Shares of cruise line operators are sailing higher on hopes a COVID-19 vaccine will allow a return to normalcy and send their cruise ships heading back out to sea. 

Carnival (CCL -3.40%) (CUK -2.87%), Norwegian Cruise Lines (NCLH -3.96%), and Royal Caribbean (RCL -2.24%) have all rearranged their finances to allow them to ride out the storm, even as they extend suspensions of any voyages further into the year. Depending on the operator, the earliest passengers will be embarking in May or June.

Yet even if the cruise lines do manage to meet their current sailing schedules, investors should still use caution. Voyages won't be returning en masse right away, and those ships that do shove off from land will not be at capacity.

Cruise ship stocks may still be well off the highs hit before the pandemic struck, but that doesn't mean it's smooth sailing from here.

Lightning bolt from approaching storm near cruise ship

Image source: Getty Images.

Anchored in port

Norwegian Cruise Line just announced it was delaying once again the departure of cruises aboard three brands. Voyages aboard the Norwegian, Oceania, and Regent Seven Seas brands were all postponed through the end of May 2021.

Other cruise lines have gone even further. Carnival's Princess brand cancelled cruises longer than seven days until November (the U.S. Centers for Disease Control currently prohibits cruises over seven days under its conditional sailing order).

Canada recently ended the possibility of any cruises leaving its ports before March 2022.

Although there are cruises taking place here and there, it's mostly in Asia. Royal Caribbean, for example, began sailing again from Singapore aboard the Quantum of the Seas back in December, but it was open only to residents of Singapore and long-term pass holders.

The lack of any significant revenue, while still having all the attendant expenses of maintaining the ships and crew, has wrecked cruise operator finances.

Laboring under a heavy load

Carnival recently had to visit the debt financing well for the fifth time since the pandemic started, raising nearly $600 million. It follows a $1 billion financing trip in November, and has led credit rating agency Moody's to say Carnival's debt rating could sink deeper into junk territory.

Similarly, Royal Caribbean just negotiated a restructuring of nearly $4.5 billion worth of debt so that it would violate covenant restrictions on the loans. Its lenders waived compliance until after the third quarter of 2022, but also prohibited the cruise operator from paying any dividends or buying back any stock during the waiver period.

Without question, these maneuvers give the cruise ships breathing room and will allow them to survive the storm, but surviving is not the same as thriving. Carnival is now over $22 billion in debt, Norwegian has more than $10 billion in debt, and Royal Caribbean has almost $18 billion.

It's why the prospect for a widely distributed and administered COVID-19 vaccine provides hope for an eventual recovery. Yet even putting out to sea again might not be enough.

Still stormy seas

Even though the CDC's conditional sailing order allows for a phased restart of cruises from U.S. ports, the industry keeps pushing back its sail dates. That's because there are no real standards and protocols yet for what constitutes safe sailing, and though cruise lines will implement temperature checks, COVID-19 testing, social distancing, and more, there is a long time to go before any of that is used on a widespread basis.

Vaccinations are going to be necessary for passengers to really feel comfortable being confined at sea with others. While some companies have indicated it will be mandatory for crews to be vaccinated, it's still up for debate whether cruise lines will require passengers to also get the vaccine.

Once all of these measures come together, cruising will be deemed safe by consumers. Until those pieces fall into place, however, bets on recovery are more of a gamble than an investment, and the payoff won't be until next year at the earliest. 

Investors would be better off being landlubbers than bidding up shares of cruise line stocks.