Carly explained to Freddie that when she and Missy were younger, Missy used to get really seasick, but figures that she probably got over it since she was going on a cruise.
Freddie was the one who won, but gave it up to Missy to "protect iCarly." However, it was heavily implied that he did it for both Sam and Carly, since Sam was miserable when Missy kept trying to get rid of her as Carly's best friend and Carly was being tricked and used by Missy. This proved that Freddie really does care about Carly, Sam, and the trio's friendship.
Ultimately, it turns out that it's a very good thing that Freddie gave it up the trip (whether it or not it was to Missy), because it turns out that the trip itself isn't even close to being as glamorous as it's advertised to be—for example, as it's shown at the end of the episode that, instead of taking place on some luxury ocean liner (like what's portrayed in the picture for the contest's sign-up sheet), the program's held on an industrial cargo ship.
Also, at the end of the episode, in a nice bit of ironic karma, Missy's shown to still suffer from seasickness and she's seen barfing over the side of the ship and screaming, "Get me off this stupid boat!"