To recap, by December 2019 the first reports of the novel coronavirus emerging from China began to emerge – and in late January 2020 the World Health Organization declared that a pandemic was underway. Cruise lines began canceling port calls in China.
In January 2020, the Diamond Princess, a luxury ship owned by Carnival, began an ill-fated voyage in Yokohama, Japan. More than 3,700 passengers and crew members were trapped on the ship for weeks, with little information about the pandemic.
But the virus continued to spread, and more than 700 The people eventually tested positive. In those early days of the pandemic, when people lacked natural immunity against the disease, and effective treatments and vaccines were not yet widely available, nine passengers died.
All major cruise lines suspended operations as passengers canceled their bookings en masse. It became clear that a cruise ship was not an ideal place to be in the midst of a pandemic.
In the stock market, cruise line shares declined as 2020 ended. In that pandemic year, Carnival dropped 57 percent, Royal Caribbean 44 percent and Norwegian 56 percent. The companies had virtually no revenue and debt was mounting, and their ability to remain as going concerns was in doubt. They survived by incurring huge debt and paying exorbitant junk-bond yields, which were necessary to attract investors.
The blissful atmosphere necessary for a successful holiday at sea seemed unattainable.
an early recovery
It was only in 2022 that their finances – and share prices – stabilized, and only this year did they begin reporting enough earnings and cash flow to show signs of reducing their debt and returning to stable profit-making operations. Is done. In a conversation with stock analysts after reporting earnings in late June, Carnival Chief Executive Josh Weinstein said the company’s business volume is approaching 2019 levels for the first time since the start of the pandemic and, in some metrics, , has started to exceed. This.
According to the transcript of the same session, David Bernstein, the company’s chief financial officer, said that Carnival is pouring cash into debt reductions that “will increase total debt reductions to more than $8 billion by 2026”, rising to $35 billion by early 2023. below the peak of the dollar. ,