Cruise ship stocks gave back some of their recent gains on Thursday, as surging COVID-19 case counts threaten to delay the beleaguered industry's recovery. By the close of trading, shares of Carnival (CCL 2.67%) (CUK 2.56%), Royal Caribbean (RCL 1.09%), and Norwegian Cruise Line Holdings (NCLH 2.14%) were down 7.8%, 3.9%, and 3.4%, respectively.
Cruise ship stocks surged on Monday after Pfizer and BioNTech said their experimental coronavirus vaccine could be more than 90% effective at preventing COVID-19. A safe and highly effective vaccine would be a boon for cruise ship operators, who have suffered billions in losses with their ships stuck at port due to coronavirus-related sailing restrictions.
However, even if Pfizer and BioNTech receive regulatory approval, their vaccine may not be widely available until well into 2021. In the meantime, Carnival, Royal Caribbean, and Norwegian Cruise Line are burning through nearly $1 billion in cash per month in aggregate.
With COVID-19 case counts soaring in the U.S. and many international markets, health officials could choose to extend sailing restrictions into 2021. Royal Caribbean, Carnival, and Norwegian Cruise Line Holdings have all raised cash to survive such a scenario, but each month that goes by eats into their cash cushions, thereby increasing the risk for investors.