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Cruise stocks were up at least 5% in early trading even as one Wall Street analyst said Friday’s update of the CDC’s conditional sailing order for cruise ships “fell short of expectations for the industry and investors.”
The Centers for Disease Control and Prevention’s update did not specify when sailing out of U.S. reports will resume.
“With no timing component, and only incremental in nature, this update disappointed the industry,” observed Brandt Montour of
in a research note.
The cruise stocks, however, climbed Monday amid a rally for the broader market.
The cruise operators have been largely shut down since March 2020 due to the pandemic, though there have been limited sailings in regions such as Asia and Europe.
Separately, in a letter to the CDC on Monday,
Norwegian Cruise Line Holdings
(ticker: NCLH) CEO
Frank Del Rio
said the company will require “100% vaccination of guests and crew during initial relaunch consistent with CDC guidance on international travel.”
Norwegian believes that requiring vaccinations of guests and crew “shares in the spirit and exceeds the intent of the CDC’s Conditional Sailing Order (“CSO”) to advance mutual public health goals and protect guests, crew and the communities it visits,” according a release outlining the letter to the CDC.
It adds that Norwegian is “optimistic the CDC will agree that mandatory vaccination requirements eliminate the need for the [conditional sailing order] and therefore requests for the lifting of the order for Norwegian’s vessels, allowing them to cruise from U.S. ports starting July 4.”
The CDC’s update of its conditional sailing order called on the cruise companies to incorporate vaccinations into their plans but stopped short of requiring vaccinations.
In his research note Sunday, Montour wrote that he saw the CDC’s update “as a modest negative for [cruise] shares near term, as this update fell short of our and investor expectations, and the eventual timing of a restart seems slightly less certain now than it did two weeks ago”–though it was uncertain at that time as well.
Even before the CDC’s update Friday, he added, investors had “already ratcheted down expectations for meaningful sailing capacity this summer and the exact timing of a restart hasn’t been top of investors’ minds since January/February (before bookings started rebounding).”
He maintains that investors are more focused on results in 2022 and 2023.
Write to Lawrence C. Strauss at lawrence.strauss@barrons.com
