After some recovery from the COVID-19 disruptions, cruise ships are experiencing troubled waters again. Despite the solid demand with easing travel restrictions, rising inflation, higher fuel costs, and a potential recession have marred the industry’s growth. As the Fed remains adamant about increasing interest rates in the coming months, the rising interest expense of high-debt cruise ship operators could affect their financials.
The two-year treasury yield touched its highest level in 15 years. Rising bond yields indicate that the government will continue to raise interest rates aggressively, thereby making the debts more expensive. Moreover, reduced dictionary spending on concerns over a possible recession will dampen the top line of cruise ship operators.
