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Cruise line stocks, including NCLH, declined last week over concerns regarding the potential impact of the COVID-19 omicron variant on the global economy. Investors grappled with fears concerning a travel pullback as governments again restrict travel and tighten testing requirements. However, NCLH stock bounced back in its last trading session, gaining 9.5% in price intraday to close at $20.03. The rally was fueled by news regarding the possibility that the new COVID-19 variant might cause milder symptoms than previous COVID-19 strains. However, the World Health Organization warned that it is too early to understand the severity of the variant. “There was initial reports that it tended to be more mild, but it’s really too soon,” said Maria Van Kerkhove, WHO’s technical lead on COVID-19.
Previously, NCLH expected to return to profitability in the second half of 2022, because pent-up demand for leisure travel and the vaccination program were helping the cruise line operators recover from the pandemic. However, if the omicron variant drives another COVID-19 wave or current vaccines turn out to be less effective against the strain, it could take longer for NCLH to reverse its losses and improve its margins.
