Approaching two years after it entered bankruptcy, Crystal Cruises has completed the relaunch of its ocean cruise operations, with its second cruise ship, the Crystal Symphony (IMO 9066667), returning to serice, following the relaunch of the Crystal Serenity (IMO 9243667) at the end of July. Crystal Cruises, under new ownership, restarted cruising a month ago (IMN June 29th 2022 and earlier dates).
The cruise line, launched in 1990 by NYK Group, has had a colourful financial history. NYK saw it as its entry into the modern cruise industry. It intended to focus on the upper-premium segment of the US market. Over the years Crystal evolved to become one of the leading luxury brands, until in 2015 it was sold by NYK to Genting Hong Kong for a reported $550m. Genting Hong Kong, part of the expansionist Asian conglomerate genting, said that it would be further expanding the brand and increasing its part of the global luxury cruise market.
Part of that included the addition of deluxe river cruise ships in Europe, a yacht cruise ship, and a luxury exploration cruise ship. Unfortunaely this expansion was accompanied by an increasing in financial gearing, and the exploration cruise ship was to be one of the final dominos. There were several delays in the building, and then the pandemic struck. The exploration ship began sailing but the company’s attempt at a luxury charter air service failed and finally, in January 2022, they were forced into bankruptcy with the financial collapse of Genting Hong Kong, triggered by a German landt goovernment’s decision not to come up with further funds to rescue Genting Hong Kong’s by-now death spiral into illiquidity. Simply put, it ran out of cash.
However, the company still had assets. The bankruptcy resulted in creditors in various countries trying to get cruise ships arrested in friendly nations’ ports. Avoiding the USA, the ships docked in the Bahamas and ferried the passengers back to the US on boats not under threat of seizure.
Spotting that the Crystal brand, while necessarily cashflow negative during the pandemic, still had a sound business base, Heritage Group, a private equity group with investments in the travel and tourism sector, and led by Manfredi Lefebvre d’Ovidio, purchased the ships at auction, along with the Crystal Cruises brand. The operation became luxury travel operation A&K Travel Group.
In 2023 the world is both markedly different from when NYK started its luxury brand 33 years ago, and yet in other ways it is much the same. Just as the relatively poor will always be with us, so will the relatively rich – and a luxury brand with a strong reputation for elitism will always have a potential for higher margins.
The difference of course is that lots of people have spotted this high-margin opportunity. The battle, therefore, is as much for brand reputation and image as it is for more standard competitive advantage (such as price).
A&K undertook a a multi-million-dollar refit of both cruise ships, with Italy’s Fincantieri taking on the task of transforming the Crystal Serenity and Crystal Symphony. Both ships were sent to Trieste, and A&K started its competitive journey by moving the vessels further upmarket. The number of suites was increased and passenger capacity was reduced. Fincantieri said that 230 staterooms were restyled into 100 new suites while another 100 cabins were completely modernized, including the introduction of single occupancy cabins.
The 2003-built, 68,870 gt Crystal Serenity was the first to return to service. The passenger manifest was reduced to 740. Mass-market cruise holidays this was not. The target market might be described as “elite plus”. The 1995-built, 51,000 gt Crystal Symphony had its capacity reduced to 606 passengers.
Crystal Serenity sailed for Marseilles on July 31st. Crystal Symphony has now departed from Piraeus, Greece on its first cruise. In an effort to emphasize “change with continuity”, A&K noted that it had brought back more than 80% of its former crew, including most of the senior officers.
Cristina Levis, CEO of A&K Travel Group, said that “we are so proud that Crystal Symphony has officially joined Crystal Serenity back in the water, signaling an exciting new chapter for Crystal – two ships refurbished and back in service in under a year”.
The attempt by Genting Hong Kong to move into river cruises and expeditions has not been taken on by A&K. The new expedition cruise ship, Crystal Endeavor (IMO 9821873), was sold by the creditors to Royal Caribbean Group, which relaunched it for Silversea Cruises. Meanwhile the river cruise ships were sold separately to a new company in Germany – Riverside Luxury Cruises (IMN January 12th 2023). That is an offshoot of the Seaside Collection, a German company that owns and manages boutique hotels in Europe and the Maldives and which want to expand with a luxury river cruise brand. The five vessels will operate under the Riverside brand with the subnames Mozart, bach, Ravel, Mahler and Debussy.
Other remnants of the dismembers Genting Hong Kong operation were World Dream (IMO 973317), which was sold to Cruise Saudi earlier this year (IMN March 7th)
A&K said that it was planning the development of four new ships in the next six years, which would consist of two ocean ships and two expedition vessels.
2003-built, Bahamas-flagged, 68,870 gt Crystal Serenity is listed by Equasis owned by Crystal Serenity Ltd care of manager Crystal Cruises LLC of Los Angeles, California. ISM manager is V ships Leisure Sam of Monaco-Ville, Monaco. It is entered with UK Club on behalf of Crstal Serenity Ltd. As of September 3rd it was in Iceland.
1995-built, Bahamas-flagged, 51,044 gt Crystal Symphony is owned by Crystal Symphony Ltd care of Crystal Cruises LLC of Los Angeles, California. ISM manager is V Ships Leisure SAM of Monaco-Ville, onaco. It is entered with UK Club on behalf of Crystal Symphony Ltd. As of September 3rd the vessel was in the Aegean Sea, travelling between Greek islands.