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What happened
Stockpiles of cruise ships were under pressure on Tuesday as the highly contagious delta variant fueled a surge in COVID-19 cases around the world. At 3:00 p.m. EDT today, shares of Carnival (NYSE: CCL) (NYSE: CUK), Royal Caribbean (NYSE: RCL), and Norwegian Cruise Line Holdings (NYSE: NCLH) fell by 2%, 3% and 3% respectively.
So what
The seven-day average of daily COVID cases recently surpassed 72,000, according to the Centers for Disease Control and Prevention (CDC), surpassing last summer’s peak. Hospital admissions and deaths have also increased at an alarming rate.
“While we desperately want to end this pandemic, COVID-19 is clearly not done with us,” CDC director Dr Rochelle Walensky said on Monday in a White House briefing.
Inventories of cruise ships fell on Tuesday. Image source: Getty Images.
Amid the growing number of coronavirus cases, cruise lines are starting to resume sailing. Not surprisingly, COVID outbreaks have already occurred on their ships. Some cruise lines require passengers to get tested for the virus in an effort to protect their customers, but the additional cost and inconvenience is no doubt turning some potential passengers away.
Now what
Unfortunately, the Delta and other emerging strains of coronavirus will likely continue to hamper the recovery of cruise passengers 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 fight the coronavirus when Royal Caribbean holds its second quarter conference call tomorrow at 10:00 a.m. EDT.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
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