When Genting Hong Kong’s American luxury line Crystal Cruises suddenly closed in February last year, customers and travel agents with bookings worth over $100 million were left behind. By then it had claimed some of the cruise industry’s most loyal passengers; Her draws included free-flowing champagne, famously opulent restaurants like Nobu, and dedicated butler service.
Now Crystal Cruises is coming back. Despite the blemish that comes with bankruptcy, the ability to win back those customers was reason enough for the Italian billionaire shipowner Manfredi Lefebvre d’Ovidio to revitalize the name in partnership with luxury retailer A&K Travel Group, of which he is Co-Chairman. The relaunch has been in the works for over half a year.
As of June 2022, the new partners said they paid $128 million for the 20-year-old with 980 passengers Crystal clear serenity and the 838 passenger, 28 years old Crystal Symphony, and sent both ships to Trieste, Italy, for overhaul. (Crystal’s expedition and riverboats were sold separately.) The ongoing renovations are expected to cost tens of millions of dollars and focus on reducing passenger numbers and adding larger suites — plus a pickleball court on each ship. The maiden voyage of the reborn enterprise will have Crystal clear serenity Departs Marseille on July 31, 2023 for a 12-day cruise starts at $9,700 per person.
The sale opened in February and fans were divided. “Half the people say it’s another owner, and let’s give it a try because we love crystal,” says Jack Ross, a Miami-based crystal fan who is active on business-related message boards and forums. “Other people say fuck her, Crystal took my money and I don’t book anyone by that name.”
To boost business, Crystal is taking an unprecedented move: It’s using the tens of millions of dollars lost from customers when the line collapsed as bait to pull passengers back. It’s a move they’re not legally required to take, but that the new Crystal hopes will rebuild goodwill and create a long pipeline of bookings.
Dubbed the “Extraordinary Initiative,” the repayment plan is how it will work. If you lose a cruise, you’ll receive credits equal to your Crystal Cruise credit, which can be spread across five future cruises. So if the cruises are about the same value, that’s about a 20% discount on five trips. The catch is that you have to commit to cruising as much to get all your money’s worth, and you have to act fast. Consumers must book the first of their discounted cruises by July 1, 2023 and use their entire credit on cruises departing before December 31, 2025.
In other words, you can get your money back from Crystal but have to agree to spend a lot more money – and time – on its ships.
The amount each consumer gets back reflects not only how much money they had parked with Crystal at the time of the original company’s sudden demise, minus any amounts they have or will receive, whether from credit card balances or disputes, insurance companies or other avenues, all being pursued by Michael Moecker & Associates of Fort Lauderdale, the bankruptcy firm. Credits can be used on five separate itineraries or spread across five cabins on the same voyage.
“I can’t think of anyone in the industry who has ever taken on a debt from a former owner without really knowing the extent of the debt,” said Cristina Levis, CEO of A&K Travel Group Ltd., in an exclusive interview with Monaco-based Bloomberg. (A&K is best known for operating the luxury travel company Abercombie & Kent.)
The amount of the debt is unknown as Moecker is still in the final stages of sorting through outstanding claims and deciding how much money can be paid back in cash through insurance companies and credit card companies. It is also responsible for processing the debts owed to crew members who were owed unpaid wages. She hopes that by the end of the summer the process will be complete and the payouts will begin. Even if the final reimbursement amount remains uncertain, both companies expect tens of millions to remain on the table and be transferred to the credit initiative.
Sounds like a cheap juice sales ploy, but the bosses at the bankruptcy office see things differently. “What Crystal decided to do with this gesture is remarkable partly because they had no (legal) obligation to do so, but mostly because it offers customers another alternative to recover funds lost through the closure.” says Mark Healy, Mocker’s executive vice president.
Levis sees this as an unprecedented gesture of goodwill. “Crystal passengers have mistakenly asked us for a refund because they felt that when we bought the ships and the brand, we also bought the bank accounts and everything that goes with them,” she says. “We never came into contact with the former Crystal’s customer money. We have no insight into the bank accounts or anything like that.”
Ross, the Miami-based cruiser, lost more than $2,000 on the old Crystal but decided to try the new venture — he booked a cruise to Alaska with his wife, Vicki, in 2024. As another gesture of goodwill, he may retrospectively apply their 20 percent discount to the booking – which might be a nice surprise.
© 2023 Bloomberg LP
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