If you were hoping to set sail on a summertime cruise this year, it's probably not going to happen. Norwegian Cruise Line Holdings (NASDAQ:NCLH) announced on Tuesday afternoon that it's canceling cruises embarking between Aug. 1 and Sept. 30 across all three of its brands. Only Seattle-based Alaskan voyages will stick to their September sailings. Select cruises including Canada and New England sailings are being suspended even longer, canceled through October as a result of travel and port restrictions. 

Shares of Norwegian Cruise Line are plunging in response to another two months of revenue-less living. Larger rivals Carnival (NYSE:CCL) (NYSE:CUK) and Royal Caribbean (NYSE:RCL) are still sticking to their August dates, but it's just a matter of time before they follow Norwegian into a fall restart. Shares of Carnival and Royal Caribbean are also sinking on the news. 

Cash and coins in the form of a tsunami wave.

Image source: Getty Images.

Fall out buoy

The Centers for Disease Control and Prevention's No Sail Order currently prohibits sailings until July 24 or when COVID-19 is no longer considered a public health emergency. If you think this still gives Carnival and Royal Caribbean a shot at keeping their August voyages, take a look around. Coronavirus cases are climbing, particularly in the southern states with popular ports. The CDC has extended the No Sail Order before, and it will probably do so again.

Moving the goal posts does a few things, and none of them are good. Cruise lines lose money when they're not sailing, and that's before considering the money that passengers have already paid on canceled sailings. Norwegian Cruise Line is offering customers that forgo cash refunds -- that it's taking as long as three months to pay out -- the option to take 125% of that sum in future cruise credit. The more cruises it cancels the more people it will have to book on future voyages without receiving any new money. It's also fair to say that the more sailings it pushes out, the less likely that folks will opt for future cruise credit. 

All three stocks have roughly tripled off their COVID-19 sell-off lows. It seems odd that the stocks keep moving higher even as the industry disruption calendar keeps flipping pages. The cruise lines are in admittedly better shape financially than they were a couple of months ago, raising billions in needed liquidity. However, there are still a lot of questions left to be answered.

  • Why are there still 40,000 crew members across the industry stuck on cruise ships waiting to be repatriated? 
  • Absent a cure for COVID-19 and given the morbid history of the rapid spread of the virus on sailings earlier this year can consumer demand live up to the supply?
  • Folks on sweetened future cruise credit will help fill some initial berths, but won't the recession eat into the potential of future cash bookings?
  • Will Norwegian Cruise Line really start sailing in October? 

"Wake me up when September ends," sings Green Day, but there's always a chance that the industry taps the snooze bar and continues its slumber.