Cruise Line Shares Up as Investors Anticipate U.S. Tourism to Cuba

Shares in the world's three largest cruise lines saw big gains this week as investors anticipated that improving relations between the US and Cuba could lead to new opportunities for tourism.

Cuba has long been off limits to most Americans, with US tourists to the country allowed under 12 tightly regulated categories of travel by the US government. The island nation is of great interest to the cruise industry, however, which is dominated in the Caribbean by American passengers.

Shares of Carnival rose 0.65 percent, while Norwegian Cruise Line climbed 1.98 percent and Royal Caribbean increased 1.56 percent, outpacing the Dow Jones Industrial Average.

The gains came after the Obama administration said it plans to lift many of its existing travel restrictions on Cuba in a move to "normalize" relations with the Communist island state off the coast of Florida.

The new regulations will make it easier for Americans to visit to Cuba under the 12 categories of travel that are currently allowed.

It isn't immediately clear when the island nation will be open for mass tourism, but it is anticipated that a special cruise tourist visa may be introduced, similar to that brought in by the United Arab Emirates.

According to local cruise website Cruise Arabia Africa that move has dramatically increased incoming cruise tourism to the Middle East and may have a similar impact if introduced in Cuba.

Cuba is appealing to companies with the most to gain from the increased travel and its attractive beaches and proximity to the United States makes it a potential vacation hotspot.

The Caribbean is the largest cruise line market in the world, and Americans account for more than 60 percent of all cruise passengers in the region.

Adding Cuba as a cruise destination in the Caribbean would be easy for the world's three leading cruise lines as all already have several ships based in the region year round, sailing from the cruise hubs of Port Everglades, Fort Lauderdale and Miami.

The Caribbean also makes up roughly 35 percent of Carnival's passenger capacity, more than any other region for the largest cruise line in the world.

Source: India Gazette