What happened
Cruise ship stocks sank on Monday, as a highly contagious new coronavirus strain is forcing governments to impose new lockdowns. As of 11:30 a.m. EST, shares of Carnival (CCL 4.30%) (CUK 3.94%), Norwegian Cruise Line Holdings (NCLH 5.31%), and Royal Caribbean (RCL 3.73%) were down 4.9%, 4.5%, and 2.9%, respectively.
So what
The new strain emerged in the U.K. in September. It's reportedly spreading 70% faster than previous versions of the virus. Over the weekend, U.K. officials enacted lockdown measures in London and much of the country's southeastern regions to slow the spread.
Surging COVID-19 case counts could lead to more voyage cancellations. Image source: Getty Images.
The news overshadowed positive developments on the COVID-19 vaccine front. After receiving Emergency Use Authorization from the U.S. Food and Drug Administration (FDA) and other health regulators, Pfizer and Moderna have begun distributing their vaccines in the U.S. and internationally.
Now what
Investors have begun looking ahead to an eventual end to the coronavirus pandemic. COVID-19 has taken a huge toll on the cruise ship industry in 2020. Carnival, Royal Caribbean, and Norwegian Cruise Line Holdings have been forced to keep their ships docked at port due to coronavirus-related sailing restrictions for much of the year. With little revenue coming in, they've suffered brutal losses.
Pfizer's and Moderna's vaccines could help the industry begin to recover as sailing restrictions are lifted and more people become comfortable taking cruise vacations once again. But as the recent coronavirus outbreak in the U.K. shows, it's unlikely to be smooth sailing for cruise companies until then.
