It’s another - very welcome - sign of optimism for the cruise travel industry.
Carnival Corp.’s USD $2.8b loss in Q3 was only the latest report of yet another business quarter of losses for cruise lines. Coupled with news trickling out that 2021 sales are cooling for all major cruise lines as new COVID variants spread, the outlook on cruising may not seem encouraging - at first.
But the cruise industry has made significant progress on the road to recovery. Following more than a year without operating or revenues, the pace of cruise restarts has grown. New ships have been completed, delivered and are already sailing with revenue guests, and new builds are being ordered and confirmed.
While USA Today called the short-term outlook for cruising “grim,” it also quoted Carnival CEO Arnold Donald in an interview saying, “We reported a significant loss, so we haven’t recovered yet, obviously, but as we look ahead we see brighter days.”
He added, “If things continue to trend the way they are (in terms of numbers of new COVID-19 cases), we should see positive cash flow as we get our fleet sailing broadly again.”
That optimism is being reflected in share prices. Despite the nearly USD $3billion loss, Carnival Corp.’s shares rose this week on the basis of bookings in the second half of next year rising higher than pre-pandemic levels.
Cruise Industry News reports the striking news that “cruise stocks easily outpaced the market” earlier this week. At closing on Monday, “Carnival was up 3.69 percent at $26.38. Royal Caribbean Group closed at $93.41 up 1.9 percent, but down from a mid-day high of $94.64. Norwegian Cruise Line Holdings (NCLH) was up 0.85 percent at $28.34.”
Compare those numbers to the stocks’ pandemic lows: Carnival at $7.20 in APR 2020, Royal Caribbean dropping to $19.25 the month earlier, and NCLH at only $7.03 that same month, and investors’ optimism for the future of cruising seems well-founded.