Stubbornly high inflation has compelled Americans to cut their discretionary spending, including travel. In addition, recession fears might further decelerate travel demand, harming the cruise industry's growth. Mastercard believes the boost from pent-up demand for travel will diminish going forward in 2023.
Moreover, consecutive federal rate hikes are expected to keep cruise companies under pressure. Debt-loaded companies might find it challenging to recover amid a broader economic downturn. Interest rates are now at the highest since 2007, and the Fed is expected to hit a 5.5-5.75 percent range for interest rates in 2023, the highest since 2000.
