Forecasting Brexit’s Impact on Cruising
As Britain has voted to leave the European Union, cruise travel implications will begin to emerge, not just for British brands like Cunard Line and P&O Cruises but larger companies like Carnival Cooperation, Norwegian Cruise Line Holdings Limited and Royal Caribbean Cruises Limited.
Greenpeace’s Energydesk reports that Brexit developments occurred on Cunard’s Queen Elizabeth, where the Midlands Industrial Council arranged to gather members of parliament, ministers and businessmen for political discussions onboard on occasions in 2013, 2014 and 2015. The site claims that Grassroots Out leader Nigel Farage called for a hand-raising poll of attendees in 2014 to see how many were for Brexit, resulting in 75 percent affirmatives.
Even before the Brexit decision was finalized, the initiative was causing cruise industry stock prices to weaken among investor concern. Performance numbers have also been affected by reduced European cruise demand in general, according to Wells Fargo Securities.
Corporately, Carnival, Norwegian and Royal Caribbean have all suffered. The thinking was that the UK remaining in the EU would improve the stocks. Now that is less likely to happen as Wells Fargo analyst Tim Conder was quoted as saying, “Economically, a Brexit vote could in the short-term also negatively impact eurozone growth and, to a lesser degree, global growth.”
The impact on the industry might also come in the form of restricted booze cruises according to Mirror Online. Lower taxes and overall beer and wine prices combined with a strong pound and reduced transit fares have encouraged English Channel crossings to pick up liquor in France and bring it back to the UK. But Brexit could result in customs limitations. Even the potential reintroduction of cross-Channel duty-free retail is unlikely to make up for any new restrictions.
