Wells Fargo analyst Timothy Conder says that 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." The analyst notes that China now accounts for approximately 5%-6% of global cruise capacity deployment, but likely slightly higher as a percentage of global sourcing all relative to 2002/2003 SARS outbreak when the industry had no exposure. 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, he adds. Conder believes 2020 will see approximately 11% year over year industry capacity growth versus a (10%) year over year in 2019. The analyst highlights the exposure of the three largest industry players: Royal Caribbean RCL) about 6% capacity/12% sourcing, Carnival (CCL) about 5% capacity/6% sourcing, and Norwegian Cruise Line (NCLH) less than1% capacity/about 1% sourcing.

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