Rough waters ahead for cruise industry as it grapples with staffing slump amid travel heating up
Stocks under extreme pressure as inflation continues to surge
A closely watched recession predictor in the bond market just flashed red, spurring fresh concern that the U.S. economy is on track for a downturn this year as a result of the Federal Reserve's war on inflation. The spread between the 2-year and 10-year Treasury yields inverted this week for the first time since April on fears that the Federal Reserve's aggressive approach to tackling the hottest inflation in four decades could lead to a sustained slowdown in growth. The phenomenon – which is rare – has been a historically accurate predictor of recessions.
After two years of COVID lockdowns and juggling health-related guidelines, the cruise industry is facing its latest round of challenges as a record travel season is expected this summer.
Colleen McDaniel, Editor-in-Chief of Cruise Critic told FOX Business’ Ashley Webster that the supply chain issues have caused delays for many cruise lines that were set to unveil new ships to the public.
"We've seen a number of cruise ships being delayed for their debuts because of that," McDaniel said.
But, as McDaniel noted, supply chain issues aren't the only ones plaguing the industry this summer: Ongoing staffing shortages have assisted in stunting the industry’s post-pandemic rebound, forcing the world’s most notable cruise companies to find new ways to accommodate passengers.
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In a statement to FOX Business, Norwegian Cruise Lines told the network that "due to the tight labor market, we have not been able to fully staff pride of America. Therefore, in order to maintain the highest possible onboard guest experience, we are operating at a lower guest capacity."
Flexibility has been key to navigating the travel industry and in order to ensure the best experience for their customers, cruise liners are being forced to limit the occupancy on their ships.
But as staffing woes pose as a major concern across multiple businesses, the cruise industry has a unique case as most cruise ships employ people from overseas.
During the onset of the pandemic, employees traveled back to their native countries as travel advisories took effect to curb the pandemic.
Now as travel restrictions have eased, many of those employed by cruise lines in the U.S. have been unable to renew their employment visas in a timely manner due to a backup at the State Department.
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The multiple setbacks come at a time when the cruise line industry has been desperately trying to catch up after losing nearly $63 billion due to the pandemic.