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Bookings for cruises rise in year 2021

Cruise ship bookings for 2021 skyrocket despite the number of coronavirus outbreaks that occurred on cruises this year. Yahoo Finance’s On The Move panel shares the details.

Video Transcript

ADAM SHAPIRO: I want to talk about the cruise industry because, believe it or not, over the weekend, a story broke that despite the hurt that those cruise lines are facing-- and Carnival stock, by the way, just to let you know, is off 10% just today. It's trading at $11.28 a share. And yet, a report from UBS found that 56% of people who had canceled a cruise in 2020 have actually chosen to accept a credit toward a future cruise in 2021. Julie Hyman, is this the kind of thing, the cruise industry, can it survive going forward? Because I would imagine people would be afraid.

JULIE HYMAN: Well, that number would suggest that it can. Right? I mean, the key there is that it's not people who are scheduling new cruises. It's people who have received credits because of cruises that had been scheduled. So about a quarter of them decided they were going to take the money back. They weren't going to rebook.

But what we have found is that the cruise industry has been through some troubles in the past. It has periodic norovirus outbreaks as well has had other issues through the years. But the people who cruise cruise a lot. So that seems to indicate that perhaps there will be some support for the industry because you get these people who-- I mean, I have them in my family. I don't know about you, Adam.

But certainly from an anecdotal level, there are people who cruise not just once a year but multiple times a year. And it's hard to see those people-- I mean, if they're not going to do that, what are they going to do? Right? This is sort of an easy vacation for them that fits with their lifestyle.

ADAM SHAPIRO: Let's bring in Julia La Roche on this. Because one of the issues people talk about, we're going to bail out in some form or another the airlines. In fact, this week we expect to get the details of the loan provisions. But for the cruise industry, it's different because the boats are domiciled outside the United States. Right, Julia?

JULIA LA ROCHE: Yeah, and I don't know the exact locations for each one. But there's one that's domiciled in Panama and, I believe, another in Bermuda. So it makes you wonder, what sort of taxes are they paying in terms of corporate taxes here in the US? And should they even deserve a bailout at this point?

I want to go back to what Julie was saying though because that's something I've covered in the past. Just some fun facts for you guys, about a billion people travel every year. Only 30 million take a cruise. And I think the whole thing about the industry is a lot of it's predicated on, can you grow that base, that 30 million?

Because a lot of them are repeat customers and, as that UBS report indicates, 76 using that credit to book another cruise. I guess the question going forward is, can you bring on new travelers to the cruise lines when you're seeing these sorts of headlines and folks who've been stranded on these ships amid this pandemic?

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