What happened
It doesn't take a stock market expert to tell you why Norwegian Cruise Line Holdings (NCLH 5.39%), Carnival Corporation (CCL 3.57%), and Royal Caribbean (RCL 3.55%) stocks are sinking today. Down 4.1%, 3.4%, and 3.3%, respectively, as of 10 a.m. ET, they're reacting to a Washington Post story over the weekend that described cruise ships as -- I kid you not -- a "petri dish" for COVID-19.
It seems cruise stock investors didn't want to hear that.
Image source: Getty Images.
So what
In a front-page article that called out two of the three big cruise lines by name -- only Norwegian Cruise was spared that indignity -- the Post related that multiple cruise ships are currently sailing around the Caribbean Sea, unable to dock because ports won't let them in.
"Although vessels that have resumed cruising have beefed up coronavirus precautions," notes the Post, "the rapid spread of the Omicron Variant" of COVID-19 is defeating their best efforts. "Dozens" of ships are now "under investigation or being monitored by the CDC" because of coronavirus outbreaks on board.
Now what
I wish I could say this is surprising -- but it isn't. As one traveler interviewed by the Post pointed out, "The elevators are full, the Jacuzzis are full, the swimming pools are full, the theaters are full, the dining rooms are full. ... Everywhere you go there's a lot of people. And it's very difficult to avoid [COVID-19] on a cruise ship."
Put more simply: "Petri dish."
Every boat afloat holds the potential to let loose COVID-19 within a captive population of potential hosts, and once that happens, it's pretty much a given that dozens of people -- at least -- will get sick.
The result for cruise stocks is just as obvious: Customers are starting to cancel cruises. And in a related story, NPR reports today that the airline industry isn't escaping unscathed, either. "Thousands of domestic and international flights were canceled over the Christmas weekend" as the number of new cases of COVID-19 in the U.S. topped 197,000 on Friday, and White House Chief Medical Advisor Dr. Anthony Fauci says that cases will only continue to rise.
It's looking like it's going to be another long, cold winter for travel investors.
