What happened

Royal Caribbean Cruises (RCL -4.37%) shareholders outperformed a rising market last month. Shares soared 44% in February compared to a 2.6% gain in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally added to gains investors have seen in the cruise ship giant's stock in the past year, but shares are still trailing the wider market since the start of the pandemic.

A retired couple on a cruise.

Image source: Getty Images.

So what

Royal Caribbean, along with its industry peers, remains under a near total operating pause. The consumer discretionary company in late February revealed that revenue plunged to just $34 million in the fourth quarter compared to $2.5 billion a year earlier. Total sales for 2020 were down over 80% due to restrictions on cruises put in place because of the pandemic.

But investors still found reasons to be optimistic in the coming rebound, given that bookings are rising for late 2021 and fiscal 2022.

Now what

Royal Caribbean said last month that bookings for next year are back to normal trends even though the company spent next to nothing on marketing and advertising. That fact suggests there could be a sharp demand bounce once the COVID-19 threat passes. But until then, the business will need to fund operations using debt, which it has for roughly a full year now.