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New: Introducing “Why Is It Moving?” - lightning-fast, AI-driven explanations of stock moves
Industry Description
The Zacks Leisure and Recreation Services industry comprises various recreation providers, such as cruise, entertainment and media owners; golf-related leisure and entertainment venue businesses; and theme park makers, resort operators and event organizers. Some industry players have ski and sports businesses, while some operate health and wellness centers onboard cruise ships and at destination resorts. Many companies are engaged in hospitality and related businesses. A few industry participants also provide weight management products and services. These companies primarily thrive on overall economic growth, which fuels consumer demand for products. Demand, which is highly dependent on business cycles, is driven by a healthy labor market, rising wages and growing disposable income.
3 Trends Shaping the Leisure & Recreation Services Industry's Future
Robust Demand Helps Cruise Operators: The cruise industry is benefiting from strong demand for cruising and accelerating booking volumes. The industry is benefiting from solid bookings related to North American and European sailings. Also, strong pricing (on closer-in-demand) and solid onboard spending bode well for the industry.
Theme Park Operators & Live Entertainment Benefit From Robust Demand: The theme park industry is benefiting from robust demand. Theme park operators have been gaining from improved visitation. Consumer spending at theme parks continues to rise. The theme park sector is experiencing a boost from integrating technology, particularly through augmented and virtual reality. Live entertainment firms have benefited from pent-up live event demand and robust ticket sales.
Rising Disposable Income & Technology Integration: Rising disposable incomes in the United States have boosted leisure travel demand, supported by an increase in personal consumption expenditure. The leisure market benefits from growth in experiential travel preferences, with adventure tourism, wellness retreats and luxury travel becoming more prominent. Technological advances, including AI-driven travel recommendations and virtual reality previews, are enhancing consumer engagement and accessibility. Additionally, eco-tourism and sustainable travel have gained popularity, aligning with consumer values around environmental responsibility. Digital booking platforms and social media continue to shape travel trends, making short and personalized trips more accessible and appealing.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Leisure and Recreation Services industry is grouped within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #50, which places it in the top 21% of 243 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright, near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 50% of the Zacks-ranked industries results from a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in the group’s earnings growth potential.
Before we present a few stocks that investors can consider, let us analyze the industry’s recent stock-market performance and valuation picture.
Industry Underperforms the Sector
The Zacks Leisure and Recreation Services industry has underperformed the Zacks S&P 500 composite and its sector in the past year. Stocks in the industry have collectively grown 10.1% in the past year compared with the broader sector’s rally of 13%. The S&P 500 has risen 16.2% in the said time frame.
Valuation
Based on the forward 12-month P/S, the industry trades at 2.49X compared with the S&P 500’s 5.36X and the sector’s 2.35X. In the past five years, the industry has traded as high as 6.37X and as low as 1.68X, the median being 2.30X, as the charts show.
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4 Leisure & Recreation Services Stocks to Keep an Eye On
Trip.com Group: TCOM is benefiting from multiple growth drivers that highlight its strong recovery and expansion momentum. International reservations on its OTA platform surged more than 60% year over year, reflecting resilient demand across markets. Inbound travel also delivered impressive strength, with bookings more than doubling from last year. The company continues to invest strategically in innovation, partnerships and inbound travel initiatives, positioning itself for sustained growth.
Shares of this Zacks Rank #1 (Strong Buy) company have gained 14.6% in the past year. In 2025, TCOM’s sales and earnings are expected to witness year-over-year growth of 15.5% and 2.8%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carnival: The company is benefiting from sustained demand strength, increased booking volumes and the destination strategy. Carnival reported that forward bookings for 2026 are outpacing capacity growth, with both North American and European brands achieving record pricing levels. With limited capacity additions and strong onboard revenue trends, the company anticipates yield gains in fiscal 2026 and beyond.
Shares of this Zacks Rank #1 company have jumped 32.4% in the past year. In fiscal 2025, CCL’s sales and earnings are expected to witness year-over-year growth of 6.5% and 51.4%, respectively.
Norwegian Cruise: The company is benefiting from strong consumer demand, solid onboard spending and benefits realized from strategic growth initiatives. Bookings were strong across all three brands, driving advance ticket sales to a record $4 billion at the end of the second quarter of 2025. Also, the company's focus on fleet management strategy, including ship additions and existing fleet enhancements, is encouraging for its long-term prospects.
Shares of this Zacks Rank #1 company have declined 4% in the past year. In 2025, NCLH’s sales and earnings are expected to witness year-over-year growth of 6% and 14.8%, respectively.
Marriott Vacations: The company is likely to benefit from strong demand for leisure travel, digitization initiatives and expansion efforts. Also, the focus on the Strategic Business Modernization Initiative bodes well for Marriott Vacations. Its forward bookings remained strong, with strength seen in Maui, Coastal Florida and the Caribbean.
Shares of this Zacks Rank #2 (Buy) company have declined 15.5% in the past year. In 2025, NCLH’s sales and earnings are expected to witness year-over-year growth of 3% and 3%, respectively.
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This article originally published on Zacks Investment Research (zacks.com).
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