Today, cruise stocks are seeing a very green day. Leaders in this sector such as Carnival (NYSE:CCL), Norwegian Cruise Lines (NYSE:NCLH) and Royal Caribbean (NYSE:RCL) are all up around 7% at the time of writing.
Today’s move is indicative of a few announcements that suggest cruises could resume sooner than expected. For a cruise line industry that has been absolutely hammered by the pandemic, this is welcome information.
Today’s price action for cruise stocks is also in sharp contrast to recent moves in this sector. Increasing bearishness has crept into these three names of late, amid concerns that the timeline for the reopening of the industry could be delayed. Previous concerns around the U.S. public health emergency being extended led to speculators selling off cruise stocks, as they saw a restart before the Nov. 1 Conditional Sail Order deadline unlikely.
How times have changed.
Let’s dive into today’s announcement and what it means for investors in these stocks.
Two Announcements Lift Cruise Stocks
Today, the U.S. Senate announced plans to allow for Alaskan cruises once again. Due to a Canadian cruise ban currently in place, cruise ships are not allowed to dock at Canadian ports. Due to long-standing regulations requiring a foreign stop when traveling across foreign waters, such a stop has been deemed necessary. The U.S. Senate has passed legislation that would temporarily relieve this regulation.
Such a move would once again permit cruises to continue sooner than expected. That is, assuming Canadian regulations remain in place as they are expected to. Those looking forward to an Alaskan cruise have something to cheer today.
This announcement comes on the heels of yesterday’s comments from the CDC that cruises may be able to hit the waters once again as early as mid-summer. As vaccination rollouts accelerate and cases drop, the hope is that cruises can be resumed in a safe fashion.
Recent reports note that the estimate for when cruises may be allowed has fluctuated significantly. Accordingly, cruisegoers and investors may want to take this news with a grain of salt.
That said, these developments are certainly bullish for a sector that has felt so much pain of late. There appears to be a tremendous amount of pent-up demand for cruise travel. Accordingly, it appears the market is fast-tracking when earnings may start rolling in for these three large cruise line operators.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
