Most cruise line stocks come with benefits for the shareholder that many people are unaware of.

In this article, we are going to focus on Carnival Corporation (CCL), Royal Caribbean Group (RCCL), and Norwegian Cruise Line Holdings (NCLH).

READ MORE: 5 Reasons This Might Be The Perfect Time To Buy Cruise Stocks

There are many reasons to buy stock for any given company.

While you won’t get free burgers for owning stock in McDonald’s, own enough shares of your favorite cruise line, and you’ll receive onboard credit when you set sail.

“Bad News Is An Investor’s Friend”

 During the financial crisis that began in 2008, famed investor and chairman of Berkshire Hathaway, Warren Buffett, wrote in an op-ed, “In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.”

With the recent fluctuations in the markets, many people are looking to pick up stocks which, though hitting sometimes historic lows, seem poised to experience a major rally in the future.

If you happen to find a stock that is selling at a great price and also comes with a perk or two, all the better. We’ll discuss not only what perks come with owning shares of the company, but how to go about claiming those perks.

How To Claim Your Carnival Corporate Stock Benefits

Operating not only the popular Carnival Cruise Line brand, the company also owns Princess Cruises, Holland America, Costa, Cunard, AIDA Cruises, P&O Cruises, and luxury brand Seabourn.

For investors who own at least 100 shares of Carnival stock, various amounts of onboard credit are offered. How much you qualify for depends on the length of your sailing. So what’s the breakdown?

• Cruises 14 Days or Longer: $250 onboard credit
• Cruises 7-13 Days: $100 onboard credit
• Cruises 6 days or less: $50 onboard credit

There are a few important caveats to the offer.

For example, Carnival employees, travel agents cruising on a travel agent rate, group tour conductors, and anyone sailing on a reduced rate (or taking a complimentary cruise) are excluded. The onboard credit can’t be transferred or exchanged for cash, and it can’t be used in the casino or to pay the daily gratuities.

In order to receive the shareholder benefit, stockholders need to fax or mail their legal name, reservation/booking number, ship and sailing date, along with proof of stock ownership at least three weeks prior to their sail date to either their travel agent or the cruise line they’ll be sailing on.

Let’s say, for example, you were sailing on Carnival Horizon and wanted to take advantage of the stockholder benefit. All you have to do is fax proof of ownership (such as a photocopy of your shareholder proxy card or a current brokerage statement with your account number blacked out) to your travel agent or to Carnival directly.

For the address of not only Carnival Cruise Line, but all of the other brands sailing under the Carnival corporate umbrella, click here.

How To Claim Your Royal Caribbean Stock Benefits

Like Carnival, Royal Caribbean Group is a major player in the cruise market, operating ships under not only the flagship name, but also under Celebrity and Azamara. And just like with Carnival, there are perks to owning 100 or more shares of the stock.

In the case of Royal Caribbean, the benefits break down like this across all the corporate lines (Galapagos Islands sailings and charters are excluded):

• Cruises 14 Days or Longer: $250 onboard credit
• Cruises 6-13 Days: $100 onboard credit
• Cruises 5 days or less: $50 onboard credit

In order to claim your benefit, simply mail, fax or email Royal Caribbean at the addresses below and provide your name, address, booking confirmation number, ship and sailing date, as well as a copy of your shareholder proxy card or a current brokerage statement showing proof of ownership in Royal Caribbean Group.  Make sure to leave at least three weeks for processing.

Mailing address:
RCL Investor Relations
1050 Caribbean Way
Miami, Florida 33132

Fax: 1-305-373-6699

Email: shareholderbenefit@rccl.com

How To Claim Your Norwegian Cruise Line Stock Benefits

Norwegian includes the named, primary brand, but also sister lines Oceania and Regent Seven Seas Cruises. As with Carnival and Royal Caribbean, 100 shares of Norwegian Cruise Line Holdings must be owned to qualify for their investor benefits. And as with the other lines, how much you get depends on the length of the cruise you’re setting sail on:

• Cruises 15 Days or Longer: $250 onboard credit
• Cruises 7-14 Days: $100 onboard credit
• Cruises 6 days or less: $50 onboard credit

Note that these benefits do not apply to charter sailings.

To claim your benefit, complete the Shareholder Benefit Request Form available on the Investor Relations website at nclhltdinvestor.com and mail or email it with accompanying documentation: your name, address, email address, phone number, ship, and sailing date, and a photocopy of your shareholder proxy card or photocopy of a current brokerage statement with the account number blacked out.

All shareholder requests must be received at least 15 days prior to the sail date. The request form along with the proof of ownership should be mailed or emailed to the specific cruise line you’re sailing on.

By Michael York

This article was originally published in March 2020. It was updated and republished in March 2022.

The great news is that there are a whole lot of ways to do exactly that, and they begin long before you actually set foot on the ship. After all, the less money you spend on this vacation, the more you have to put toward the next one!

So, without further ado, let’s save you some cash on your next cruise vacation!

1. Sail Locally

Carnival Cruise Line operates from ports around the United States, meaning it’s relatively easy to find a ship sailing from a port you can drive to.

This can be a huge deal when you factor in the cost of flying an entire family to the port from which a cruise is embarking.

Yes, this option means you’ll have fewer choices when it comes to which ship you’re on and the itinerary it’ll be sailing, but we’re talking about ways to save money, and in the context of that conversation, sometimes sacrifices must be made. Some ports limit the destination you can reach on a seven-night cruise.

2. Consider Stateroom Options

We recently had a first-time cruiser return from their sailing and admitted they’d made a wrong decision, cabin-wise.

“A friend who cruises a lot told me they only use the room to sleep and shower,” she said, “so I went ahead and saved some money by booking an inside cabin.” As it turned out, she regretted the decision. “I should have spent extra for a balcony so I could hang out there and read or just look at the water.”

Really take into consideration how you will or won’t use the stateroom, and then pick what’s right for you. The cheap interior cabins can be awesome, but they’re not for everyone.

Sometimes, saving money winds up being a costly decision. A possible compromise? Split the difference with an oceanview stateroom or guaranteed cabin. You’ll still get a view, but it’ll be cheaper than a balcony.

MORE: Kid-Free Options on Carnival’s Mardi Gras

3. Use a Travel Agent

Not only will a travel professional help you find the perfect ship and cabin for your budget, but they’ll find you the best deal and often be able to arrange a little something perks like a bottle of wine, free internet, upgrades, a reduced deposit, discounts, or a little bit of onboard credit.

And let’s squash one of the most common misconceptions out there: No, generally speaking, you do not pay for travel agent services, nor is it a case of their fee being “hidden” in the overall cost. Instead, they earn their commission from the cruise lines based on the cruise fare.

If you have Carnival gift cards, you can also use them with your travel agent on cruise transactions.

4. Be Flexible With Travel Dates

There are certain times of the year when it’s cheaper to cruise, and the more flexible you’re able to be, the easier you’ll be able to get a deal.

Carnival is very well known for catering to families, many of whom can only travel when the kids are out of school — whether for Christmas break or the summer — so obviously, sailings during those periods are going to come with a higher price tag thanks to the law of supply and demand.

Poke around the Carnival website — which allows you to set various search parameters — and see if you can’t find a time of year that works for you and has lower rates. The shoulder season is typically the sweet spot for cheaper cruise fares.

Last-minute cruise deals are also still out there. This works great if you have a port really close to your house.

5. Consider Not Getting the Drink Package

You’d be surprised how many people blindly sign up for the Cheers! package without stopping to think it through.

For example, if you’re a couple and only one of you drinks enough to justify the price, do the math. Given that everyone over the age of 21 in a stateroom has to buy the package, it might not prove worthwhile.

On the other hand, make sure you consider that the beverage package doesn’t only cover cocktails. Factor in things like power drinks and specialty coffees before making your final decision. One way or the other, you’re going to save money, but will it be by purchasing the package or skipping it?

If you really want more than just the free offerings on the Lido deck, consider the soda package. Bottled water and beer are not permitted.

You are allowed to bring a selection of alcoholic beverages onboard, like champagne and juice. Just be mindful of the corkage fee.

RELATED: Everything You Need To Know About Carnival’s Drink Package

6. Look for Specials

Whether you’re using the HUB app (which you definitely should download) or picking up the daily list of activities (formerly distributed as the Fun Times) from the Guest Services desk, make sure to really study the schedule.

You’ll find everything from port day spa treatments and drink specials to jewelry giveaways and even “Power Hours,” in which the games in the arcade can be played at reduced prices. Think of this as the most rewarding coupon clipping you’ll ever do, and you don’t even need scissors.

7. Skip the Specialty Restaurants

Yes, every Carnival ship has a variety of venues that will tempt you to fork over a little extra, but honestly, you can have a fantastic cruise without doing so.

The menu in the main dining room offers a wide selection of offerings, and there are always other free options, too. From Guy’s Burger Joint to the buffet and the BlueIguana Cantina to the onboard pizza place, you will never go hungry, even if you don’t spend a dime extra.

8. Avoid “Empty Wallet” Syndrome

Cruise line executives love nothing more than this phenomenon, as it puts a whole lot of money into their coffers.

In essence, what it boils down to is this: Because you have to pay off your cruise months in advance, it’s easy to sort of forget how much you’ve spent and, upon boarding the ship, rationalize dropping a little extra cash in the casino or gift shop.

Hey, sometimes the human brain works in mysterious ways… especially when it comes to money! And one thing a passenger has on a cruise ship is options!

Pro Tip: If you have the Carnival Funpoints Mastercard, you can often use credit card points to cover shore excursions, gratuities, free drinks, and free wifi.

READ NEXT: 31 Carnival Cruise Main Dining Room Tips

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Let’s explore the pros and cons of Future Cruise Credits, and give you some tips on how to maximize their value.

Pros of Future Cruise Credits

Cruise Money in the Bank

An FCC is like a gift card for your next cruise. It’s money that can only be spent with a specific cruise line, can’t be spent on other things, and (usually) can’t be refunded.

That means you’ve got guaranteed money in the bank that can only be used for a cruise vacation. That also means you don’t need to worry about saving as much money for your next cruise… you’ve already got dedicated funds earmarked for your next getaway. How cool is that?

You Might Get a Bonus — Or at Least Avoid Penalties

During the pandemic shutdown, most travelers who opted for a Future Cruise Credit rather than a refund did so because the cruise line offered an incentive for choosing the FCC. From a bonus 125 percent value or hundreds of dollars in Onboard Credit, the cruise lines made FCCs a very appealing option, and if there’s one thing cruisers love, it’s a good deal.

Some passengers who voluntarily chose to cancel their cruise under the various “Cruise with Confidence” policies offered by most of the major cruise lines also received a FCC. While these travelers didn’t get any extra value tacked onto their FCC, they also didn’t lose money. Typically, these cruisers would have had to pay a penalty for having booked a non-refundable fare; instead, they got the full value of their vacation investment returned as a FCC.

Stack ’em and Save

Typically, Future Cruise Credits can be combined with any other promotions your cruise line or travel agent are offering when you go to book your new cruise. That means not only are you getting a bonus from the FCC itself, you’re also benefiting from other sales and discounts.

And even if you booked your original cruise directly through the cruise line, your FCC can be used on a new booking with a travel agent, so you might find a lower price or even more benefits re-booking with an agent than with the cruise line itself. Travel agents want your FCC bookings… they’re money in the bank for them as well.

READ MORE: 7 Ways to Get Kids Excited About Your Cruise Destinations

Cons of Future Cruise Credits

You Can’t Get a Refund

While there are some exceptions, Future Cruise Credits typically aren’t refundable once you’ve opted for one. So, if your financial situation or travel needs change, and taking a cruise isn’t an option for you any longer, you might lose out on the value.

Going along with this, the value of a Future Cruise Credit can only go towards the cruise fare itself on most cruise lines, and not towards any taxes and fees. Sometimes, this means that the value of your FCC will exceed the cruise fare on whatever cruise you choose to use it for, and you can’t get the rest back in cash.

When this happens, consider upgrading your cabin so you don’t leave any credits on the table. Otherwise, a few things could happen —again, depending on the cruise line. You could lose your remaining FCC value, or some lines will allow the rest of the FCC to go towards onboard credit. Other lines might allow you to keep the remaining FCC value for another cruise, but keep in mind that you’ll still need to use it before the FCC expiration date.

Once again, check with your cruise line to see how they handle leftover FCC value if you’re looking at a cruise that costs less than your original voyage.

They’re Non-Transferable

Likewise, some cruise lines aren’t allowing FCCs to be transferred to another passenger. So if you, personally, can’t cruise, you aren’t able to give your FCC to Uncle Jack or Aunt Nellie, and you might lose out on the value. It doesn’t hurt to ask for an exception if you find yourself in this situation, especially if you’ve got another passenger ready to book a cruise right now and use your FCC.

You’re Locked Into a Specific Cruise Line

Future Cruise Credits are issued by a specific cruise line for use on that cruise line, no exceptions. You can’t use a FCC on a sister line (i.e. using a Royal Caribbean FCC on Celebrity isn’t possible).

While this might not be an issue for most travelers, it can be a problem if you can’t find a cruise you want to take on the line you originally booked, or if all the itineraries you’re interested in are sold out. Book early for the best selection of ships, sailings, and staterooms to avoid disappointment… there are hundreds of millions of dollars in FCCs out there that cruisers can’t wait to use.

It Might Not Satisfy The Deposit

With some cruise lines, a Future Cruise Credit will not be able to go towards a deposit for your booking. So you’ll need to put down cash for the deposit before your Future Cruise Credit is applied to your booking.

This policy varies depending on the cruise line, so check with your specific line so you won’t have any surprises.

Future Cruise Credits Expire

FCCs have expiration dates, both to book your next cruise and when you have to actually sail by. While these dates have been shifting over the past year while the cruise lines weren’t able to sail, now that cruises are resuming, future extensions are far less likely. You don’t want to lose hundreds or thousands of dollars in value by booking a day late or not being able to find a suitable cruise with cabins available before your sail-by date.

If you’re not sure when your FCC expires, log into your cruise line account to check, or call the line or your travel agent and they can help you.

READ NEXT: What You Need To Know About Cruise Travel Insurance

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READ MORE: Royal Caribbean Extends Suspension Of Sailings Through July 

Among the topics covered by Royal Caribbean Cruises CEO Richard Fain, President of Royal Caribbean Michael Bayley, and Chief Financial Officer Jason Liberty were another delay in the company’s planned return to service, why international markets might open before those in America, and some surprising statistics about the ships themselves.

Royal Caribbean Ships Will Not Set Sail Until August 1st

Bayley revealed that Royal Caribbean would be extending their suspension of services in response to a reporter’s question, which arose in light of Norwegian Cruise Line’s similar announcement earlier in the day.

Confirming that Royal Caribbean’s ships would now be passenger-free through July, the exec added that the one exception to this was the China marketplace. Once ships do begin to sail, it will likely be a slow process. “We don’t expect that this is going to be that someday, somebody blows a horn and all the ships start operating right away,” explained Bayley. “We think it will be a gradual start, a little bit like society is opening up gradually.”

Other takeaways from Royal Caribbean’s earnings report included:

• Sailings from international ports might return sooner than those out of North American ports. The execs explained that this might be an option, given that some countries are further along in the progression of the health crisis than is the United States.
• The return to service will likely be done in phases. Currently, the cruise line is working on a four-pronged Return To Healthy Service Plan, full details of which are still being worked out.
• The company reported a loss of $310 million for the first quarter of 2020. On the plus side, they have reduced their expenditures from a previously reported $400 million per month to approximately $250-$275 million per month.
• Approximately 45 percent of cruisers who had sailings cancelled have asked for refunds instead of Future Cruise Credits. Interestingly, international travelers are more likely to take the cash.
• Members of Royal Caribbean’s loyalty program have been relatively quick to re-book using their Future Cruise Credits. And many who have used their credits — which is generally for 125% of the original cruise fare — are booking higher categories of stateroom than what they’d originally been booked into.
• Although sales for 2021 are lagging a big behind, they still fall within what are consider historical norms.

Why Ships Could Sail With Far Fewer Guests

One of the most surprising things to come out of the conference call was just how empty ships can sail and still prove to be profitable. “On our newer ships,” said Liberty, “you need about a 30% load factor to kind of break-even” on what’s known as an EBITDA level of profitability.

This refers to the earnings before interest, taxes, depreciation and amortization and can be a misleading number due to the various things not factored in.

However, it does give at least some indication of how ships could theoretically sail with far fewer passengers, making social distancing easier to control until things get back to normal.

In a press release, the company said they are taking steps to strengthen its liquidity through the pause of operations.

“Taking these extremely difficult employee actions involving our highly dedicated workforce is a very tough thing to do. Unfortunately, it’s necessary, given the current low level of guest operations, and to further endure this pause,” said Carnival Corporation & plc President & CEO Arnold Donald.

Last month, Carnival Corporation completed a successful financing effort with a heavily oversubscribed offering of senior secured notes, senior convertible notes, and common stock, netting $6.4 billion of additional liquidity.

Carnival Cruise Line President Christine Duffy said, “Our employees are the foundation of our success.  We are saddened by these decisions and are sorry that we must implement these measures.  Many very talented people are being impacted, through no fault of their own, and we have worked to craft severance and furlough plans that recognize their contributions to our company.”

Carnival Cruise Line has released over 800 shoreside employees from their Florida office. While on the West Coast, Holland America Line and Seabourn Cruises laid off or furloughed 50% of their staff. In California, Princess Cruises is doing a combination of furloughs, pay cuts, and layoffs.

Earlier this week, President and CEO of Holland America Line, Orlando Ashford announced he would be stepping down at the end of May. Departing alongside Ashford is Rick Meadows, President of Seabourn Cruises, a 35 year veteran of Carnival Corporation.

Norwegian Cruise Line was the first cruise line to furlough employees in mid-March.

In April, Royal Caribbean laid off or furloughed 20 percent of its workforce.

The call covered the company as a whole, representing Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises.

Before the shutdown, Norwegian was experiencing recording bookings at higher price points and at full capacity. The first quarter was significantly lower, showing losses across the board.

A series of transactions brought much-needed liquidity and cash infusion to the company that hinted of reorganization a day earlier.

Some of the takeaways noted:

1. Job one is to get the no-sail order by gaining confidence from the CDC and public health officials that it’s safe to cruise.

2. Return to service will be a slow startup. The phase-in approach will likely see five vessels returning per month. With all 28 ships resuming operation within five to six months, assuming embarkations port are open for service.

2. A majority of their ships are currently in a cold layup, meaning only essential operational crew are onboard. This type of layup is costing the company $70 million per month. Cold layups also reduce fuel expenses because the ships stay docked.

3. The next new build isn’t due until mid-2022 for Oceania Cruises, but that could be delayed depending on how far behind schedule the shipyards are.

4. The company has taken a significant amount of bookings and cash flow, even throughout all the negative press coverage. It was noted that consumers have confidence in the cruise line and that this will eventually pass.

5.  They are expecting it will take time to ramp up guest capacity. They aren’t expecting everyone to run back to cruising but noted there’s still a pent up demand. Earlier this week, Norwegian Cruise Line opened up sailings through 2023.

6. You could see more promotions that include air to get guests to come to the cruise ports. The Regent brand is currently seeing a demand for Asia and Europe, alluding that people are willing to still fly to their cruise ship.

Closing Thoughts

At the end of the quarter, the cruise company had $3.7 billion in liquidity, which would give them over 18 months of financial runway in a shutdown scenario. The company said they expect to run the business at a loss for the next few months and are also planning for a year-end loss.

“It took decades to build this industry and in a matter of weeks, we dismantled it. It’s going to take not decades to build it up again, but it’s going to take a little time,” Del Rio commented.

He closed with, “There’s going to be survivors and there’s going to be some that don’t survive. And that’s going to be success stories and failures. We feel like we will be one of the success stories.”

Norwegian Cruise Line Holdings opened at $9.94 on Thursday morning.

Tour Norwegian Encore

With ships unable to sail — and companies unable to generate revenue — we’ve all been getting a crash course in modern-day economics.

If you’re like us, money on such a massive scale is not something you’ve regularly had to think about. So while reading about Carnival’s latest SEC filing or Norwegian’s liquidity, we’ve had to brush up on some of the terminologies.

With that in mind, we offer up a list of words which have been popping up routinely, what they mean, and even some examples of how they apply to the cruise stories you’ll be reading.

A Cruiser’s Guide To Financial Terminology

Balance Sheet
This refers to a company’s financial position, offering an overall picture of assets, liabilities, and the company’s net worth.

Bond

Think of a bond as a loan issued by a company looking to raise cash. Depending on the type of bond, the interest rate — also known as a coupon — can be low or extremely high, usually depending on the credit score of the company. Bonds are often used by companies to finance projects and operations.

Common Stock

This is typically what you’re paying for when you buy shares in a company. When a company issues new stock, they’re looking to raise money via its sale. Of course, increasing the amount of stock dilutes the actual value of existing shares.

As an example, Norwegian Cruise Line Holdings issued 36,363,636 additional shares of common stock earlier this year as part of their fundraising efforts. As of this writing, there are currently just over 214 million shares of NCLH outstanding.

Convertible Senior Note

Similar to a bond, this is a loan with an unusually low-interest rate because it has an embedded option to be converted into shares of company stock instead of being paid back. Should a company wind up filing for bankruptcy, holders of this type of note move to the front of the line in terms of being paid. If the company does well, these can be converted to stock, which will have a higher value.

Earlier this month, Carnival Corporation received $2.95 billion worth of convertible senior notes with a 5.75 percent interest rate.

Debt Holiday

This is basically a period of time during which payments do not have to be made toward a debt. European lenders have been using this option to allow struggling cruise lines to defer payments, sometimes for as long as a year. Cruise companies are taking advantage of this through the institutions that originally helped financed their ships.

Both Royal Caribbean and Norwegian Cruise Line were able to boost their on-hand cash by taking advantage of “debt holidays” offered by the French and German banks which helped finance their ships.

Dividend

This is a payment made to shareholders in return for their investment in the company. These can be paid out quarterly or annually, and they can also be cut off during difficult times.

For example, prior to the financial difficulties which rocked the industry, Carnival Corporation (CCL) paid a dividend of fifty cents per share, per quarter. However, in late April, Carnival announced they would be suspending dividends for the time being.

Export Credit Agency

This type of agency’s primary role as far as cruising is concerned is the underwriting of potentially risky overseas investments. ECA’s can operate as part of a government department, or they can operate as private companies. Germany’s official ECA, Hermes, has financed several Norwegian ships. Hermes recently agreed to defer loan payments on five of those new builds.

Forward-Looking Statements

In regard to financial matters (including Securities And Exchange Commission filings and stock reports), forward-looking statements are essentially predictions about how a company or stock will do in the future.

Given that the future is, of course, unpredictable, these statements are usually accompanied by warnings about the various factors which could impact things moving forward.

Liquidity

The cash (or access to cash) that a company has immediately available to pay debts, including monthly operating costs. This has become a very big issue for cruise lines, given that they continue to have ongoing expenses despite generating no real revenue to speak of.

Private Equity Firms

These are companies that take money raised through a variety of means and invest them in various companies, often in exchange for a management fee, a portion fo the profits or such considerations as a seat on the board of directors.

Recently, Norwegian Cruise Line received $400 million worth of funding from the private equity firm L Catterton. One term of the deal allowed for Catterton to nominate one member and one observer to the board of directors.

Secured Note Offering

This is a low-interest loan or promissory note (essentially a type of bond) that is backed up by assets of equal or more value. This is in direct contrast to a normal bond or unsecured note, which has no assets attached to it and is therefore deemed far riskier and usually comes with a much higher interest rate.

Securities and Exchange Commission (SEC)

The independent agency of the US government that was created in 1934 to protect investors and regulate markets. Much of the financial information coming to light about the various cruise lines is thanks to filings they are making with the SEC.

Shareholder

As the name implies, this is a person or entity which owns stock in a company. It doesn’t matter if you own a single share of stock or millions of shares, you are a shareholder. When it comes to cruise lines there can be additional benefits to owning stock, often including — once a given number of shares have been accrued — onboard credits during future sailings.

Of course, investing in a company is always risky, and that is doubly true when the business is being as hard-hit as the cruise sector is at this moment.

Already, dividends and “perks” are being cut back as companies attempt to save money. More importantly, should a company in which you own stock go belly up, holders of common stock will be the last to get paid during bankruptcy proceedings. Secured and senior debt will get paid first, followed by other debt, and then the shareholder.

How They Turned A Very Bad Situation Around

This is a somewhat stunning reversal of fortunes, given that it was only a day ago that the company was painting a gloomy picture that included a possible bankruptcy.

But the situation changed overnight thanks to their ability to secure over $2 billion in additional liquidity.

READ MORE: Carnival To Resume Limited Cruises On August 1st

In a statement released today, Norwegian Cruise Line Holdings said that, if everything goes as planned — and there was no reason to think it wouldn’t — they expect “to have approximately $3.5 billion of liquidity.”

As a result, this would leave them in a strong enough position, financially, to “withstand well over 12 months of voyage suspensions” should such a worst-case scenario come to pass.

READ MORE: Norwegian Cruise Line Frees Up More Cash To Weather Storm

The statement went on to say that they do not expect such a dire scenario to take place, but the liquidity “alleviates management’s concern about [Norwegian’s] ability to continue as a going concern for the next 12 months.”

This is a major turnaround given that 24-hours ago, the company’s statements had a far different tone.

“If we are unable to fulfill our liquidity needs through operating cash flows and/or borrowing under credit facilities or otherwise in the capital markets,” they said Tuesday, “our business and financial condition could be adversely affected and it may become necessary for us to reorganize our company in its entirety, including through bankruptcy proceedings, and our shareholders may lose their investment in our ordinary shares.

What’s Next For Norwegian Cruise Line?

As of now, the cruise line is hoping to resume sailings as of July 1, although there are several hurdles that will have to be cleared before that is possible.

Like other lines, they are currently working on developing a series of protocols that will help keep passengers and crew alike safe in the case of further health issues arising.

The Good 

Private equity firm L Catterton invested $400 million into the company in exchange for a seat on the board and a seven percent interest rate. With additional liquidity added from loan deferrals in Germany, the company now has upwards of $1-billion of added liquidity.

READ MORE: Good Financial News For Norwegian Cruise Line

With L Catterton, which is the largest consumer-focused private equity firm in the world, believing in them, there is still confidence.

The cruise line still has assets to draw against, including two cruise ships appraised at $740 million. Norwegian also has Great Stirrup Cay and Harvest Caye, which were recently appraised at a value of approximately $260 million.

The company also announced it will raise a $350 million stock offering and over $1 billion in exchangeable notes. Norwegian Cruise Line Holdings said if all the transactions go through as planned, it will give the company nearly three billion in additional funding.

The Bad 

The cautionary statement read, “If we are not able to fulfill our liquidity needs through operating cash flows and/or borrowings under credit facilities or otherwise in the capital markets, our business and financial condition could be adversely affected and it may be necessary for us to reorganize our company in its entirety, including through bankruptcy proceedings, and our shareholders may lose their investment in our ordinary shares.”

While the company has no plans to shut its doors, it leaves the option of restructuring on the table.

The line outlined the various ways in which the current world crisis is creating a difficult environment for the cruise industry. In painting this picture, they addressed concerns ranging from the current lack of cash flow to the challenges of attracting customers back onto ships once they are able to sail again.

The Ugly 

If the company files bankruptcy, it is not good news for common shareholders. The shareholder is the last in line to get paid after all other debts are settled. Meanwhile, the news had an almost instantaneous negative impact on the price of Norwegian Cruise Lines Holdings stock.

By mid-morning, the already-battered shares had tumbled over 20 percent.

What Happens Next?

If there is a potential upside to the statements contained in the SEC filing, it is that such reports often predict worst-case scenarios that do not come to pass.

Companies need to be as forthright as possible in such documents, so as not to be accused at a later date of misleading potential investors.

That said, the industry as a whole is going to face major challenges in the months and possibly even years ahead. They — and the cruisers who love them — will have to adjust to whatever becomes the “new normal” aboard ships.

Currently, Norwegian Cruise Line is expecting to begin sailing again on July 1, although their ability to do so will be determined in large part by the Centers For Disease Control, which currently has the industry under a no-sail order.

Norwegian’s biggest competitor, Carnival Cruise Line, has announced that they intend to begin doing a limited number of sailings out of three ports beginning on August 1.

According to a Securities and Exchange Commission filing on Monday afternoon, payments on Celebrity Edge, Celebrity Apex, and Symphony of the Seas have been deferred until April 2021.

Like Germany, French lender, BpiFrance Assurance Export, is also allowing troubled cruise companies to exercise a debt holiday or loan deferrals to get through a time when no revenue is coming in. All three cruise ships were built in France, allowing them to take advantage of the offer.

A report on CNBC’s Closing Bell in April showed Royal Caribbean’s monthly operating expenses at an estimated $400 million per month.

Royal Caribbean has been trying to reduce monthly operating costs to weather the financial storm. Most recently the company laid off 25 percent of its workforce throughout all its brands and is postponing ship revitalizations.

At the request of Royal Caribbean, construction on the new cruise terminal in Galveston, Texas has also been postponed until 2021.

The debt relief is on top of the $250 million that Royal Caribbean received from German creditors in April where they deferred payments on Celebrity Silhouette, Celebrity Solstice, Celebrity Eclipse, Celebrity Equinox, and Quantum of the Seas.

Norwegian Cruise Line Holdings announced they were also taking advantage of debt holiday from Germany’s leading credit agency. The cruise line was able to defer payments on three of their ships: Pride of America, Norwegian Epic, and Norwegian Jewel, adding $910 million dollars in liquidity.

On Tuesday morning, Royal Caribbean stock opened at $41.63 per share, closing at $41.37 on Monday.