UBS expects that the return of cruising in North America will take place a bit later than originally believed, however the industry’s recovery will be strong upon restarting.
According to UBS analysts Robin Farley, Arpine Kocharyan and Scott McConnell, the U.S. restart is more likely to happen in late Q3.
The analysts added that while the near-term outlook has gotten worse, the longer-term outlook seems better as vaccines become more widespread than what originally factored into estimates.
More specifcally, the analysts predict a slow 12-month startup period, with no more than 10% of capacity in use in the first quarter of operations.
Additionally, there may not be enough to meet customer demand. As the analysts says, despite the fact that is going to be a difficult restart period, demand is expected to surpass supply, as there will be limited supply at first.
Nevertheless, that imbalance could positively affect pricing and booking after a long dry spell for the cruise lines,.
Finally, as older tonnage gets disposed of, the three top cruise line operators – Carnival Corporation, Royal Caribbean and Norwegian Cruise Lines – will likely see their operating margins improve.
