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In a late-breaking, mid-afternoon announcement, the Cruise Lines International Association (CLIA), the trade association that represents all of the major cruise lines– and more relevantly, all of the blue-chip cruise line brands owned by openly traded Carnival Corporation( NYSE: CCL), Royal Caribbean( NYSE: RCL), and Norwegian Cruise Line Holdings( NASDAQ: NCLH)— simply revealed a longer suspension of travelling.
Specifically, CLIA revealed that “the association’s ocean-going cruise line members will voluntarily extend the suspension of cruise operations from U.S. ports up until 15 September 2020.”
Image source: Getty Images.
As the association described, the U.S. Centers for Illness Control and Prevention (CDC) has actually already first issued, and then extended till July 24, a no-sail order that needs each of the significant cruisers to keep its ships in port until the order is raised.
The CDC has not yet revealed a 2nd extension of its order. Regardless, CLIA observes that “although we had actually hoped that cruise activity could resume as soon as possible after that date, it is progressively clear that more time will be required to resolve barriers to resumption in the United States.” Accordingly, deciding that “it is proper to err on the side of care,” the association’s members state they have actually extended their suspension of cruises voluntarily. Lending color to the import of the announcement, CLIA notes that every day the cruise industry in America is closed down costs the economy “around $110 million in financial activity.” The total expense of this extra 53- day delay to the American economy, for that reason, would be around $5.8 billion.
The expense to cruise business’ stocks is even more immediate. Since 2: 05 p.m. EDT, 15 minutes after the news broke, Carnival stock was currently down 6.7%, Royal Caribbean 7%, and Norwegian 7.5%.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.
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Rich Smith has no position in any of the stocks discussed. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy