Florida sues CDC over ‘unlawful’ cruise industry shutdown

Yahoo Finance’s Julie Hyman, Myles Udland, and Brian Sozzi discuss the cruise industry’s reaction to the latest guidance from the CDC.

Video Transcript

JULIE HYMAN: Let's talk about the cruise lines right now. We're watching the stocks go up this morning. This after Florida Governor Ron DeSantis is-- says he's going to sue the CDC. He says he wants cruise ships to be able to get back out there. And the numbers have been pretty bad for Florida. If you look at various measures, there was a report last September from the Federal Maritime Commission that's in the first six months of the pandemic, Florida lost $3.2 billion as a result of the cruise industry shutdown.

Now we heard from Carnival this week, when it came out with earnings, that bookings are going up. Carnival actually got upgraded by Credit Suisse this morning to outperform from neutral, saying that the cruises will be likely to restart in mid to late summer. So it's unclear-- you know, DeSantis is doing this. Presuma-- he hasn't even filed yet. He says he's going-- they're going to file. Presumably, that'll take some time.

If the cruises are going to be cruising again in mid to late summer anyway, it's difficult to see a situation where a lawsuit situation would get resolved before then, which leads me to, well, maybe it's just politics. But maybe that's just me. Myles, how are you looking at this situation?

MYLES UDLAND: Well, you know, it's interesting. When we talked to Jim Allen of Hard Rock International yesterday in the show, we asked him about-- you know, I was trying to ask him, are you seeing a positive effect to your casinos because people can't get on cruises? And is that part of the same consumer?

And kind of the way I took his answer was that there's a symbiotic relationship there. People will come down a day early for their cruise and maybe stay at one of his properties or stop by, sitting on the tables for a few hours before their ship goes out. You know, cruise time can be weird, right? You've got to get there six hours before you actually get on the ship, so on and so forth.

Anyway, so certainly the Florida tourism industry sees itself as one big cohesive unit. And I think DeSantis-- yes, obviously, it's just politics. But he's, you know, just trying to reiterate to the very pro open-it-all-up business community down there that he remains focused on that mission. And we've heard from the cruise lines just this week that they're pushing back US embarkations until at least the end of the second quarter.

But, you know, I think, again, the optics here are fairly straightforward from the political perspective and I think just thinking through the way that having cruises go out affects a whole host of other industries and, you know, the knock-on effects, whether it's local restaurants, casinos, flights, so on and so forth.

BRIAN SOZZI: Yeah, no, pardon the pun here, but there has been a-- and you just, I think, hinted at this, Myles-- there's been a sea change here in sentiment amongst the-- in the C-suite--

MYLES UDLAND: Come on.

BRIAN SOZZI: --at these-- at the major crew-- yeah, well, you know, in the major cruise lines here, where you look at Carnival, Carnival yesterday, Arnold Donald, he said we want to be viewed more like other travel companies, like airlines. We want to come back to business. That's a change in tone, I would say, relative to the past few months where a lot of the cruise lines, because they've been forced to, they've followed or they fall in line of what the CDC has said.

Also, worth mentioning here-- Carnival has 14 US ports. And Donald-- Arnold Donald was noting on that call yesterday that they are open, open to potentially selling out of other locations, essentially taking US jobs and implanting them into other countries if the CDC doesn't get moving here. So you're right to bring that up, Myles, here because this is going to be a culture clash, I think, between these two, the C-suite and the CDC, in the months ahead here.

JULIE HYMAN: Just one quick note, I stand corrected. DeSantis did ac-- the administration did actually file suit. He didn't just say he's planning on it. They actually did it. And another quick note, I saw those Arnold Donald comments as well, Brian. And with all due respect, you're not on a plane for very long. And you don't take your mask off. You're on a cruise ship for quite a while. And you got to eat, so your mask is coming off at some point.

Another quick note, DeSantis also signed an executive order banning vaccine passports. So for example, if a cruise ship wanted to say, you got to show your vaccine passport or test results, say, to get on the ship, it sounds like in Florida, that would not be doable.