What happened
The seas might be getting colder, but investors were generally very warm to cruise line stocks on Friday. Two of the industry's bellwethers, Carnival (CCL 1.13%) (CUK 0.88%) and Royal Caribbean (RCL 0.54%), rose nearly 2% above the waterline in their share-price increases that day. Their longtime rival Norwegian Cruise Line Holdings (NCLH -0.21%) settled for bringing up the rear, with a marginal (0.3%) decline.
So what
Norwegian's tepid performance aside, cruise line company shareholders were still basking in the glow of Royal Caribbean's third-quarter earnings release on Thursday.
That operator not only posted a bottom-line profit, it trounced analyst estimates in doing so. It was almost as if the heavy rain cloud hanging over the industry since the coronavirus pandemic began to lift.
Cruise lines were among the worst corporate casualties of the pandemic. Cruise ships, with their masses of customers and armies of staffs packed into limited spaces for notable stretches of time, are risky environments during pandemics. The near-complete shutdown of the industry really took a toll on Carnival, Royal Caribbean, Norwegian, and basically every other cruise operator.
Now what
No cruise line company, Royal Caribbean included, is now suddenly and magically sailing under a rainbow.
The industry still has numerous post-pandemic challenges to surmount, not least of which is the high piles of debt amassed from keeping its businesses afloat during the COVID-19 era. Yet it's clear that there's plenty of demand for travel generally and sea jaunts particularly, so the current flash of investor optimism is fully understandable.
