• Ticket prices for cruises are surging as operators say they're meeting higher demand for post-pandemic vacations.
• Cruise operators such as Carnival and Royal Caribbean said they're considering raising prices even more to close the gap between the price of cruise vacations and land-based vacation alternatives.
• Some industry watchers say the price surges show no signs of slowing.

As vacationers emerge into a post-pandemic travel world, cruises have made a spectacular comeback — and ticket prices are surging.

Cruise operators such as Carnival and Royal Caribbean Cruises are setting some ticket prices higher than pre-pandemic levels and are indicating they may raise them further, even as they post pre-Covid profits.

According to data from Cruise Critic, a cruise review site owned by Tripadvisor, the average price of a five-night cruise in the Caribbean for December of this year is $736, roughly 37% higher than the average price a year earlier. Compared to 2019, before the Covid-19 pandemic decimated the cruising industry, December ticket prices are up 43%.

Carnival CEO Josh Weinstein said during a call with Wall Street analysts at the end of September that the company's third-quarter net revenue per passenger per day reached a record high. The company's booking volumes likewise hit an all-time high, pushing cruise occupancy and revenue beyond 2019 levels, he said.

Especially as costs of labor, food and fuel continue to rise, Carnival executives noted on the call, the company, which owns multiple major cruise brands, is "well-positioned to drive 2024 pricing higher."

A Carnival spokesperson declined to comment on the company's specific future pricing actions but said in a statement to CNBC that the company has been able to deliver a value of 25% to 50% over "comparable land-based vacation alternatives."

Carnival sees "ample headroom" to close that gap, the spokesperson said.

Royal Caribbean CEO Jason Liberty echoed the sentiment, saying on that company's post-earnings call in July that his company is also considering increasing prices to meet the surge in demand.

Are high prices here to stay?

Aaron Saunders, a senior editor at Cruise Critic, said part of what's driving the price surge is the comparison to high airfares.

As inflation surges, airfare tickets have reached sky-high prices, with international airfare up 26% from 2019, according to an August estimate by fare-tracking company Hopper.

With travelers facing higher costs across the broader sector, and considering cruises typically include additional amenities such as meals and entertainment, consumers are likely to gravitate in that direction, Saunders said.

That demand is being driven by both seasoned cruisers and first timers, he said, a dynamic the industry hasn't historically seen much of. Even so, Saunders said he believes the high prices might be here to stay.

"[The higher prices] are likely subject to fluctuation — but what we're seeing, generally speaking, is that the higher prices are here today, but those higher prices will ping pong around throughout different sectors," Saunders said, noting that the Caribbean market is currently one of the most popular sectors. "Cruise lines aren't being required to drop prices the way they used to … they're just simply not having to lower fares or to really offer too many incentives because people are just booking."

Truist Securities analyst Patrick Scholes said while rising oil prices are important to monitor for context for the cruise industry, there's not enough of a correlation between that increase and the increase in cruise prices to explain the propped-up tickets.

"They're raising prices naturally — fuel or no fuel, the demand is there for them to be raising prices," Scholes said.

While in a pre-pandemic world, last-minute bookings meant cheaper deals to secure a cabin, Scholes said, the prices are now so high that they'll only increase more as the vacation date nears.

For now, the record-high ticket prices show no signs of slowing, according to Ashley Kosciolek, senior cruise writer at The Points Guy. Kosciolek noted that the industry is also seeing higher prices for beverage packages and add-on amenities that used to be included in fares.

"Let's also not forget that the industry's three largest parent companies — Carnival, Royal Caribbean and Norwegian Cruise Line Holdings — are still paying off billions in debt incurred during the pandemic," she said.