Cruise ship stocks declined on Tuesday, after voyages on several ships were reportedly canceled. Shares of Norwegian Cruise Line Holdings (NYSE:NCLH), Carnival (NYSE:CCL), and Royal Caribbean (NYSE:RCL) fell 10.2%, 7.5%, and 6.9%, respectively.
Carnival-owned cruise line Cunard reportedly canceled all voyages until November because of coronavirus-related travel restrictions and safety concerns, according to British newspaper The Telegraph.
"With many differing restrictions across countries, people's ability to move freely and safely across borders remains seemingly some way in the distance," Cunard President Simon Palethorpe said.
The news probably helped to remind investors that the COVID-19 crisis is still far from over. Case counts are rising as economies reopen, and health officials continue to warn that a second wave of infections could materialize in the fall.
Cruise ships, with their tight living spaces and exposure to new environments, are particularly prone to coronavirus outbreaks. In turn, the Centers for Disease Control and Prevention and other authorities have imposed sailing restrictions on the major cruise ship operators -- and it's possible they could extend them.
That would place further pressure on Carnival, Royal Caribbean, and Norwegian Cruise Line, which have been forced to issue large amounts of debt to raise the cash they need to stay afloat until they can resume sailing. If sailing restrictions last longer than expected, the major cruise ship companies -- and their investors -- could suffer more painful losses.