Royal Caribbean Group's acquisition of the defunct Crystal Cruises' new expedition ship fixed one problem the company had. It then sought to fix a problem that it inherited.
Royal's luxury brand, Silversea Cruises, needed new hardware for Antarctica, which the polar-class Crystal Endeavor provides. But with the ship came a group of cruisers and travel advisors who lost commissions or deposits in Crystal's financial collapse.
Royal Caribbean Group and A&K Travel Group, which recently acquired Crystal's two other ocean ships, have different tactics to try to earn the trust of those who were burned by the brand as they prepare to relaunch the vessels.
"We know that there will be a lot of customers who will still be out of money," Silversea chief commercial officer Barbara Muckermann said, adding that the line's approach to guests is, "Whatever you haven't managed to recover, we will pay you back."
Royal was the first to lay out a plan, shortly after acquiring the 200-passenger Crystal Endeavor and making plans to begin sailing Antarctica in November. Under the RCL Cares program, the group said it will honor the deposits of guests who were booked on the Crystal Endeavor if they make a new booking on its Royal Caribbean International, Celebrity Cruises or Silversea brands.
The program will also accept future cruise credits at their paid value, Muckermann said, but customers will lose the 25% bonus Crystal awarded them for taking an FCC.
She said clients will have to wait until the Crystal bankruptcy, currently in a Miami-Dade County, Fla., court, is settled before being reimbursed by Royal.
For example, if someone is owed $12,000 from an Endeavor booking and they are paid $2,000 from Crystal's bankruptcy settlement, that guest can claim $10,000 from Royal in one of two ways: If the sailing occurs before the settlement, the company will later send that customer a $10,000 check. If the bankruptcy is settled before the sailing, the guest can apply $10,000 to the final cruise payment.
"It will cost us a lot of money," said Muckermann. "They're not going to be profitable bookings, but it's OK."
Guests will have to apply to the program by providing original invoices and information about whether they were reimbursed by travel insurance, credit card companies or others. Guests need to book by Nov. 30 to participate, although the bookings can be for travel through 2025.
Travel advisor commissions will be calculated based on the new booking amount, said Muckermann.
A&K Travel Group, which plans to relaunch the Crystal Cruises brand and its two largest ships, the Crystal Symphony and Crystal Serenity, is taking a different tack and not revealing details of how it might make customers and advisors whole.
A&K CEO Cristina Levis said the brand expects to offer "goodwill initiatives for the 2023 sailings." But it has been steadfast that while it is relaunching the line, it is not responsible for the bankruptcy and failed finances of Crystal while it was owned by Genting Hong Kong. In a statement A&K said, "We are not involved in the case and have nothing to do with approving or paying claims. We are legally not a party to, and have no say, in these court-appointed efforts."
"We sympathize with those travel partners and customers that are still waiting for claim settlements from Crystal Cruises," another A&K statement said.
A&K has offered few details about its vision for the reboot of the line since acquiring the two ships in June, but it plans to refurbish the ships and hopes to hire former crew members. Crystal Cruises' last CEO, Jack Anderson, will resume his leadership role at the brand.
A new ship at a good price
For Royal, the decision to cover the financial losses of former Crystal customers was likely a factor in its decision to go after a 2021-built, PC6 polar-class ship. Building a new one would be much pricier and take years to finish, said analyst Assia Georgieva, principal at Highland Beach, Fla.-based Infinity Research.
"It makes sense that RCG/Silversea is willing to bite the bullet on covering existing deposits, and that would most certainly have factored into the bidding process and the discount to cost-to-build," said Georgieva.
The ship sold for $275 million, significantly below its build cost, according to Royal. The group also bought the Crystal Endeavor name and renamed the ship the Silver Endeavour.
The vessel will replace the 144-passenger Silver Explorer in Antarctica this year, said Muckermann. The Explorer will sail the South Pacific and Australia before leaving the fleet in November 2023.
Mike Estill, COO of the Western Association of Travel Agencies in Oregon, applauded Silversea's strategy but also said A&K is trying to put back together the "puzzle pieces" of Crystal Cruises and is not responsible for the original line's financial faults.
"I don't know that anybody expects anybody buying the hardware to make them whole," he said. "Moving forward, it's how to attract the clients back."
However, he called Royal's plan a smart move.
"They needed a new shiny ship and here they got one. ... Even if they covered three months of full-paid cruises, which I doubt they're going to have to, they're still way better off than if they had gotten in line to have another new ship built and it was going to be delivered somewhere in 2028," said Estill. "It's a brilliant move on their part."