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Carnival CEO Sees 2 Troubled Years Coming for Cruise Lines

By Rhian Hunt - Mar 15, 2021 at 1:03PM

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The cruise company also appears reluctant to enforce full vaccination on all voyages.

Arnold Donald, the CEO of cruise company Carnival Corporation (CCL -3.31%) (CUK -3.32%), said yesterday the entire seaborne getaway sector his company operates in likely won't recover to pre-pandemic levels for roughly two years. Speaking with The Financial Times, the executive remarked he hopes the government won't impose "undue restrictions, constraints, [or] disadvantages ... on the cruise industry versus the rest of travel and tourism," after the big ships attracted intense media attention given their role in COVID-19's early spread.

Donald noted Carnival's entire remaining fleet of cruise ships may be operational again by 2021's end, but coaxing passengers on board again in previous numbers may take time. He also pointed out the company's fleet is 17.75% smaller, with 19 ships sold off or otherwise taken permanently out of service during the pandemic, likewise probably slowing the normalization of revenue.

A rendering of a cruise ship in the water next to a blue coronavirus virion.

Image source: Getty Images.

The company probably won't require vaccinations against COVID-19 as a general prerequisite for boarding, he said, but may make the jab mandatory for those cruises favored by seniors.

It's unclear how controversies surrounding the vaccines might delay sailings generally for cruise companies. Italian health officials banned use of a specific batch of AstraZeneca vaccines after two middle-aged men died immediately after getting the shot. A 28-year-old woman in Beloit, Wisconsin, died of a brain hemorrhage in February several days after receiving a Pfizer vaccine.

Such news could add to considerable reluctance among some Americans to receive the mRNA vaccine, potentially hinting at why Carnival hasn't yet committed to full vaccination on all voyages. This contrasts with its competitor, Royal Caribbean (RCL -3.52%), which recently highlighted its upcoming "fully vaccinated" sailings from Israel

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Stocks Mentioned

Carnival Corporation Stock Quote
Carnival Corporation
CCL
$13.13 (-3.31%) $0.45
Royal Caribbean Cruises Ltd. Stock Quote
Royal Caribbean Cruises Ltd.
RCL
$55.41 (-3.52%) $-2.02
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$52.47 (3.59%) $1.82
Carnival Corporation Stock Quote
Carnival Corporation
CUK
$12.23 (-3.32%) $0.42
AstraZeneca PLC Stock Quote
AstraZeneca PLC
AZN
$10,494.00 (2.38%) $244.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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