Cruise Shipping Stocks Tank on Lutnick Tax Comments
As the Trump Administration sweeps through its first month in office with a torrent of restructuring in government, it seems even Mickey Mouse is fair game. Cruise operators which service the dominant U.S. cruise market routinely so-called ‘flags of convenience’ outside of the U.S., a provision that allows them to avoid taxation.
In speaking with Fox News last night, and widely reported on multiple news outlets, Commerce Secretary Howard Lutnick reportedly suggested that the federal government would push for cruise companies to start paying taxes after long benefiting from tax loopholes.
In turn, shares in major cruise companies plunged on Thursday as the companies and investors digest what this could mean to the company’s bottom lines. As of this writing at 2:20 pm EST,
- Royal Caribbean Cruises (RCL) saw its stock slide nearly more than 8%
- Norwegian Cruise Line (NCLH) dropped 5.5%
- Carnival Corp. (CCL) declined 6%, and
- Lindblad Expeditions (LIND) fell 3.5%.
“You ever see a cruise ship with an American flag on the back? They have flags of like, Liberia or Panama,” Lutnick reportedly said.
Cruise lines have experienced a post-pandemic boom, capitalizing on surging travel demand. Just last month, Royal Caribbean exceeded Wall Street expectations, citing strong booking trends and pricing power. However, their tax advantages have long been a point of contention.
