Cruise Lines Embrace Private Islands to Boost Revenue

Cruise lines are turning to a new type of destination to enhance their revenue streams: private islands. Rather than emerging destinations like Dominica or trending spots such as Costa Rica, many major cruise lines are investing in their own private islands in the Caribbean.

Royal Caribbean pioneered this trend with the launch of Perfect Day at CocoCay and recently announced plans to create another Perfect Day experience in Mexico. Other lines have followed suit; Disney Cruise Line offers Lookout Cay, MSC Cruises has Ocean Cay MSC Marine Reserve, and Norwegian Cruise Line features Great Stirrup Cay, among others.

The appeal of private islands is clear: they are owned and operated by the cruise lines themselves, allowing them to generate revenue without incurring governmental fees like taxes and port charges. Jason Liberty, president and CEO of Royal Caribbean Group, noted, “Perfect Day at CocoCay has been a game changer for both our guests and our business. With travelers prioritizing unique experiences, we’re excited to expand our Perfect Day Collection with Perfect Day Mexico to serve guests eager to explore the Western Caribbean.”

According to Reuters, private islands have significantly contributed to cruise line success. Since the opening of Perfect Day at CocoCay in 2019, Royal Caribbean’s expenses have risen by 34%, but revenues have increased by 43%. Furthermore, visitation to private islands from July 2023 to July 2024 grew at a rate of 41%, outpacing the 18% growth for non-private islands in the Caribbean.

Despite this growth, private islands still see fewer visitors due to capacity limitations. In the past year, about 10 million people visited these islands, while other Caribbean destinations welcomed 57 million cruise passengers.

Currently, there are twelve private cruise destinations in the Caribbean, with more planned, including Carnival’s Celebration Key, set to debut in 2025 with an investment of around $600 million. It’s clear that private destinations are becoming a mainstay for cruise lines and are expected to continue growing in popularity.

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