What happened 

Shares of cruise line stocks had another rough day on Monday as the market worried they may not come out of the COVID-19 crisis. Carnival Corp (CCL -0.42%) fell as much as 18.7% in early trading and is down 10.9% at 2:30 p.m. EDT. Royal Caribbean Cruises Ltd (RCL 1.23%) was down 17.9% mid-day and is now down 15.9%. Norwegian Cruise Line Holdings (NCLH 0.66%) fell as much as 18.3% and is now down 12.2%. 

Last week, cruise companies found out they wouldn't be eligible for the first round of stimulus funds, making their turnaround much harder, and over the weekend the news didn't get any better. 

Cruise ship anchored near a beach.

Image source: Getty Images.

So what

Over the weekend, it was reported that a Holland America Line ship, which is owned by Carnival, had an outbreak of COVID-19. Four people have died aboard the ship and two others have tested positive with more presumed to be sick with COVID-19-like symptoms. The ship was denied port in Panama and it's uncertain when sick crew and passengers will be able to get off, although healthy passengers have been ferried off to sister ship the Rotterdam. 

At the same time, Carnival announced that it will suspend voyages until May 15, a month longer than previously expected. Management also said the company will offer a 125% credit on cancellations for future cruises for travelers who book a trip before the end of March 2022. 

Not only is the delay in reopening normal operations going to make it difficult to survive this crisis, but more bad press about people contracting COVID-19 aboard cruise ships will also make the recovery more difficult. Investors have to be wondering how much demand there will be for cruises this summer if ships are operating by then. If news like this continues it's doubtful there will be a quick recovery. 

Now what

I recently wrote that Carnival will have a hard time surviving the COVID-19 pandemic given its $1.8 billion in 2020 debt maturities and $4.8 billion in new ship commitments this year. Royal Caribbean and Norwegian Cruise Line are in similar positions and a prolonged shutdown may force all three companies into restructuring. 

There doesn't seem to be much light at the end of the tunnel for cruise line companies right now without some kind of bailout. But that seems unlikely given that each company is incorporated outside of the U.S. and pays little in U.S. taxes. 

The news doesn't seem to be getting any better for cruise stocks and today may be the day any hope of any recovery after COVID-19 goes out the window. Investors should probably look elsewhere for top stocks in today's market