Coronavirus Scare Wipes Out Half Of Cruise Stocks' Market Cap
Zacks Investment Research | Mar 11, 2020 09:21PM ET
The global stock markets have been rattled by the coronavirus crisis and the cruise stocks are no exception to the trend. Travel warnings and cruise cancellations are starting to take a toll on the industry. In the past month, shares of major cruise operators like Royal Caribbean Cruises Ltd. (NYSE:RCL) , Carnival Corporation & Plc (NYSE:CCL) and Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) have declined 62.1%, 61.2% and 72.7%, respectively.
Apart from China, the deadly virus has spread to countries including the United States, Italy, South Korea, India, Israel, Saudi Arabia, Sweden, France, Denmark and Japan. In fact, cases of coronavirus have been reported across 124 countries and territories.
Travel Restriction Hurts Cruise Industry
The Cruise Lines International Association has submitted a plan to Vice President Michael Pence suggesting that any person over the age of 70 years shouldn’t be allowed to board a cruise if they fail to provide fitness certificate from doctor. Per Cruise Lines International Association, the average age of passengers on cruises is 47, while 14% are 70 years or above.
The proposal also includes boarding denial to those passengers and crew, who have travelled to Japan and Italy within 14 days prior to embarkation. Meanwhile, President Trump has put restriction on passenger travelling from 26 European countries to the United States. Trump said “We made a lifesaving move with early action on China. Now we must take the same action with Europe.”
While cruise business from China and Asia fell significantly, bookings for the broader business outside Asia has also softened recently thanks to travel restrictions to contain the spread of the contagion.
Coronavirus to Affect Cruise Operators 2020 Results
Royal Caribbean, which had earlier said that first-quarter and 2020 guidance did not include the impact of the coronavirus outbreak, has withdrawn its guidance due to “uncertainty of changes in the magnitude, duration and geographic reach of coronavirus”. Royal Caribbean currently has a Zacks Rank #3 (Hold). You can see Original post
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