Florida’s Covid Resurgence Puts Tourism in Harm’s Way
Just as its cruise lines, theme parks, and movie theaters were staging a recovery, the Delta variant has sent Florida’s Covid-19 hospitalizations soaring again. The cruise boat industry’s convalescence may extend until next year, an analyst forecast.
If tourism falters, it could prove a test of Governor Ron DeSantis’s ban of vaccine and mask mandates.
Cruise lines are already looking past the ban. They have fought DeSantis, by insisting their passengers prove vaccination. Last week, Disney said it would require vaccinations for passengers over age 11 on its cruise ships, as will the Florida-based operators Royal Caribbean Group (RCL), Norwegian Cruise Line Holdings (NCLH), and Carnival (CCL).
Leisure analyst Brandt Montour, of J.P. Morgan Securities, says that the infectious Delta variant has impacted cruise bookings in the last month. While he’s notched back his price targets on stocks like Royal Caribbean and Norwegian Cruise Line Holdings (NCLH), he expects Delta will mainly affect this year’s second half. Bookings for 2022 are strong, and he rates both names at Overweight. He’s got a Neutral rating on cruise giant Carnival (CCL).
On August 9, Norwegian Cruise Lines got a federal district judge to block a new Florida law that codified DeSantis’ executive order against businesses requiring proof of vaccination. DeSantis quickly lodged an appeal, saying that “vaccination passports” discriminate against customers who want to keep their health information private.
Florida is particularly impacted. Covid counts in the state hit a daily peak last week, then eased some in the last few days. The Miami Herald reports that Covid now accounts for 27% of the Florida hospitalizations and over 50% of ICU beds. Among new Covid patients in the state, 88% hadn’t been vaccinated.
City officials in Orlando and Tampa are begging residents to conserve water, because water treatment uses liquid oxygen that is needed for Covid patients in intensive-care units. Orlando, of course, is where the Walt Disney Co. (ticker: DIS) just told its Walt Disney World workers to get vaccinated. The Disney park, and the Comcast (CMCSA) Universal Orlando across town, require masks indoors.
Florida’s state tourism agency, Visit Florida, only releases visitation estimates at quarter’s end, said spokesperson Leslie Pearsall in an email. She said the agency was confident in the outlook for Florida tourism. “Though we don’t make projections,” said Pearsall, “Florida continues to outperform the nation in key tourism performance indicators.”