What happened

Good news trumped bad news on Monday for investors in the cruise ship sector, with shares of Norwegian Cruise Line Holdings (NCLH -0.88%), Carnival Corporation (CCL 0.67%) (CUK 0.74%), and Royal Caribbean (RCL -0.66%) all jumping on positive news about Congress' $1.9 trillion stimulus package -- and the $1,400 stimulus checks that are already in the mail.

Shares of Norwegian Cruise Line stock are up 4.1% as of 11:20 a.m. EDT, Carnival Corporation is up 4.6%, and Royal Caribbean is up 5.3%.

3 cruise liner ships lined up abreast in port

Image source: Getty Images.

So what

On Wednesday last week, the U.S. House of Representatives passed the U.S. Senate's version of the $1.9 trillion "American Rescue Plan," which includes money to help states and localities bear the costs of the recession, provides money to help schools fund operations during the pandemic, extends unemployment benefits for the jobless, increases the value of child tax credits, and promises $1,400 stimulus checks for about 90% of all American adults and children. On Thursday, President Biden signed the plan into law.  

The $1.9 trillion stimulus package does not directly provide financial support for the cruise industry, but it does indirectly support the thousands of cruise industry employees who have lost their jobs due to the cruise shutdown. It also puts discretionary income in the pockets of potential cruise customers.  

Now what

Investors shouldn't expect even this huge influx of cash to bring the cruise industry back to health immediately. To the contrary, over the weekend, Carnival CEO Arnold Donald told The Financial Times to expect no return to pre-pandemic levels of revenue before 2023 at the earliest.  

In a plea to the Centers for Disease Control and Prevention, Donald said he hoped for "no undue restrictions, constraints, disadvantages ... on the cruise industry versus the rest of travel and tourism" as it works out the rules for a return to cruising (which has not been fully authorized yet). Even after cruising does resume, Donald warned that with nearly 20% of Carnival's fleet sold off during the pandemic, it's going to be a long while before the company has enough ships in the water to get back to where it was in 2019, revenue-wise. And even then, the task will remain to convince enough tourists that it's safe to board.

The good news is that Carnival says it now has enough cash in the bank to survive even a total ban on cruising until at least 2022. In fact, according to my latest calculations, Carnival has enough cash to survive all the way into early 2023, putting it in a better financial position than either Norwegian or Royal Caribbean.