Cruise line stocks jump after CDC shuts down Covid-19 program

NEW YORK, USA – JULY 10: Aerial view of the Norwegian Joy cruise ship sailing up the Hudson River in front of the Manhattan skyline at sunset in New York, USA on July 10, 2022.

Lokman Vural Elibol | Anadolu Agency | Getty Images

Shares of cruise lines, incl. Carnival, Royal Caribbean as well as Norwegian rose on Tuesday after the US Centers for Disease Control ended its Covid-19 program for cruise ships..

The CDC cruise ship program, which became voluntary earlier this yearrequired all passengers to be tested, encouraged staff and passengers to be vaccinated, and established specific quarantine procedures in the event of an outbreak.

The CDC said it will continue to provide advice on how to handle Covid-19 cases for cruise ships, but companies can now use their own strategies to mitigate the spread of the virus. This means that cruise lines can set their own rules regarding vaccination, testing and quarantine requirements.

Shares of Carnival rose about 7% on Tuesday to close at $10.36. Royal Caribbean shares rose nearly 6% to $36.36 and Norwegian shares rose about 3.5% to $12.85.

The CDC change is expected to give cruise ships more flexibility, allowing for more travelers on board and lower costs for the industry.

“While we fully expect cruise operators to continue to require passengers to be vaccinated before sailing,” wrote Steven M. Weczynski, an analyst at Stifel. “We believe today’s news will give cruise operators more flexibility to include young people.”

A spokesman for Royal Caribbean said the company is awaiting further guidance from the CDC before setting its own policy.

The cruise industry is shattered after the pandemic started and is currently working on restoring the business to pre-2020 levels.