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Highlights
- The recent rise in Omicron variant cases across the globe is adversely impacting the cruise line companies and is likely to derail the industry recovery.
- The outbreak of the virus is another blow to the industry, which is still not fully recovered from the past travel restriction and no-sail order in different countries.
The recent rise in Omicron variant cases across the globe is adversely impacting the cruise line companies and is likely to derail the industry recovery. In the last few months, the cruising industry showed signs of recovery after the restart of operation in almost all countries. In the United States, cruise operations started just a few months ago. However, the recent rise in Omicron variant cases has sparked concerns leading to a temporary ban on cruising in the US.
The US-based agency Centers for Disease Control and Prevention (CDC) revealed in its investigation that over 85 cruise ships are having active cases of coronavirus despite onboard safety measures. As a precautionary measure, many vessels were turned away from ports in the Americas.
The recent outbreak of the Omicron virus will be another blow to the industry, which is still not fully recovered from the past travel restriction and no-sail order in different countries. Moreover, many companies have taken tons of debt to remain functional during the pandemic period.
Let us look at some cruise line companies that are impacted by the emergence of Omicron:
Carnival Plc (LON: CCL)
FTSE250 listed company provides its cruise line services through a fleet of more than 100 vessels. It is one of the largest cruise line operators worldwide. The company said most of its itineraries are unchanged despite the surge in Omicron variant cases.
However, to curb the spread of the virus, many ports are changing protocols and not allowing passengers to land on ports from ships carrying active coronavirus cases. The company said it is actively monitoring the current situation and looking for alternative destination ports if its ships are forced not to land on the port.
Carnival Plc’s last close was at GBX 1,462.40 on 24 December 2021, with a market cap of £2,704 million.
TUI AG (LON: TUI)
The company operates in the travel and tourism sector. It has a fleet of 16 cruise lines and owns and manages hotels and resorts under various brand names. The company has diversified operations across multiple sub-segments like airlines, hotels, and cruise lines.
The company’s cruise line division operated 14 out of 16 fleets during the fourth quarter of the financial year ended 30 September 2021. It reported an occupancy rate of 39% to 53% across different brands. However, the recent rise in the Covid-19 cases might impact the operation.
TUI AG’s last close was at GBX 247.50 on 24 December 2021, with a market cap of £4,016 million.
Royal Caribbean Cruises Ltd (LON:0I1W)
The company operates and manage different cruise line brands. The recent rise in coronavirus cases impacted cruise line operations after 55 Covid-19 positive cases were confirmed on board. As a result, the company’s Odyssey of the Seas cruise line was diverted from its planned stops and returned to port Everglades
