Cruise line stocks were falling sharply Monday morning as escalating Covid-19 cases and related restrictions highlight continuing headwinds for the industry.
(ticker: CCL) fell 9.6% to $13.89, while
Norwegian Cruise Line Holdings
(NCLH) slid 9.7% to $16.58 and
Royal Caribbean Group
(RCL) was 9.9% lower at $58.10.
The rising case counts are weighing on stocks across the board, leaving the
Dow Jones Industrial Average
down 1.8% and the
Cruise company stocks have suffered throughout the pandemic because most sailings have been canceled. Carnival and Norwegian have been hit the hardest, falling 72% and 71% year to date, respectively. Royal Caribbean has dropped 55%.
The recent spike in cases worldwide—and increasing moves by governments in Europe to curb the spread—emphasize the protracted nature of the crisis and could be spooking investors who had been betting on stocks that could benefit from eased restrictions, such as cruise lines.
While pent-up demand might eventually help the group—and there are some who think the selloff has gone too far—cruise restrictions continue to be extended. Even with increased health protocols, some analysts warn that cruises won’t return until 2021.
“We believe that a return to extensive travel (planes, cruise, hotels) is several years away,” Citigroup analyst Shawn Collins wrote in an upgrade of RV maker
Absent a vaccine, reminders of how far from normal the world still is are likely to weigh on cruise stocks.
Write to Teresa Rivas at [email protected]