Coronavirus concerns loom over cruise industry

The rapid spread of the coronavirus disease is taking a toll on the $46 billion global ocean cruise industry. Many see Asia as a potential growth area for cruise tourism

A view of the Norwegian Jewel cruise ship docked at Circular Quay in Sydney, New South Wales, Australia, 14 February 2020

di Saqib Iqbal Ahmed, Uday Sampath Kumar

New York-Bengaluru - The rapid spread of the coronavirus disease is taking a toll on the $46 billion global ocean cruise industry.
Dominated by three U.S.-listed companies, Carnival Corp (CCL.N) (CCL.L), Royal Caribbean Cruises Ltd (RCL.N) and Norwegian Cruise Line Holdings (NCLH.N), the industry is under sharp scrutiny following the virus outbreak that has left one ship quarantined in Asia.
Many see Asia as a potential growth area for cruise tourism: 39 cruise brands were active in Asian waters last year, deploying a total of 79 ships, according to trade group Cruise Lines International Association.
The long-term impact of the virus on the industry is unclear and some analysts have cautioned investors against dumping cruise stocks.
“We remind investors not to hit the panic button, as in the year following SARS, H1N1, and Zika, Carnival and Royal both posted positive as-reported yield growth, conveying the resilience of demand across the industry,” Morningstar analysts said in a recent note.
Authorities on Friday reported 5,090 new coronavirus cases in mainland China and 120 additional deaths. Cases now total 63,851, with 1,380 fatalities.
Royal Caribbean Cruises on Thursday canceled 18 cruises in Southeast Asia after calling off eight trips to China last week. It joined industry leader Carnival in warning that full-year earnings would be hit by the epidemic.