This is what I plan to do about the Carnival share price!

You might not need reminding that the past 12-odd months has been a turbulent one for UK travel shares. The introductions of Covid-19 lockdowns to curb spiralling infection rates has kept planes grounded and cruise ships anchored. At the other end of the scale, the development and rollout of coronavirus vaccines across large parts of the globe has stoked investor interest in so-called reopening shares like this. The turbulent Carnival (LSE: CCL) share price illustrates the immense power of these conflicting forces.

Carnival’s share price started 2020 at £33.40 but crashed to 20-year lows around 600p four months later. The company has steadily climbed away from those troughs. But at £16.90 per share Carnival remains a good 54% cheaper from those pre-pandemic levels.

Here’s why I think I should — and shouldn’t — add Carnival to my shares portfolios at current prices.

Looking on the bright side

Firstly, let’s look at some of the positives. After more than a year of Covid-19 lockdowns, signs are emerging that colossal pent-up holidays demand is being released. Carnival said this month that “booking volumes are accelerating” and that full-year bookings for 2022 are already ahead of what it described “as a very strong” 2019.

As I say, it seems that robust pent-up demand has created a bookings explosion at the cruise operator. However, Carnival says that strong progress here also reflects what it describes as a “long-term potential for cruising”. Recent from the Cruise Lines International Association shows that the number of ocean cruise passengers soared 67% globally between 2009 and 2019 to 29.7m. Its a trend that many expect to continue, too.

The Carnival share price has also risen in 2021 thanks to the steps its taken to reinforce its balance sheet. As my foolish colleague Nadia Yaqub points out, Carnival has raised in the region of £24bn to help it sail through these choppy waters.

Why I worry about Carnival’s share price

So demand for its tickets is beginning to rebound and, happily, the FTSE 250 business is expected to put on “limited” cruise trips by this summer. However, I’m still hugely concerned over the long-term future for the Carnival share price.

Of course the single biggest danger to investors is the ongoing Covid-19 crisis. Vaccine rollouts are continuing in large parts of the globe. But total infection rates remain stubbornly high as coronavirus variants emerge. Carnival’s plans to begin running a limited service before ramping up properly may end up in tatters.

This is particularly concerning given the huge amounts of debt Carnival has taken on to weather the pandemic. The company faces serious capacity restrictions when its ships leave port again, hampering its ability to bounce back into profit and get that roughly £27bn of long-term debt paid down. Such passenger limits could be in place for a long time too.

All things considered I’d much rather buy other UK shares for my portfolio today.