The number of novel coronavirus cases has been on the rise worldwide since December 2019. The deadly coronavirus outbreak began in China and has been surging, which is proving damaging to various industries like aviation and cruise lines.
With the outbreak, shares for cruise liners, such as Norwegian Cruise Line, Carnival Corporation, and Royal Caribbean International, all major Miami-based brands that serve Chinese ports, dropped between 8% and 14%.
Four passengers on a Royal Caribbean cruise ship that docked in Bayonne recently were sent to the hospital after they were screened for the coronavirus. Later, one of the four was found positive for the flu.
Japanese authorities reported that the confirmed cases on a Princess Cruises ship quarantined south of Tokyo had surged to 61, which includes eight US citizens. Officials screened around 270 of over 3,700 passengers and crew on the ship that was anchored near Tokyo.
Another ship quarantined at sea is operated by Dream Cruises. With over 3,600 people onboard, the ship is isolated in Hong Kong as a precaution after three previous passengers tested positive for the virus.
The financial impact is still unknown, and the coronavirus is being compared with the 2003 SARS outbreak, which contributed to lower share prices for cruise line companies.
It is predicted that if the virus slows during February, and China sailings restart in March, then it would leave a lowered and still manageable drop in global demand. The downside case would be with cruises to China getting canceled through March, and China revenues slipping to 15% annually. The worst possible situation would be with the virus spreading and China cruises getting canceled through the summer, and share prices plummeting to 30%.
Most cruise ship brands are implementing widespread screening processes because of fears of prolonged impact. Ships should deny boarding to people who visited China, according to the policies. Princess Cruises said that crew members from China were prohibited from boarding ships until further notice. Health officials are following guidelines similar to those issued for Middle East Respiratory Syndrome.