Cruise line companies are almost back to March 2020 lows, and CCL has dropped even lower. Makes me very interested in how low they might go and how much potential this sector represents.
My thesis is fairly simple:
- the demographics are great for cruises: old people love cruises, so the sector should continue to grow as boomers retire
- there is pent up demand - people who cruise have not been going as much due to Covid
- Covid is (mostly) over - mandates, etc., are mostly over
Because of the above, I think the sector should be in position to grow.
However, this sector involves discretionary spending so it is very economically sensitive. With a recession predicted, there could be more short-term pain for the sector. But again, I assume that this should be short term.
The big dream is that one of the big ones (CCL or Norwegian, etc) file for bankruptcy and the whole sector tanks.
Curious to know what people think are the best and worst investments in this sector? I think that LIND represents the best opportunity - it is small and involves more elite-style cruising, so it might be less sensitive to recession (the rich people who take their cruises are less sensitive to recession).