CDC Updates Cruise Guidelines to its Highest Level of Concern, Sending Cruise Stocks Tumbling

Miami, FL, USA - January 7, 2021: Cruise ships stopped at the port due to the global crisis of the Coronavirus epidemic (COVID-19) in the Port of Miami, one of the busiest ports in the United States.
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The Centers for Disease Control and Prevention (CDC) issued an update to its guidelines for cruises on Dec. 30, telling Americans to “avoid cruise travel, regardless of vaccination status,” according to a statement on its website. The new guidelines sent the shares of several cruise lines tumbling.

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Bloomberg reports that shares of Carnival Corp., Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. fell on the news. COVID-19 cases have been reported on 94 cruise ships in U.S. waters, and nearly all of those outbreaks have met the threshold for a formal investigation by the CDC.

The CDC’s guidance is at its highest, level 4, reflecting increases in cases onboard cruise ships since the identification of the Omicron variant, according to the statement.

“The virus that causes COVID-19 spreads easily between people in close quarters on board ships, and the chance of getting COVID-19 on cruise ships is very high, even if you are fully vaccinated and have received a COVID-19 vaccine booster dose,” according to the statement.

“Omicron is having a big short-term impact on everyone, but many observers see this as a major step towards COVID-19 becoming endemic rather than epidemic,”  Richard Fain, Royal Caribbean Group Chairman and CEO said in a statement. “We are constantly learning and adjusting as Omicron appears to be ushering a new phase in the fight against COVID-19. We expect these factors to have a negative impact in the short term but are optimistic they will lead us to a more pervasive but less severe health environment. Taken together, this should enable us to produce a strong transitional year in 2022 and a very strong 2023.”

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Patrick Scholes, a travel and leisure analyst at Truist Securities, told Barron’s that the CDC’s action comes at an especially bad time for the cruise operators.

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It’s a very inopportune time to have that happen because we are going into the big selling season,”  Scholes told Barron’s. “It’s going to hurt, the degree of which we don’t know yet. But there’s absolutely nothing good coming out of that announcement by the CDC.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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