RRCLRoyal Caribbean Cruises Ltd.

Royal Caribbean carries passengers by sea — a business of enormous fixed costs and therefore acutely sensitive to occupancy.

A ship sails whether eighty per cent of cabins are sold or a hundred: fuel, crew and port fees barely change. Hence profit's sharp dependence on occupancy and ticket price — a small increase produces a disproportionately large gain.

A substantial share of revenue arises once aboard: excursions, drinks, casino, internet. That part carries better margins than the ticket itself, so it pays the company to sell the cabin cheaper and earn from the passenger inside.

The industry endured a complete shutdown during the pandemic, took on debt and has been reducing it since — that is the investor's main storyline. Risks: fuel prices, epidemics, weather and the cost of new ships ordered years in advance. The company has resumed paying a dividend.