Report: Crystal Cruises Closes Down and Lays Off U.S. Staff
Late today, an unconfirmed report surfaced saying that the U.S.-based Crystal Cruises, which was a marketing company and brand for Genting Hong Kong, is officially closing as of Wednesday, February 8. The banks that are acting as receivers for the ships and are said to have appointed V.Ships last night to manage the cruise ships, which have also reportedly been offered for sale.
The demise of Crystal Cruises had been rumored since the financial collapse last month of Genting Hong Kong, its parent company. Genting Hong Kong purchased the brand in 2016 in a transaction valued at $550 million with plans to expand it into a wide-reaching luxury operation spanning from ocean cruises to private jet charters, a 777-200 jet for air tours, residences at sea, expedition and river cruising. The report of the closing of the U.S. offices came from a recorded message, presumably from the captain, sent by crewmembers to the website Crew Center. While the sound quality is poor, it is clear the officer speaking has little information but sounds dejected in announcing the demise of the brand.
Crystal Cruises office in the US is closing down. V.Ships will take over as Management Company of the ships. Unfortunately, this is the end of Crystal Cruises. pic.twitter.com/7IUdp6GSd6— Crew Center (@CrewCenter) February 8, 2022
The reports circulating in the industry are that the secured creditors of the cruise line, various banks holding mortgages on the cruise ships, moved to protect their interests by taking control of the ships. Previously, fuel supplier Peninsula Petroleum had won a court order in Miami to arrest the Crystal Symphony over unpaid fuel bills from December and January for the company’s two cruise ships. Peninsular followed the ships after they diverted to the Bahamas and last Friday was successful in having the Bahamian authorities seize the Crystal Serenity and Crystal Symphony when they arrived in Freeport seeking fuel and provisions. The cruise ships are registered in the Bahamas.
Crystal’s expedition cruise ship, the Crystal Endeavor, however, was permitted to sail after disembarking its passengers and is current at sea. The vessel is indicating that it will arrive in Montevideo, Uruguay on February 10. It is unclear what will happen as German banks are the creditors for the vessel that was completed in the summer of 2021 at MV Werften, Genting Hong Kong’s shipyard. The financial collapse of MV Werften at the beginning of January set off the cross defaults that hit Genting Hong Kong and its Asian cruise brand Dream Cruises. The state of Mecklenburg-Vorpommerns where the shipyard is headquartered in Germany provided a bridge loan in late 2020 to restart operations to complete the Crystal Endeavor and resume work on the larger Global Dream cruise ship for Dream Cruises.
Crystal also marketed five river cruise ships in Europe, four of which were built by MV Werften, and the fifth was acquired and refurbished. These ships had been in their normal winter lay-up scheduled to resume sailing in the spring.
Speculation has been that the river ships and the new expedition cruise ship would draw the greatest attention for possible resale. The Crystal Symphony was built in 1995 and although recently updated is considered to be older while the Crystal Serenity was introduced in 2003.
Both of the cruise ships had disembarked their final passengers in Bimini in the Bahamas in January. Crew members, however, remain aboard both ships and the expedition ship, reporting that they were paid their wages for January but are waiting for the company to arrange repatriation flights as per their employment contracts. Last week, when the two cruise ships were arrested, the captain had said he expected sign-off to proceed this week but was awaiting word.
Crystal Cruises was conceived in the late 1980s as a premium cruise line in the emerging deluxe segments of the cruise industry. Japan’s NYK financed the company working with a team of U.S. executives led by Art Rodney who had previously been CEO of Princess Cruises. The company’s first ship, the Crystal Harmony, was built in Japan and at 50,000 gross tons and carrying just 900 passengers defined what today is considered the premium segment of the cruise industry.
NYK considered Crystal a prestige brand investing in the company to maintain it as an award winner while reports said that it often was not profitable. The original plans called for three sister ships, but they were never built with NYK adding the second ship in 1995 and the third ship only in 2003. The first ship however was sold in 2005 to NYK to become the Asuka II cruising in the Japanese market.
Earlier today, February 8, Genting Hong Kong confirmed the appointment of provisional liquidators for Dream Cruises. They continue to say that the goal is to develop a restructuring of the group’s financial indebtedness designed to allow Dream Cruises to continue as a going concern. The goal is to reach an arrangement with Dream Cruises’ creditors through a scheme of arrangement that would permit the group to reduce its debt and continue to operate cruises in Asia.