It's not a surprise that taking a cruise can be hazardous to your health these days. Cruising was a hotbed for contagion in the early days of the global pandemic crisis before the industry was shut down in March. We've seen the COVID-19 outbreaks continue in select international markets that have resumed sailings.
Carnival (CCL +0.68%) (CUK +0.00%), Royal Caribbean (RCL +0.56%), and Norwegian Cruise Line (NCLH 0.81%) aren't entertaining passengers until some time next year, but the U.S. Centers for Disease Control and Prevention wants to make sure that potential seafarers know what they're getting themselves into come 2021. The national public health institute is bumping the risk of cruise ship travel to Level 4, the agency's highest level of concern for possibly contracting the COVID-19 virus. Are you still bent on hitting the high seas next year?
Image source: Getty Images.
Risky business
The upgraded risk level doesn't mean that there will be more delays in the resumption of sea travel for U.S. sailings. The "No Sail Order" that ended last month -- replaced by a conditional sailing order with big hurdles for Carnival, Royal Caribbean, and Norwegian Cruise Line to clear -- remains in place. The new risk level does make things a bit more inconvenient for potential passengers. New guidelines suggest that cruise ship patrons get tested three to five days after the trip and stay home for seven days after the sailing even if the COVID-19 test proves negative, but these are simply recommended measures disembarking passengers.
Cruise line stocks have been rallying this month on favorable vaccine news. We may have to wait until the COVID-19 crisis is a thing of the past for it to be business as usual for Carnival, Royal Caribbean, and Norwegian Cruise Line. All three cruise lines pushed their restart dates to January earlier this month, but we're already seeing the 2021 calendar pages starting to turn. Late last week, Carnival bumped sailings on some of its non-Carnival sailings to between April and as late as November of next year.
The industry has been prepping for a slow recovery. Taking advantage of their rising share prices and low interest rates this month Norwegian Cruise Line and Carnival stepped up their refinancing efforts last week. We're now in a race between the potentially COVID-19-snuffing vaccines that could squash the pandemic and the industry's ability to jump through tightening regulatory hoops before we start sailing again.
Waiting isn't the end of the world for Carnival, Royal Caribbean, and Norwegian Cruise Line. They've now improved their liquidity to last well into next year. Sweating things out may also help the global economy make inroads in tackling the current recession. The finish line doesn't have to end badly just because the starting line -- or, more accurately, the restarting line -- keeps getting moved later into 2021. Investors will need to be patient, but after more than eight months of disrupted operations, they already know the drill.
