Cruise stocks are on the rise today on positive news from Wall Street. After the July 4th weekend brought considerable turbulence to the travel sector, some experts wondered whether more trouble lay ahead. According to Bank of America CEO Brian Moynihan, however, investors may not have to worry. The CEO says consumer spending didn’t slow in June:
“Our U.S. consumer clients remained resilient with continued strong deposit balances and spending levels.”
Moynihan cited credit and debit card spending, which actually jumped 11% during the month. The CEO doesn’t expect this spending to slow down anytime soon, either. If that sentiment proves true, it could spell an excellent season for the travel sector.
Let’s take a look at what investors in cruise stocks can expect.
What’s Happing With Cruise Stocks?
Cruise stocks have enjoyed an excellent start this week. The industry’s biggest players haven’t had an easy month, but all major cruise lines are shooting up today. Norwegian Cruise Line (NYSE:NCLH), Royal Caribbean (NYSE:RCL) and Carnival (NYSE:CCL) are all up roughly 7% as of this writing. In addition to cruise stocks, hotel and airline stocks are also rising today.
Moynihan’s positive words have clearly generated some bullish energy for the sector. But the executive isn’t the only one predicting relief for travel companies. InvestorPlace contributor Sakshi Agarwalla also sees better days ahead:
“A strong job market, higher household savings, and pent-up demand for travel from the Covid-19 pandemic shutdowns should keep the industry sailing.”
Will demand continue for cruise lines? If Moynihan’s thesis is correct, things are certainly looking up. Travel spending has been rising steadily for months. In May 2022, it hit a “new pandemic high,” reaching $101 billion. The U.S. Travel Association says that domestic leisure travel spending has “already surpassed pre-pandemic levels, even when adjusted for inflation.”
What Comes Next?
Cruise stocks have one more thing helping them win: travel by water is becoming more affordable. GoBankingRates reports that cruise lines reduced prices significantly in 2022, with some prices falling as low as $100 per night.
Even as gas prices fall and airlines smooth out operations, there’s no denying cruises are now as tempting as ever. If this trend continues, it could be the boon cruise stocks need to make up for some of their huge pandemic losses.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.