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17 February, 2022

Crystal Cruises collapse leave travellers, agents out of pocket by millions

Following the collapse of its parent company and a series of pirate-like scandals, Crystal Cruises has shuttered its doors, leaving travellers and agents out by millions of dollars.

The trail of debt left by the luxury cruise line has impacted travellers, who put down payments and deposits well into 2024, agents, who are owed commissions, and employees, crew, and vendors, who once relied on the cruise line for a living.

Crystal Cruises’ demise has turned a company worth an estimated USD$1 billion (AUD$1,389,275,000) to having a bank account of zero in a matter of weeks.

The Crystal Symphony’s recent unplanned voyage to the Bahamas over USD$4.6 million in unpaid fuel, Crystal Cruises parent company, Genting Hong Kong, running out of cash due to the insolvency of its German shipbuilding subsidiary MV Werften, and then the cruise lines decision to temporarily suspend operations were all signals of the financial stress the company was facing.

“Genting HK effectively washed their hands of Crystal when they filed liquidation in Bermuda,” said former president of Crystal Cruises, Jack Anderson.

“At that point our relationship with Genting was effectively severed, and we were cut loose to fend for ourselves,” he told Bloomberg.

Those left in the crosshairs of the situation have primarily been consumers and travel agents.

Crystal is responsible for over USD$100 million (AUD$138,927,500) in customer payments and deposits held in reserve accounts in the hands of a variety of credit card companies.

Anderson told Bloomberg that most future itineraries were paid by credit card, which will make for easier refunds, however customers who paid in cash may have a harder time. People who paid for sailings that were cancelled in 2020 or 2021 but rolled the credits back will have completely lost that money as those payments are now worthless.

Travel agents are owed 10-16 per cent commissions on each itinerary and the time they spent dealing with the mess that COVID has created for them at work will never be recouped.

According to Bloomberg, it’s unclear what assets Crystal has left and the company’s fleet was not owned by the cruise line itself but amounts to secured assets of preferred creditors.

Anderson said that on 11 February, the last day the office was operational, none of Crystal’s assets was in liquid cash that the company could use to keep operating.

“Ultimately, we ended up with a bank account of zero,” he told Bloomberg.

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agent commission bloomberg cruise industry crystal cruises Genting Hong Kong Jack Anderson MV Werften