While Crystal has suspended ocean and expedition sailings through April 29 and river cruises through May to 'evaluate options,' its fate is in the hands of joint provisional liquidators and it would be surprising if it's back to business as usual after then.
However, half a dozen senior cruise industry executives, most with luxury expertise, see opportunities under different ownership. They expressed varying thoughts on if Crystal would likely remain whole or be broken up, the potential buyers and how long it could take to be running again under new investors.
'Crystal is a very strong brand with a loyal and dedicated following of people who truly enjoy the brand. That loyalty has been tested through the pandemic and guests, while frustrated with cancellations and rescheduling of cruises, continued to show their dedication by rebooking and rebooking again,' said Orlando Ashford, strategic advisor to private equity firm Sycamore Partners, which last year acquired Azamara in a $201m cash deal and immediately bought a fourth ship.
'People really enjoy this brand and how Crystal delivers onboard and for that reason it deserves a future. I believe with the right investment and partnership this brand can be leveraged into a very bright future as the industry comes back,' Ashford said.
He thinks private equity and a current cruise operator would all be interested in Crystal, and he could see interest in the brand in its entirety or specific parts and assets.
Crystal fields the 1995-built Crystal Symphony, the 2003-built Crystal Serenity, brand-new expedition ship Crystal Endeavor and five river vessels, the double-wide Crystal Mozart and four smaller, newly built sister ships.
Ocean ships the priority?
'I would think that the Crystal brand and its luxury ocean fleet are the go-forward priority, and opportunity,' said David Giersdorf, president & CEO, Global Voyages Group. 'There may be a willingness and need to sell or dispose of the expedition and river vessels. And there may be buyers for those assets. There appears to be capital available in the right circumstances.'
Giersdorf cited the recent refinancing accomplishments of the major brands, Lindblad Expeditions' newly announced $340m private notes offering and Margaritaville's entry into cruising.
In contrast, Larry Pimentel, past president and CEO of Azamara, SeaDream Yacht Club, Cunard and Seabourn, and a board member of Virtuoso Travel, thinks Crystal's older ships may not be attractive given tougher new future rules of operation.
Or is expedition ship the hot ticket?
'The operating performance on the riverboats will be closely evaluated along with the profit performance. The most interesting vessel is the new expedition ship which has an undefined performance in a hot sector,' he said.
'Another consideration is the client base who is older than industry averages, does not want anything to change and may not be the most ideal consumer base for the future success.'
'The brand needs new ships'
'The brand needs new ships, that's for sure,' said Dietmar Wertanzl, president/CEO, CMI Leisure Management and former SVP Crystal. He sees the vessels planned for new entrant Explora Journeys as 'head-on competition with much superior hardware. They've basically copied the Crystal model size-wise.'
Crystal, Wertanzl continued, is perceived as 'top of the line,' but it 'needs a future, a commitment for new ships.' An owner must have deep pockets to renew the fleet, a strategic vision and a passion for making Crystal competitive with the best that's out there. He said such investors are around and have looked at the company.
Repositioning to premium?
If a champion like that doesn't emerge now, there may be buyers who'd position the ships down a notch and have a good run in a different market segment. For a while Crystal's ocean per diems haven't been up there with those of other luxury players, sources said.
'It's certainly an iconic brand,' another senior cruise executive stated, 'but it needs a rethink and to focus its direction on one thing and get one thing going right and get it back to being a top performing brand that's performing commercially.'
Pimentel noted Crystal comprises a small sliver of overall cruise capacity yet has an outsized image because its 'performance at sea has been among the best in the cruise industry for decades. Guests generally loved the experience. The teams at sea and those that guided them historically, like Thomas Mazloum (current Disney Cruise president), were stellar leaders who drove extraordinary onboard performance.'
The pandemic hurt Crystal, like all cruise players but, more importantly in Pimentel's view, the brand's been affected by its parent company’s management style and finances.
Toll on the industry
He also thinks Genting HK's collapse could affect credit card policies and export credit agency financing for the entire cruise industry.
These important matters aside, Pimentel predicted there will be interested buyers for Crystal — even a competition: 'Some buyers the industry will know, some buyers are new, others will be fire sale opportunists.'
With the provisional liquidators for Genting HK just appointed in a court hearing Thursday, could some news of a plan for Crystal emerge fairly soon?
In Ashford's view, while there's a lot of 'interest, angst and energy' in situations like this, 'They do take time. It can be numerous weeks to a few months before this is completely settled.'
Pimentel was more cautious on the timeline. Liquidation processes, particularly one with the complexity of Genting's, 'always take longer than anticipated,' he said. 'Do not expect quick answers.'
Trust and relationships
While all this is happening, Giersdorf hopes Crystal communicates openly about the pause in operations, the reason behind it and the actions being taken. 'A very high level of engagement with customers and the trade will be essential as more details and the full picture emerges,' he said. 'Brand value resides in trust and relationships, both of which are fragile in such circumstances.'
Others said winning back the trust of travel advisors won't be easy following slow refunds during the pandemic.
However, Alex Sharpe, president/CEO of Signature Travel Network, said: 'The Crystal guest and travel advisor loyalty continues to astound me. If the bankers/trustees take the time to understand the brand value versus the assets alone, I absolutely believe there is a future for Crystal.'