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Goldring Travel Blog – Making Waves

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Crystal Cruises and Genting Hong Kong: Never Perfect Together!

UPDATE: A United States District Court arrest warrant has been issued for the Crystal Symphony for unpaid fuel bills back to 2021.  Essentially in admiralty (and I practiced admiralty law for decades) a ship is like a legal person so it can be arrested. Once arrested the ship can be sold at auction if the bills aren’t paid.  However, here the play is really more to be given priority. BUT Crystal is no longer ending the Symphony’s cruise in Miami, but The Bahamas to be outside of the US jurisdiction. And, to make things more complicated, depending on how the liquidation is considered by the US courts, the arrest warrant could actually be considered unlawful. There will be a hearing on this in the very near future where Crystal Cruises (or Genting) can make those arguments. OH, it is going to get really messy!

Crystal Cruises is, at least for now, out of business.  It is not the fault of the management or the staff and crew. It is, however, the fault of its parent company, Genting Hong Kong.  

Crystal Serenity

Back in 2015 I saw this coming and, to be sure, the pandemic didn’t help but it was not the main cause. 

Before I get to the how or why, I want to address the fallout. For many of my friends and colleagues that own travel agencies that have essentially been built around an almost fanatical loyalty between Crystal and its guests (and I do mean both ways!), there is going to be a huge financial loss. This loss is not only on future cruises that won’t happen, but on past cruises that their commissions haven’t been paid.  (Yes, I will lose some commissions, but won’t be hurt too badly by it.)

In fact, there are many others that you might not think about that are going to be hurt and hurt hard by it ranging from suppliers to expedition folks. (One person I know was told to get medical examinations with the cost to be reimbursed and now that person is out hundreds of dollars…which is a lot for an individual.)  Because of this there will be a run-on effect that will take a while to see what the real damage is.

Hopefully not too many of these innocent travel agencies, suppliers and individuals will be forced out of business or financially stressed beyond their means.

So how did this failure happen?  Let’s step back to 2014-5 when Genting went on a spending spree.  It bought a 787 aircraft, expanded into the river cruise market and, among other things, had plans for 1,000 guest residence ships and more.  Crystal Cruises Announces Three Ships (including Residences), River Cruises, a Yacht and Boeing 787 Journeys – Goldring Travel

While it was doing this, Genting was buying up or offloading old ships  (like Crystal Esprit and Mozart river cruise ship), Wider tenders and a couple of submarines and forcing them onto Crystal; seeking to somehow make Crystal “all things to everyone” in an instant. 

And then the ultimate kiss of death: Purchasing shipyards!  In September 2015 I wrote: Crystal Cruises – They Liked it So Much They Bought the Shipbuilding Company! (Sort of) – Goldring Travel

In that article I warned of the potential for a disastrous end based upon my many years in the superyacht industry watching and experiencing owners of superyachts under construction buying stressed shipyards…and then watching the yards go out of business.  The reason they go out of business is simple:  The loss of tension between the shipyard and the ship owner results in the already stressed shipyard not receiving enough money (through artificially low prices, delayed or even forgiven payments, over-leveraged positions, etc.).

I followed up the prior article with this one:  Crystal Cruises’ parent company, Genting Hong Kong, in Financial Stress. What Does It Mean? – Goldring Travel

What was the beginning of the end:  As I predicted, the shipyards’ failure – not Crystal Cruises – was the reason!  The Crystal Endeavor – Crystal’s new expedition ship – was being built by Genting’s shipyard and those exact problems arose. Things got so bad with financing and the construction status of the ship that the financing bank originally was going to take over the ship, but then apparently decided it didn’t want to be stuck with a potential white elephant and backed out of that process.  (I do want to note that I have no opinion on the quality of construction of the Crystal Endeavor, but I do have serious concerns about it due to these issues and the need to complete her without proper funding.)

It was when those financing the shipyards weren’t being paid, they forced Genting Hong Kong into liquidation. Without getting into the details of that – and honestly not know the laws in Germany or Hong Kong as to specific steps to be taken – generally all of the assets are frozen and operational costs stopped, so as to not cause a deeper financial hole to be dug by the company or to increase creditors’ debts. 

It does not mean Crystal Cruises or the shipyards or any other going concern will not be back in operation at some point, but decisions have to be made as to whether each is better operated, sold as a going concern or basically sold for its parts. 

Crystal Cruises – at least the Crystal Symphony and Crystal Serenity – are older, well-maintained and well-loved, classic cruise ships – with many staterooms rather than suites and with a number of them being oceanview with no balconies.  Though they have been worked on to make them more modern and welcoming in a market of newer, smaller, all-suite, luxury cruise ships they are a bit of a relic to another time. I also have a concern that Crystal’s heretofore extremely loyal guests are mostly of a reducing demographic (older folks) and there hasn’t been as much of a take up by younger demographics.  

So where do such ships go?  They will find a home, but my guess is that it will not be the United States market as so many US marketed ships now exist and many new ones are coming. It is sad and unfortunate.

And then there are the river cruise ships. Now those may well be bought up by one of the major river cruise companies who will, in turn, retire some of their older hardware. I could throw out names, but I don’t have any information yet so that would not be fair.

As for the Crystal Endeavor, now that is a great question!  Assuming she is as well-engineered and finished as she is supposed to be there are, again, a number of possible purchasers.  As most new expedition ships are not focused on the luxury market, but more expedition, there are less options. If I was to guess – and it is only a guess – I’d like to see Silversea pick this ship up!

So, in the end…if the end isn’t Crystal Cruises restarting…the ships that made Crystal what it was may, frustratingly, be the real casualties of the company. And it will because Genting Hong Kong had to go and buy shipyards to build other unrelated ships. 

What a shame.

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 US: (877) 2GO-LUXURY (877-246-5898)
  UK: 020 8133 3450
 AUS: (07) 3102 4685
Everywhere Else: +1 530 562 9232

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