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

By Rich Smith – Jul 8, 2020 at 1:51PM

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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.

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Stocks Mentioned

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

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