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What is the Financial Risk of Booking with Crystal Now?

Crystal Cruises - boards.cruisecritic.com
This may be a little controversial and treated as heresy by some - but I think the time has come to ask this question

"What is the Financial Risk of Booking with Crystal Now?"

We've seen delays in the announced plans of the new all exclusive Crystal eg:

- Crystal Symphony and Crystal Serenity to undergo unscheduled extended dry docks - resulting in scheduled and sold voyage dates in 2017 and I expect 2018 being cancelled

- New Ocean builds delayed from 2018 to 2022

- River Yachts delayed from scheduled and sold launch dates in 2017 - planned cruises cancelled

- Crystal Esprit moved from one ocean to another - and scheduled and sold cruises cancelled

- Crystal Air - changes in the line up of aircraft announced - I have no idea of the impact as we don't hear from any Crystal Air guests

- The new website which interfaces to the new reservations system struggling to provide up to date information and the ability for customers to access bookings for 2019

I've probably missed some but I think there's sufficient evidence that there is a trend emerging here

Oh well I guess delays aren't unexpected, and maybe Crystal have been unlucky for so many delays to hit them. They've also compensated guests on those voyages that are impacted (and that won't have been a cheap exercise)

I'm not commenting on the question of the customer confidence issues that arise from these delays and the frustrations that many must be feeling at having their holiday plans messed up with these delays and changes - maybe that's a topic for another thread

What I am interested in is the financial impact that these investments and the delays in realising revenue from these new services might (must?) be having on Crystal Luxury Corporation Ltd and it's subsidiaries - now I'm not a shareholder so I don't particularly care about it except...

The flow on issue is my personal exposure to this risk involves both deposits and fully paid cruises from 2017 to 2019 - I'm sure many (most?) of you also have some level of exposure. Remember when deposits rose from 10% to 20% a couple of years ago...more funds for Crystal upfront

So what happens if Genting decide to cut their loses and stop funding this "drunken sailor" spending spree and capital requirements and Crystal Luxury Corporation Ltd goes belly up? What happens with our pre-payments?

If it goes belly up watch it reappear under new ownership who take on the assets for a pennies in the dollar payout and don't get saddled with the debt (often a related company of the current owners - how often do we see that happen?)

Gone or Protected?

For those with travel insurance they probably have cover for this, and those paying by credit card may have some cover through included travel insurance policies (but check the policy wording) - but for many who don't take out policies until close to final cancellation date, or who self insure, what happens to those funds? I suspect they'll be gone...

I seriously doubt that these prepayments are set aside in a trust account and not touched - I suspect they're used to find day to day activities

So what do you think the risk is?

I think it may be time to reassess the risk of having so much exposure to this

Anyone from Crystal care to comment on this potential risk and how it's managed?
Date: Mar 18, 2017   


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