National Post (National Edition)
Cruise line stocks plunge as Hurricane Irma threatens
• Carnival Corp., Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. all tumbled in Tuesday trading as Hurricane Irma threatened to do to the hub of the cruise industry what Harvey did to the U.S.’s oil and gas capital last week.
Irma, a Category 5 hurricane, is on a path that could take it through the heart of the Caribbean, bringing winds of as high as 290 kilometres per hour (180 mph) to Puerto Rico, the Virgin Islands, and Haiti before making landfall this weekend in Florida. The Caribbean accounts for 35 per cent of the cruise industry’s global, ocean-going capacity, and all three of the largest carriers are headquartered in Miami. Among the countries potentially hit by the storm is Cuba, a new and fast-growing market for U.S. cruises.
Cruise line operators are monitoring the storm, cancelling voyages that haven’t left port and rerouting other ships to avoid stops at islands that may be affected. A seven-day cruise on the Carnival Glory that left Miami on Saturday, for example, has cancelled stops in St. Thomas; San Juan, Puerto Rico; and the Turks and Caicos in favour of western Caribbean destinations such as Mexico and Belize. Irma is currently about 200 miles east of the island of Antigua.
Carnival shares fell as much as 4.6 per cent to US$65.95 in New York, the worst performance this year. Royal Caribbean was down 5.2 per cent, and Norwegian slid 5.5 per cent.
Hurricane Harvey caused widespread damage when it hit the Houston area Aug. 25, taking almost a fifth of U.S. oil refining capacity off-line. Cruise lines redirected some voyages and kept some ships at sea to avoid that storm. The storm activity contributed to a softening of demand for cruises in August, Morgan Stanley said in a note Tuesday.
Royal Caribbean cancelled two sailings to the Bahamas scheduled to depart Friday. The company is reimbursing passengers for their fares and giving them a 25-per-cent credit toward future bookings. More updates on cruise itinerary changes are expected, the company said.
Carnival, the world’s largest carrier, is also prepping its call centre and support staff for a possible landfall in Florida. “Fingers crossed for the storm to take a sharp right-hand turn north,” Carnival spokeswoman Jennifer De La Cruz said in an email.