Early effects of the Covid-19 on the Tourism industry: Evidence from the three major cruise companies

Abstract

: The Covid-19 pandemic has shifted investors’ preferences away from the cruise companies’ stocks as the lockdown measures totally suspended the services of these companies. In this paper, we examine three of the biggest companies’ stocks, namely the Carnival Corporation (CCL), the Royal Caribbean (RCL) and the Norwegian Cruise Line (NCLH) during the Covid-19 spread and the lockdown measures. Using relevant time series specifications, we establish a hypothesis regarding the effect of the Covid-19 pandemic on these three stocks. Based on our findings, the three stocks were affected by the Covid-19 spread and more precisely, the Covid-19 spread provides useful information for the predicting and forecasting of these stocks. Our findings are robust, since the out-of-sample forecasting accuracy of the alternative model employed, that explicitly incorporate the pandemic induced by the SARS-COV-2 virus, is superior to the baseline model.