Crystal Cruises’ proud boast was that it was the most awarded luxury line. This week, it announced a preview of the deployment for the all-suite, 62-guest Crystal Esprit yacht for 2023 and through to the first quarter of 2024.
It includes 35 all-inclusive luxury sailings in 2023, and 11 idyllic sojourns through the Seychelles islands and bays, perfect for tropical water adventures and outdoor activities.
It sounded like the usual aspirational launch – you could almost hear the champagne corks popping.
Except they weren’t. Behind the scenes, things were slightly different.
Crystal is owned by the mighty Genting casino empire, which also owns Dream Cruises, Asia’s first luxury line, and Star Cruises. It also owns the Werften shipyard in Europe, where Crystal’s first expedition ship is under construction.
Last week, the company did something extraordinary in shipping circles – Genting Hong Kong suspended payments to creditors on almost $3.4 billion loans because of COVID-19.
It’s explanation? It was holding on to the cash “to maintain critical services” for its operations.
According to reports, the announcement came after the company missed a $6 million payment of fees related to the construction of two new ships.
Genting said it hoped to restructure some $3.4 billion in debt with creditors.
“The company’s remaining available cash will be reserved to maintain critical services for the group’s operations, while the company will endeavour to negotiate a holistic debt restructuring solution,” Genting Hong Kong said in a statement to the Hong Kong stock exchange.
In its statement, the company warned that its suspension of payments to creditors would likely result in the company being considered in default of multiple debt obligations.
“Such events of default would give rise to a right for requisite creditors of the group to declare that the financial indebtedness owed to them are immediately due and payable,” the company noted.
The company said it planned to call a meeting of creditors to discuss restructuring and refinancing options. It said it would ask creditors “to refrain from taking any enforcement action so that the stakeholders of the group can have a stable platform to negotiate and implement the restructuring.”
Hong Kong analysts said raising money in the current market was tough, and some suggested selling assets may be its only choice.
Genting’s stock price slid almost 40%. And Crystal was forced to put a statement saying: “We are not going out of business.”
Crystal recently canceled the remainder of its 2020 season for its ocean and river cruises. But the line, which has built a formidable river fleet of four ultra luxury river ships, and its two ocean ships are soon to be joined by the Crystal Endeavour, a luxury expedition vessel similar to Scenic’s highly successful Eclipse.
But the line sits oddly with Genting’s ambitions for Dream as a major big ship player, despite its claim of being Asia’s first luxury line. It has started construction of ships that could carry as many as 9,000 – though quite how this strategy sits in an age of coronavirus isn’t clear.
Crystal’s well-loved but ageing two mid-sized ocean vessels have won many awards for their service standards, and has many friends in Australia. But the company closed its office recently and folded sales with the team from Dream.
Crystal won top honours in the Condé Nast Traveler Readers’ Choice Awards for a record 26 years including, in 2019, for Best Medium-Ship Cruise Line for Crystal Cruises, Best Small-Ship Cruise Line for Crystal Yacht Cruises and Best River Cruise Line for Crystal River Cruises.
Crystal was also voted “World’s Best” by the readers of Travel + Leisure for 24 years, including, in 2017 and 2020, Best River Cruise Line for Crystal River Cruises; and won “Cruise Line of the Year” and “Most Luxurious Guest Experience” by Virtuoso for 2018 & 2019.
It’s an amazing heritage. But what the future holds is now in question.