Please ensure Javascript is enabled for purposes of website accessibility

Why Carnival Corporation, Royal Caribbean, and Norwegian Cruise Line Stocks All Just Popped

By Rich Smith – Jul 8, 2020 at 1:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Two of America's biggest cruisers are figuring out how to resume cruising safely.

What happened

Cruise shares are rocking again in midafternoon trading, with Norwegian Cruise Line Holdings (NCLH -18.04%) stock up 4.1%, and both Royal Caribbean (RCL -13.15%) and Carnival Corporation (CCL -23.25%) (CUK -23.01%) rising 4.9% apiece through 2:20 p.m. EDT.

So what

According to TravelPulse, a joint safety task force formed by Norwegian Cruise and Royal Caribbean called the "Healthy Sail Panel" is hard at work "developing practical social distancing measures" designed to help get cruise ships cruising safely again.

A folded paper boat that says "news"

Image source: Getty Images.

According to the travel industry news site, both companies plan to limit the number of passengers who can embark on their cruise ships in order to comply with CDC guidelines. Additionally, the companies are working out ways to maintain social distance among passengers once they're on board, including measures for staggered boarding times, limiting the number of people who can be in onboard restaurants at the same time, adding more on-board events to decrease density at each event, and so on.

Meanwhile, TravelPulse notes that Carnival, while not participating in its rivals' task force, will participate in a July 23 "virtual summit" held by the World Travel & Tourism Council (WTTC) to discuss measures for safe cruising in a world where the coronavirus remains a threat.

Now what

Granted, none of these measures can actually be implemented in practice until the CDC lifts its no-sail order, which is currently scheduled to lapse on July 24. For that matter, the cruise lines themselves have already promised they will refrain from sailing before Sept. 15.

Still, investors appear to be taking encouragement from the companies' proactive efforts to prepare for the day when they do resume cruising. The better prepared they are beforehand, the sooner that day may arrive -- and the sooner all three of these companies can begin bringing in some consumer discretionary revenue to offset their fixed operating costs and begin to extinguish their ongoing cash burn.

That hope alone seems to be behind today's wave of optimism.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Royal Caribbean Cruises Ltd. Stock Quote
Royal Caribbean Cruises Ltd.
$37.90 (-13.15%) $-5.74
Carnival Corporation Stock Quote
Carnival Corporation
$7.03 (-23.25%) $-2.13
Carnival Corporation Stock Quote
Carnival Corporation
$6.19 (-23.01%) $-1.85
Norwegian Cruise Line Holdings Ltd. Stock Quote
Norwegian Cruise Line Holdings Ltd.
$11.36 (-18.04%) $-2.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.