All three companies should benefit if cruise demand remains healthy. But Royal Caribbean enters earnings season with the strongest combination of premium brands, record bookings, industry-leading profitability, and a healthier balance sheet than its largest competitors. And that's why I maintain that Royal Caribbean is the best buy of the three.

Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.