Shares of cruise operators surged on Monday after Norwegian Cruise Line Holdings Ltd said it would restart trips from U.S. ports in July with mandatory COVID-19 vaccinations for those onboard, bringing renewed hope to the ravaged industry.
The company’s announcement follows the U.S. Centers for Disease Control and Prevention’s (CDC) latest guidance last week to the cruise ship industry, including the need for COVID-19 vaccinations.
Shares of Carnival Corp, Norwegian Cruise and Royal Caribbean were up more than 4% each on Monday. Last year, all three companies lost about a half of their value.
The CDC’s restrictions on sailing to curb the spread of the coronavirus had wrecked the industry, with fewer trips resulting in heavy annual losses, plunging revenue and billions of high-interest-rate debt.
The companies had pleaded for new guidance, saying the “lack of any action by the CDC has effectively banned all sailing in the largest cruise market in the world.”
To safely resume operations, Norwegian Cruise and Royal Caribbean, which is preparing to resume some trips in the Caribbean in June, have also set up an expert panel to ensure safety for those onboard.
“We believe that through a combination of 100% mandatory vaccinations for guests and crew and science-backed public health measures ... we can create a safe, ‘bubble-like’ environment for guests and crew,” Norwegian Cruise’s Chief Executive Officer Frank Del Rio said.
In a letter to the CDC, Norwegian Cruise said it will begin trips at a reduced capacity of 60%. It then plans to gradually ramp up its fleet departing from U.S. ports and increase capacity by 20% every 30 days.
Royal Caribbean said it was “reviewing and studying the updated technical guidance” and believes current trips in other parts of the world show it can responsibly resume operations in the U.S.
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