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
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
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
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
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
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.