Shares of the second largest cruise operator in the world, Royal Caribbean Cruises (NYSE:), hit their 52-week price low of $64.20 in yesterday’s trading session. Investors in the cruise industry are worried about the COVID-19 variant. The CEO Moderna (NASDAQ:) has voiced concerns over the effectiveness of existing vaccines against the new strain, which has increased investors’ anxiety. So, given RCL’s high volatility, is it wise to bet on the stock now? We offer our opinion. Royal Caribbean Cruises Ltd. is based in Miami. It owns three brands of global cruise lines, which include Celebrity Cruises, Royal Caribbean International and Silversea Cruises. The stock’s price has fallen 33.2% and 27.2% respectively over the last six months. RCL fell to $64.27 yesterday at its 52-week lowest, dropping as high as 8% in the intraday trading session. Stock has a beta of 2.62, which indicates high volatility.

There are fears that the COVID-19 omicron strain has been identified and will lead to new restrictions. The World Health Organization presented the new variant as a ‘variant of concern,’ advising countries to consider imposing new restrictions and banning international travel. This threatens the cruise line’s recovery. The effectiveness of the vaccines currently in use against the variant is unknown. Recently, Moderna Inc. (MRNA) CEO expressed concerns about the possibility of a ‘material drop’ in the effectiveness of existing vaccines against the new variant. If the omicron variant drives another COVID-19 wave, or the vaccines fail against the strain, it could adversely affect RCL and the cruise industry’s recovery.

Even though Emer Cooke, executive director of the European Medicines Agency, has attempted to reassure the world, stating that “even if the new variant becomes more widespread, the vaccines we have will continue to provide protection,” uncertainty persists.

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