The Big Three cruise line operators Carnival CCL -0.07%, Royal Caribbean Cruises RCL -0.34 and Norwegian Cruise Line, all based in Miami, are riding a consumer trend to buy experiences rather than things.

“People have bought all the stuff that they need, and they’re now looking towards gaining more experiences,” Royal Caribbean Chairman and CEO Richard Fain said on an August 1 call with analysts. “Instead of buying TVs and cars, they seem to be buying memories as never before.”

David Beckel, vice president and senior equity analyst for investment research firm Sanford C. Bernstein, like Fain, sees a cultural shift at work.

“Royal Caribbean and Norwegian on their recent earnings calls both cited a secular shift I have been trying to hone in on. People are shifting more to experiences,” Beckel said in an interview. “Cruise lines being a pure play on experience, they are uniquely situated to benefit from that trend.”

Carnival is the largest cruise ship operator in the world with annual sales north of $15 billion. The company earlier reported outstanding second quarter results as it grows its fleet of ships.

Passengers on the maiden voyage of Carnival’s newest cruise ship, the AIDAperla, in June got a lot more than the usual fancy restaurants, casinos, pools and the like.

There is an on-board brewery, waterslides, a miniature golf course, a McDonald's MCD -0.08% and a “lazy river” experience where passengers can leisurely float down an indoor river on an inner tube. All three cruise lines are introducing bigger, more feature-filled ships to attract experience seekers….

 

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Source: www.forbes.com

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