What happened
Carnival Corporation (CCL -0.42%) stock got another bump higher Tuesday morning, rising 2% as of 11:20 a.m. ET.
You can probably thank the Cruise Lines International Association (CLIA) for that.
Image source: Getty Images.
So what
Last week, the U.S. Centers for Disease Control delivered a punch in the gut to Carnival's business, warning would-be cruise travelers to "avoid cruise travel, regardless of vaccination status" because it was detecting "increases in cases onboard cruise ships since identification of the omicron variant."
That sounds pretty bad. But as Florida Today reported yesterday, CLIA -- the trade organization representing cruise companies like Carnival -- has taken the CDC's sour warning and turned it into sweet-sounding lemonade.
On the one hand, yes, out of 95 cruise line ships currently carrying passengers in U.S. waters, three are listed at "orange" status, indicating they have "reported cases of COVID-19" on board, and 91 are at "yellow" status, indicating that at least 0.1% of passengers on board, or at least one crew member, suffer from "COVID-19 or a COVID-19-like illness." And out of these 95 ships, only one is listed in "green" condition, indicating there is no evidence of COVID-19 aboard. (Fifteen other ships with no passengers on board are also listed as "green.")
But according to CLIA, this news is actually good news.
How does CLIA come to this conclusion? "Cases identified on cruise ships consistently make up a very slim minority of the total population onboard," explains CLIA, and COVID-19 cases aboard cruise ships are in fact "far fewer than on land."
Logically, therefore, the "highly controlled environment" maintained aboard cruise ships means that while "no setting can be immune from this virus," it seems that boarding a cruise ship actually "provides one of the highest levels of demonstrated mitigation against the virus."
Now what
Now, I suppose that's one way of looking at the data -- and indeed, judging from investors' happy reaction to CLIA's press release, it appears that cruise ship investors are in fact feeling reassured by CLIA's hypothesis that your best chance of avoiding COVID-19 might be to board a ship and sail away from it.
Still, the fact remains that this is not the official view of the U.S. government and the CDC. So long as they counsel against cruising -- and retain the ability to impose another "no sail order" forbidding cruising -- I see a whole lot more risk than reward in cruise stocks.
