Cuba Conflict? Implications for the Cruise Industry... Don't Break Out The Cigars Just Yet...

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Cuba Conflict? Implications for the Cruise Industry... Don't Break Out The Cigars Just Yet...

Consumer

Leisure - Market Weight

Cuba Conflict? Implications for the Cruise Industry... Don't May 17, 2026

Break Out The Cigars Just Yet...

The Wolfe Byte

With Axios reporting that Cuba is ordering new military hardware to attack Guantánamo Bay, the CIA director

visiting the island this week and Raul Castro likely to be indicted we wanted to walk through the potential impact

of a conflict on the cruise industry.

We think a conflict here would lead to a near-term surge in cancellations and put material pressure on yields. But

if resolved quickly, it could open a high-yielding destination to the industry and would be a positive as we look out

6-12 months after any potential conflict. Cuba hasn't had cruise stops since 2019, and it could be a LSD tailwind

to yield growth in the first full year. Historically, NCLH has had the most exposure to Cuba, followed by Carnival

and Royal Caribbean. While the launch of CocoCay, Great Stirrup Cay, and Celebration Key is a key competitive

difference vs 2019, we think there would be significant pent-up demand for Cuba itineraries. Polymarket has a 46%

chance of military action in Cuba by the end of the year.

Background - Cruise travel was further restricted from the US into Cuba back in 2019. In 2016, the Obama

administration began allowing commercial flights and cruise travel to Cuba. The cruise industry saw strong growth with

541k cruise passengers visiting Cuba in 2016 and growing double-digits each year to approximately 800k visitors in

2018 (see Exhibit 2). On June 5th, 2019, the Trump administration implemented an instant travel ban on Cuba, making

cruise travel to the island illegal overnight.