What happened

It's the end of April, spring is here, and the geese are flying back north. Travel stocks, however, are heading south again.

In early morning trading, shares of hotel chain Marriott International (MAR -0.18%) dropped more than 5%, and cruise operators Royal Caribbean (RCL 0.61%) and Carnival (CCL 0.06%) dropped much more. By 12:25 p.m. EDT today, all three stocks remained down, with Royal Caribbean losing 5.1%. Carnival off 6.7%, and Marriott shedding 6.3%.

Collage showing a cruise ship, a man in a face mask and a microbe

Image source: Getty Images.

So what

What we may be seeing here is the effect of a report today in The Washington Post that President Trump is planning retaliation against China for unleashing the COVID-19 pandemic upon the world. The Post describes how the president is "blaming [China] for withholding information about the virus, and [considering] dramatic measures" to punish the country for getting us all into this mess, which will probably lead China to retaliate.  

That is, the president appears to be getting ready to start a new trade war.

Now what

What would this mean for Royal Caribbean, Carnival, and Marriott? Last week, the travel website The Points Guy predicted that after a long period of being restricted to port by order of the U.S. Centers for Disease Control, the cruise industry will eventually begin sailing again. "[S]hips based in China, for instance, could be among the first to resume departures," the website said, "if only because China has started relaxing social distancing rules ahead of other countries."  

But if a trade war flares up, China might retaliate by, for example, forbidding foreign cruise lines from stopping in China. That could delay recovery by Carnival and Royal Caribbean by months.

The story could be similar for Marriott, which only this month began seeing "preliminary signs of stabilized demand" as China gets over its initial bout of coronavirus, reports The Motley Fool's Asit Sharma. It wouldn't be hard for China to make a case for closing down foreign-owned hotels within its borders. And given the precarious state of the industry (and Marriott in particular, with its nearly $12 billion debt load), China could easily use the lodging business as a pain point to retaliate against any "dramatic measures" President Trump might think up.

For the time being, of course, all of this is conjecture. Given the financial fragility of all three companies, however, you can understand why just the risk of a new trade war flaring up before the pandemic and recession are even put to bed might be weighing on shares of Carnival, Royal Caribbean, and Marriott today.