If you live near a port on the ocean, one of the biggest economic activities in the community has been the rise of people going to sea for an adventure. In most cruises, the ships sail through the evening and land at a port during the daytime. When the cruise ship arrives upwards of a 1,000 people go into the community to spend money and on shore some logistics on fuel, food and garbage are taken care of. For the host community cruise ships are a welcome sight.
In an article by Adriana Gomez Licon and Marta Lavandier of the Associated Press, the first cruise ship left Fort Lauderdale which is just north of Miami and has a wonderful port.
The big 3 companies in the cruise ship industry are Carnival, Norwegian and Royal Caribbean which all have branded names in ships. One of Royal Caribbean brands is Celebrity Cruises which unveiled Celebrity Edge which costs $1 billion in December 2018 and it was the first ship to set sail in 15 months.
The Port at Fort Lauderdale is called Port Everglades and the Governor noted the port lost more than $30 million in revenue in fiscal year 2020.
During the 15 months shutdown the big 3 companies had to raise $40 billion in financing just to stay afloat. Collectively they lost $20 billion last year and another $4.5 billion in the first quarter in 2021 according to SEC filings.
The good news for the cruise industry is according to an interview by President Arnold W Donald, President and CEO of Carnival Cruises, the world’s largest leisure travel company, they have 8 million people who are repeat cruisers. There should be and is a large pent up demand to cruise when people feel safe to do so.
Linking to dividend paying stocks, in a downturn profitable companies which can pay a dividend have the ability to bounce back at higher levels because of the many assets they have and can draw upon. As you do your research, you can determine how well the assets are being used.
There are more questions than answers, till the next time – to raising questions.