Shares in cruise line stocks fell sharply Friday morning after a change to the coronavirus stimulus package blocking companies that aren't incorporated in the US will prevent them from receiving aid, according to a Dow Jones report.
Despite the three largest cruise companies being headquartered in Miami, Florida - they are all registered in other countries to avoid paying US taxes; Carnival is registered in Panama, Royal Caribbean in Liberia, and Norwegian Cruise Lines in Bermuda.
Despite the fact that all three of their corporate headquarters are in Miami, annual filings show that these companies are part of an industry that paid an average tax rate of under 1%, which is well below the required 21% corporate tax rate in the United States. -OCCRP.org
Shares were down more than 10% each in early Friday trade.
The Miami Herald notes that the industry is responsible for "nearly $9 billion in annual economic impact to Florida."
Two congressional sources confirmed to the Miami Herald that the bill currently does not allow cruise lines to access the money. The bill is expected to pass the House of Representatives on Friday or Saturday without significant changes from the version that passed the U.S. Senate 96-0 on Wednesday night, and President Donald Trump is expected to sign it into law. -Miami Herald
President Trump, meanwhile, said on Thursday that he wants cruise lines to be based in the United States and pay US taxes.
"I do like the concept of, perhaps, coming in and registering here. Coming into the United States," he said during yesterday's coronavirus briefing. "It's very tough to make a loan to a company when they're based in a different country."
Conservative US Senators, meanwhile, are lobbying against relief for cruise lines - Including Florida Republican Sen. Rick Scott and Missouri Sen. Josh Hawley, who say they should not get bailouts if they aren't based in the US.
"I was very clear about my opposition to bailouts for big corporations," said Scott in a statement. "While I still fear this bill could be used to provide relief to companies that can afford to take care of their workers without government assistance, I’m glad to see it requires a return on investment for the taxpayers."
Florida Democratic Congresswoman Rep. Debbie Wasserman Schultz, meanwhile, expressed hope that the industry could receive funds in a future bailout, while Rep. Ted Deutch (D-FL) said on Thursday that "it's important" to provide economic relief because the industry employs so many people from Miami-Dade counties.
Meanwhile, Bain & Co. sees Q1 global luxury sales down 25% - 30% despite signs of recovery in China.
"Sales could fall up to 35% this year, but companies can still emerge stronger, more innovative and more purposeful."