What happened

As trading starts to wind down for Tuesday, Aug. 16, shares of cruise line stocks are winding back up. As of 3:35 p.m. ET, Norwegian Cruise Line Holdings (NCLH 2.76%) stock is sporting a 3.2% gain, followed by Royal Caribbean (RCL 1.45%), which is rising 3.7%. Leading the whole pack higher, meanwhile, is industry bellwether Carnival (CCL 2.37%), up 4.6%.

And indeed, it turns out that Carnival is the source of today's good news -- because Carnival has announced it's sailing in the wake of Norwegian Cruise Line and changing its COVID-19 policies to attract more customers.

So what

Last week, Norwegian announced that it's revising its SailSAFE health and safety protocols to "further align the Company to the broader travel, leisure and hospitality industry worldwide." Henceforth, guests under age 12 can board Norwegian ships without proving either vaccination or negative COVID-19 test results. Guests over the age of 12 who have been vaccinated will not have to present a negative COVID-19 test in order to board -- and unvaccinated guests will be able to board if they present a negative test. (Debarking may be a different question, however, as local regulations at Norwegian's ports of call will vary.)  

Taking a cue from its rival, Carnival announced on Friday that it's adopting a similar policy, with the main differences being that Carnival is setting the age limit at 5 -- meaning that 5-year-olds and under are not required to provide proof of vaccination or negative test results -- and exemptions from vaccine and testing requirements apply only for passengers sailing on cruises of 15 or fewer days. Otherwise, Carnival is basically on board with the program laid out by Norwegian. (Which means Royal Caribbean's analogous announcement is probably just over the horizon.)    

And now here's the best news for investors in cruise stocks: Carnival announced today that on the very first trading day after it lifted its COVID-19 restrictions, booking activity was "nearly double the level for the equivalent day in 2019."  

Now what

Is that a propitious sign for Carnival's return to profitability? Three days after Carnival makes it easier to cruise, Carnival's booking numbers suddenly shoot higher? Perhaps.

Carnival seems to be interpreting this surge in bookings as further evidence that its bookings through the end of this year will be "very solid" after a summer that is already showing signs of "strong occupancy" aboard Carnival's cruise ships. And management thinks that easing COVID-19 protocols now will encourage vacationers to snap up its remaining 2022 inventory, and that this momentum will keep going into 2023. As Carnival commented, "pent-up demand for Carnival has not been satisfied and guests are responding very favorably to our updated protocols."  

That all sounds logical, but it leaves open the question of whether bookings will rise fast enough, and whether cruise prices will also rise enough to overcome the enormous debt burdens that Carnival (and Royal Caribbean and Norwegian, too) have taken on during the pandemic, such that any of these three companies can pay the interest on their debts and turn profitable again anytime soon.

For what it's worth, analysts polled by S&P Global Market Intelligence see an outside chance of Royal Caribbean inking a profit as early as next quarter -- but then losing money again in Q4. Norwegian and Carnival investors, on the other hand, will likely have to wait at least until Q2 2023 until they see their companies turn profitable once again.

No matter how optimistic you are about cruise stocks, it's hard to imagine one day's bookings numbers changing that bleak prospect.

Editor's note: This article has been corrected. The World Health Organization declared COVID-19 a pandemic in March 2020. The 2019 numbers Carnival reported were pre-pandemic.