Cruise lines are investing heavily in private islands, beach clubs and purpose-built shoreside destinations as a way to attract passengers, increase onboard and destination spending, and strengthen the profitability of shorter cruises.
Carnival Cruise Line, which recently celebrated the first year of operation of Celebration Key with 2.4 million passengers, is expecting 3.5 million next year when 35 percent of its Caribbean cruises will feature itineraries that call at both Celebration Key and Relax Away Half Moon Cay on the same cruise.
Carnival is also expanding other Caribbean destinations and developing Ensenada Bay Village in Mexico as well as upgrading its land-based facilities in Alaska.
It was Royal Caribbean that first remagined the Caribbean private destination concept, beginning with its $250 million transformation of Perfect Day at CocoCay in the Bahamas. The destination combines complimentary beaches and pools with paid attractions, including water parks, cabanas and adult-only areas. The company has since expanded the concept with Royal Beach Clubs in Paradise Island, Cozumel and Santorini.
Royal Caribbean executives say these investments are helping drive demand for shorter Caribbean itineraries, particularly among younger travelers who increasingly favor more frequent, shorter vacations. The company is also developing Royal Beach Club Lelepa in Vanuatu, while its planned Perfect Day Mexico project has been delayed amid environmental concerns raised by Mexican authorities.
Other major cruise companies are pursuing similar strategies. MSC Cruises has invested in Ocean Cay MSC Marine Reserve in the Bahamas and is developing a second adjacent private island, Sandy Cay, scheduled to open in 2028. The company is also committing $450 million to a new cruise terminal and beach club in Freeport and developing Catalina Sugar Beach in the Dominican Republic.
Norwegian Cruise Line has expanded Great Stirrup Cay in the Bahamas following an estimated $150 million redevelopment. The upgraded destination includes a six-acre water park, pools and paid premium experiences such as private villas and cabanas. The island now also has a pier allowing ships to come alongside instead of tendering. Company executives expect the investment to drive demand and increase guest spending and the island’s contribution to revenue.
Disney Cruise Line pioneered the modern private-island model with Castaway Cay, introduced in 1998. It added Lookout Cay at Lighthouse Point in 2024, emphasizing Bahamian culture, local artists and traditions alongside the attractions and entertainment associated with Disney.
The appeal of private destinations extends beyond the additional spending they generate. Cruise lines can reduce fuel costs on shorter routes, control more of the passenger experience and offer premium products such as cabanas and villas that can command thousands of dollars per day.
Overall, the industry’s growing investment in exclusive destinations reflects a broader shift in
cruise economics: private islands and beach clubs are no longer simply ports of call but increasingly function as extensions of the cruise product – and as significant sources of revenue.
Excerpted from the Fall 2026 Cruise Industry News Quarterly Magazine.
