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Shares in cruise operators start to rise as potential early vaccine beneficiaries
Certain travel stocks with relevance to cruises have enjoyed a new lease of life as investors bet on them being early beneficiaries of the Covid vaccine rollout.
Cruises are typically popular among people in retirement and vaccines are now widely being administered to those in their 70s and 80s in the UK. However, reports suggest Saga (SAGA), Carnival (CCL) and TUI (TUI) are among the cruise operators to have seen a spike in bookings from over-50s in recent weeks, suggesting that many people are arranging holidays ahead of receiving the vaccine.
The Government hopes to have vaccinated all over 50s, as well as all 16 to 64-year-olds with underlying health conditions, by the end of April.
Shares in two of the stocks are up year to date, with TUI – which owns the Marella Cruises and TUI River Cruise lines – jumping 38.6%, while Saga shares have gained 14.7%. Carnival is trading nearly 4% lower while overseas-listed cruise operators Norwegian Cruise Lines is flat this year and Royal Caribbean’s shares are down 2.4%.
In contrast some other package holiday providers on the UK stock market which aren’t involved in cruises have barely moved, such as Jet2 (JET2:AIM) which is flat year to date and On The Beach (OTB) which is up a mere 1.5%.
Despite renewed signs of activity in the travel sector, there are still some concerns that the pace of the vaccinations won’t be fast enough to let everyone go on foreign summer holidays this year.
UK foreign secretary Dominic Raab has been among the politicians to urge the public not to book summer holidays just yet as it is ‘hard to see’ when restrictions will end, while prime minister Boris Johnson has warned of the threat of as yet unknown ‘vaccine-busting’ coronavirus variants that could develop in other countries.
Senior figures in the global airline industry, including the chief executives of Qatar Airways and Air Asia, have suggested passengers could be required to produce a vaccination certificate to be able to fly to other countries. If such a thing does get introduced, this could also impact the recovery in travel and holiday demand.