Why Carnival, Royal Caribbean, and Norwegian Cruise Line Stocks Plunged Today
Cruise-ship stocks fell on Wednesday as COVID-19 cases increased at a disturbing rate and analysts grew more bearish on the industry's prospects. As of 1 p.m. EDT, shares of Norwegian Cruise Line Holdings (NYSE: NCLH), Royal Caribbean (NYSE: RCL), and Carnival (NYSE: CCL) (NYSE: CUK) were down 11%, 10%, and 10%, respectively.
Novel coronavirus infections in the U.S. and around the world are surging. Government officials -- including Texas Governor Greg Abbott -- who have pushed to quickly reopen their state's economies are instructing people to stay home and warning that additional safety measures may be necessary, including slowing and even reversing reopening plans. These trends do not bode for well for a cruise industry that's dependent upon health authorities allowing cruise ships -- which have been prone to COVID-19 outbreaks -- to once again set sail.
Moreover, even if sailing restrictions are lifted in the fall -- which appears unlikely at this point -- will people be willing to risk getting sick to go on a cruise vacation? And not just some people, but enough for Norwegian, Royal Caribbean, and Carnival to all be profitable? I wouldn't make that bet.
Source Fool.com
