COVID-19 slammed into the U.S. economy like an iceberg, and crushed the cruise line industry like it was the Titanic.

As America shut down and sheltered in place in late March and for much of the second quarter, GDP plunged by as much as 32.9% and more than 40 million workers lost their jobs -- and for some companies, a one-third decline in their revenues would have been getting off easy. Norwegian Cruise Line Holdings (NCLH -4.24%) saw essentially its entire business disappear.

Cruise ship faces a partially submerged coronavirus

Image source: Getty Images.

After numerous outbreaks of COVID-19 hit cruise ships -- in some cases infecting hundreds of passengers on a given vessel -- the Centers for Disease Control and Prevention took action in March. To avoid the prospect of  thousands of passengers and crew, confined in relatively close quarters, spreading the novel coronavirus to one another -- and then sailing to new locales and spreading it further -- the U.S. instituted a "no sail" order forbidding cruise ships from starting new trips. Since then, it has repeatedly extended that ban.  

All major cruise lines remain under government orders to refrain from sending their ships out from U.S. ports through Sept. 30. And beyond that, the Cruise Lines International Association -- the industry's largest trade group -- last week extended its own voluntary moratorium until Oct. 31. Members of that association include Royal Caribbean, Carnival, and Norwegian Cruise Line.

The effect that is having on their finances is about what one would expect. Norwegian Cruise Line in particular revealed last week that its revenues in Q2 were even worse than anticipated, and that it is burning through $160 million in cash every month it remains confined to port. Management noted that it won't be able to meaningfully offset its cash burn before October -- if then.

Result: Norwegian Cruise Line Holdings stock that sold for nearly $59 at the beginning of this year closed barely above $15 Tuesday, and has lost 72.5% of its value. If on Jan. 1 you had invested $10,000 in Norwegian Cruise shares, then today, your paper losses on that investment are $7,250. Your shares are worth $2,750.

NCLH Chart

NCLH data by YCharts