Email of the day on post pandemic recovery candidates
Comment of the Day

June 03 2021

Commentary by Eoin Treacy

Email of the day on post pandemic recovery candidates

Dear Eoin I hope that your move went well. The chart of Carnival (CUK in the USA) is making an interesting breakout. It is a classic example of a company that suffered greatly from Covid and that has a great recovery potential.

Eoin Treacy's view

Thank you for this question which may be of interest to the Collective. Thanks also for the well wishes. We are settling in nicely.

Cruises were either the bargain of the year or a boondoggle for consumers in December. I had brochures arriving at my home offering buy one get one free and thousands in onboard credits and shore excursion for sailings into 2022. I thought of it as a value proposition. The rest of the family were not so keen.

That reluctance to venture back onto ships which were some hothouses of COVID-19 infections represents a headwind for the cruise sector which will take time to recover from. That’s particularly true because new strains continue to pop up and spread in some of the primary destinations cruises stop at.

That’s why Carnival has lagged in its recovery. The news today that test cruises are about to begin is a significant development and suggests there is scope for catch up with the wider travel and tourism sector. Royal Caribbean will be conducting two test cruises and its share has recouped most of the pandemic downdraft.

Speculating in this portion of the market implies a believe the threat from new variants will be contained and that the new normal will be annual booster shots. I believe that is the most likely scenario going forward.

Back to top

You need to be logged in to comment.

New members registration