Carnival will launch its first cruise from a US port since last year
The Carnival Vista is scheduled to depart on Saturday afternoon from Galveston, Texas, marking Carnival Cruise Line’s first U.S. cruise since the pandemic halted operations.
The weeklong cruise is expected to visit Roatan, Belize and Cozumel. Passengers on board must show proof of vaccination or be pre-approved for exemption by Carnival, which follows strict guidelines.
The next day, his ship Carnival Horizon will leave Miami.
The cruise industry is one of the last sectors to return to pre-pandemic operations. The Centers for Disease Control and Prevention recently allowed her to resume sailing with strict safety protocols, aimed at preventing the spread of Covid-19 on board. When the pandemic began, there had been several high-profile outbreaks on ships.
Royal Caribbean Cruises was the first cruise line to sail a ship from a U.S. port since the pandemic began when its Celebrity Edge ship departed Miami last Saturday.
Carnival’s next cruise from a U.S. port is the Carnival Breeze, which is scheduled to depart Galveston on July 15.
But the industry remains on its guard. The highly infectious delta variant is causing further blockages in other countries where vaccination rates are still low. Even in the United States, where more than half the population is vaccinated, the Delta is quickly becoming the most important strain of coronavirus. For weeks, new cases of Covid were on the decline, but this highly infectious variant is starting to turn the tide.
Australia offers another example. He had kept Covid cases under control for months, but the country is now seeing new cases erupt in several regions. To limit the spread, new restrictions are put in place. As a result, Carnival has canceled its Princess cruises to and from Australia until December 19, citing continued uncertainty over whether to resume cruises in the region as its decision.
Earlier this week, Royal Caribbean changed its vaccination policy for all cruises except those departing from Florida. The company has had two unvaccinated guests under the age of 16 who tested positive for Covid. Now, he wants all unvaccinated guests departing from Florida ports to have travel insurance.
Industry analysts predict a slow recovery for cruise lines and several challenges ahead due to the international nature of cruises.
Carnival’s stock has risen more than 20% this year, bringing its market capitalization to just over $ 30 billion. However, the title has lost ground in recent exchanges. It closed at $ 26.06 on Friday, about 17% below its 52-week high of $ 31.52, which it reached on June 8.
“We believe the cruise industry will be one of the slowest sub-sectors to recover from Covid-19. Cruising needs not only international travel to return, but also ports to reopen, authorities to clear the cruise and return customer confidence, âMorgan Stanley analysts Jamie Rollo said in a research note Thursday. “The risks increase that further travel restrictions will be imposed as the delta variant spreads and we approach winter flu season.”
Rollo reiterated its underweight in the stock and lowered its guidance for this year and next due to a slower-than-expected recovery in cruises and expectations of higher cash consumption and fuel costs. higher, net of refinancing and share swap benefits.
As for future cruise bookings, although Carnival described pricing as strong in its second quarter results, only a portion, which Rollo says is around 25%, from 2022 is currently sold. Analysts also estimate that about half of bookings in 2022 come from customers re-renting canceled cruises and using their credits.
âSo there is a fair amount of 2022 left to sell, and it might be misleading to extrapolate from the few cash bookings made to date,â Rollo said. “Additionally, the initial rollout of cruises is primarily domestic and short-term, representing less cost-effective itineraries than more exotic / international cruises which will take longer to recover.”
Due to the slower-than-expected pace of return, Carnival could be burning money until the third quarter of 2022, he said. Rollo therefore estimates that Carnival will only run at 18% of its capacity in the third quarter and 45% of its capacity in the fourth quarter of this year.
Argus, on the other hand, maintains a buy rating for the stock due to the company’s plans to resume operations in July. Reduced losses and increased bookings that reflect strong pent-up demand for cruise vacations are also contributing to the rating, analyst John Staszak said in a note released Tuesday.
Staszak said the pace of bookings was higher than bookings in 2019, despite limited publicity and marketing.
“In line with its cruise resumption plans, Carnival expects all of its ships to be deployed by spring 2022. As the number of COVID cases continues to decline, we are optimistic that management’s goals are achievable. “said Staszak.