Why Carnival, Royal Caribbean, and Norwegian Cruise Line Stocks Sank Today

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What happened

Cruise ship stocks came under pressure on Tuesday, as the highly contagious delta variant fueled a surge in COVID-19 case counts around the world. As of 3 p.m. EDT today, shares of Carnival (NYSE:CCL) (NYSE:CUK), Royal Caribbean (NYSE:RCL), and Norwegian Cruise Line Holdings (NYSE:NCLH) were down 2%, 3%, and 3%, respectively. 

So what

The seven-day average of daily COVID cases recently rose above 72,000, according to the Centers for Disease Control and Prevention (CDC), exceeding last summer’s peak. Hospital admissions and deaths also increased at an alarming rate. 

“While we desperately want to be done with this pandemic, COVID-19 is clearly not done with us,” the CDC director, Dr. Rochelle Walensky, said during a White House briefing on Monday. 

A cruise ship is sailing at night.

Cruise ship stocks fell on Tuesday. Image source: Getty Images.

Amid mounting coronavirus case counts, cruise lines are beginning to resume sailing. Perhaps unsurprisingly, COVID outbreaks have already occurred on their ships. Some cruise operators are requiring passengers to get tested for the virus in an effort to keep their customers safe, but the added cost and inconvenience is no doubt turning some would-be passengers away. 

Now what

Unfortunately, delta and other emerging coronavirus strains are likely to continue to hamper the cruise lines’ recovery until their spread is contained. Investors can expect to receive an update on the current state of the cruise industry and its latest plans to combat the coronavirus when Royal Caribbean conducts its second-quarter conference call tomorrow at 10 a.m. EDT. 

 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.





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