China's coronavirus, an epidemic with flu-like symptoms that has alarmed the travel industry, should not have a major impact on cruise sector earnings, according to an analyst.
The virus has infected 300 people and taken six lives since being identified last month in Wahun, China.
The US Centers for Disease Control and Prevention plan to announce the first case reported in the US on Tuesday.
"China's coronavirus outbreak will be something to very closely monitor especially as it relates to the cruise industry, but at present, is not likely to be a material headwind," Wells Fargo analyst Tim Conder wrote in a clients' note.
China accounts for about 6% of global cruise capacity, up from 0% during the 2003 SARS outbreak, he said.
"While coronavirus concerns are currently heightened surrounding the Chinese Lunar New Year peak holiday travel period, this is a less important seasonal period for the cruise industry relative to the peak summer cruise season," Conder wrote.
"Additionally, the China market is one which books the closest into actual sailing versus other geographic sourced markets."
Wells Fargo expects that China will account for 5% of Arnold Donald-led Carnival Corp's 2020 capacity and 6% of sourced bookings.
Richard Fain-led Royal Caribbean Cruises should get 6% of capacity and 12% of sourcing from the country, while Frank Del Rio-led Norwegian Cruise Line Holdings should see 1% exposure in capacity and sourcing.
All three companies' shares have fallen slightly through mid-afternoon Tuesday: Carnival down 2.8% to $50.43, Royal Caribbean down 2.4% to $58.25 and Norwegian down 4.5% to $128.97.
"We continue to monitor developments in the region and are in consultation with health officials to assess the situation," Royal Caribbean spokeswoman Melissa Charbonneau told TradeWinds.
"We have implemented precautionary measures at the terminal and onboard the ship to ensure the health and safety of our guests and crew who remain our primary concern."
Carnival is working with health authorities on appropriate procedures for its ships in the region to follow, spokesman Roger Frizzell said.
"China represents roughly 5% of our total capacity, so it is a very small part of our cruise business today," he told TradeWinds.
Norwegian has not immediately returned calls seeking comment.
