Agents left to sort through Renaissance closure

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NEW YORK -- Renaissance Cruises' termination of operations and bankruptcy filing Sept. 25 stranded passengers and crew at ports from the Mediterranean to Tahiti, leaving travel agents to sort through the mess.

Fort Lauderdale, Fla.-based Renaissance filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for Florida's Southern District after rumors of an impending shutdown circulated in the trade.

By the afternoon, Renaissance, as reported, had shut down its telephone reservations system, which later carried a message saying the line had ceased operations and disembarked passengers from its ships. Eight of Renaissance's 10 ships were cruising in Europe and two were in Tahiti.

The message said Renaissance was "making arrangements" to get passengers and crew back home and advised clients with pending bookings to "contact your travel agent or credit-card company for refund arrangements." The message also advised callers to monitor the line's Web site, www.renaissancecruises.com.

Because none of its cruises departed from U.S. ports, passenger funds are not covered under the Federal Maritime Commission's bond program.

In a statement, Manfred Ursprunger, Renaissance's president and chief executive, said, "In light of the severe, unexpected drop in leisure travel following the terrorist attacks..., we concluded that this was the only responsible action we could take to exit our business in an orderly fashion."

Renaissance was widely believed to be in a weakened financial state before Sept. 11. It received an $80 million cash infusion as part of a $300 million buyout and debt restructuring last April.

Renaissance began operations in 1989, emphasizing smaller ships and unique itineraries, but it evolved a direct-sales strategy that sometimes overtly discouraged passengers from using agents.

After it launched an aggressive fleet-expansion program the company embraced agents in mid-2000 and won a significant number of converts among retailers, who found that the line's product was popular with many clients.

But the surplus of ships drove Renaissance to offer discounted rates. As one agent put it, "We shied away from them. You can't sell 12-day cruises for $799 and survive."

Analyst Scott Barry of Credit Suisse First Boston said he expects the company to liquidate. "In our view, smaller 700-berth vessels... have become essentially non-competitive in the North American market."

He added that, "according to our sources, crucial incremental financing was pulled following the Sept. 11 attacks."

CSFB Private Equity, a global private equity arm of Credit Suisse First Boston, has a 5% share of Renaissance.

For travel agents, the shutdown came without warning. "Renaissance never notified us," said Anthony Manfra, owner of Cruise Holidays in Fort Lauderdale.

He learned of the bankruptcy when he got a call from a former employee who worked at Renaissance. He said he felt the line was "teetering" before the terrorist attacks, which "pushed them over."

Ira Kaplan, owner of Cruise Holidays in Englishtown, N.J., said, "We stayed away from Renaissance" after the refinancing and management changes earlier this year.

Claudia Fullerton, chief marketing officer of CSA, a San Diego-based travel insurance provider, said her company is facing "one of the biggest bags of exposure out there," a sum she estimated to be "in the millions of dollars" because CSA was among the biggest Renaissance policy writers.

Fullerton said there are "hundreds" of vacationers who bought CSA policies to cover the vacations on Renaissance, although she did not yet have exact numbers.

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