One of my readers asked my opinion on Silversea's now discounting a cruise he purchased long ago so much so that the 15% discount he received for pre-paying many months early is now no discount at all...but rather a significant cost (due to loss of his income on his money). Is there enough "discounting" in that sentence?
Back in November 2008 I wrote a blog entry Silversea - Lost at Sea? wherein I discussed a number of issues concerning my about Silversea. One of my biggest concerns was every...and I mean every...indication that cash flow was being coming a very real concern. This was further discussed in my blog entry Silversea - A Call From The Captain.
The fact is that when a cruise line is giving you a very significant discount for early payment you really have to know that it is not manna from heaven. It is, without question, a way to get your money earlier then the cruise line (or whomever) is actually entitled. I find this in my legal world as a "red flag" when done by a contractor (yacht, commercial or residential). There is no question that YOUR money is going to be used to pay the line's (or contractor's) OTHER obligations.
Now, I don't believe it is the same, but it is not dissimilar to a Ponzi scheme where the next investors pay the prior investor's "income" because the prior investor's money wasn't actually invested...or not as it should have been. Cruise Value Center failed a few months ago when new bookings stopped coming in at the same rate they had been. As a result the NEW money was insufficient to pay for the OLD obligations.
I do want to pause and note that Crystal Cruises has, for quite a while, offered a slight discount for early payment (around 3.5% versus Silversea's 15%). Crystal's figure is essentially consistent with giving a guest a slightly better return than they would get from a safe investment. To me this is a good marketing tactic because it emotionally and financially vests their guest in the upcoming cruise (less thought of canceling an already paid for cruise) while being logically related to normal finances.
So, do I believe Silversea is going to go to bat and provide some additional benefits for those expecting a true 15% additional discount since its inability to attract sufficient passengers required a further discounting of its fares? Probably not. And that is not because Silversea wants to treat you like you were just scammed, because it was not its intention! It probably will not respond because it can't; either directly because of its own cash demands or it then runs down yet another slippery slope of further discounts. Hopefully it will consider at least a couple of complimentary dinners in its extra charge restaurants...but that will eat into its onboard revenue (assuming the restaurants are running at full capacity).
It is not a pretty picture. I wish I could find something good to say. Silversea has been a very good product until recently. Most of my clients, possibly in part because of my philosophy (a caveat), just are not willing to book Silversea. There are other options out there. For luxury, there is no question from anyone that Seabourn is either as good or better. For itineraries, Seabourn and Oceania (and Azamara - should we not forget this line!) are suitable or better alternatives. So many are left with little motivation to find logic in risking their cruise, if not their money, on Silversea.
Hopefully...and I am hopeful...this will change.
Showing posts with label Cruise Value Center. Show all posts
Showing posts with label Cruise Value Center. Show all posts
Friday, April 3, 2009
Wednesday, January 28, 2009
More Bad News for Cruise Value Center Customers: They Have Another Problem - Prime Travel Protection Protects No More!
On November 13, 2008 I wrote about Cruise Value Center closing its doors (http://goldringtravel.blogspot.com/2008/11/cruise-value-center-shuts-its-doors.html). Today the company that insured many of the Cruise Value Center clients has gone into liquidation and is probably going to file for Chapter 7 bankruptcy (i.e. no chance of recovery).
According the ASTA, American Society of Travel Agents, in a notice today:
Prime Travel Protection, a travel insurance company based in Arvada, Colo., announced that it has initiated a liquidation of services, effective Jan. 26, 2009. A statement on the company's Web site indicates that customers will be receiving written communication relating to the processing and resolution of claims and that all inquiries will be handled by legal counsel or court appointed trustee. According to Travel Weekly, Prime Travel Protection President Jerry Watson stated that the company is looking at a Chapter 7 bankruptcy or self-liquidation with a trust receivership, claims will be handled through the bankruptcy court or the trust, and funds to settle claims would come from liquidating assets.
Customers who used a credit card to purchase a policy from Prime Travel Protection and determine that their policy is no longer valid may contact their credit card company to dispute the charge. Under the Fair-Credit Billing Act, cardholders have 60 days from the time they receive the billing statement on which a charge first appears to refuse payment for services not rendered. Instructions for doing so appear on the back of all credit card statements. Even if a customer has already paid the charge, or if the 60-day window noted above has passed, it is still advisable to request a credit for the charge....Customers who purchased travel insurance from Prime Travel Protection and have not yet traveled should consider obtaining alternate insurance coverage, if applicable.
Prime Protection Travel's website merely states:
Prime Travel Protection, Inc. has initiated an orderly liquidation of services, effective Monday, January 26, 2009.
All inquiries will be handled by legal counsel and/or court appointed trustee.
We regret to inform you of this decision, however it was undertaken after consultation with our professional advisors.
You will be receiving written communication relating to the process and resolution of your claim.
In short, if you paid for Prime Travel Insurance and have not yet traveled, you probably don't have insurance, but may be able to recover the premium you paid for the insurance if you paid with, and dispute the charge through, your credit card. You will need, however, to obtain alternative insurance. (Those with pre-existing conditions or within the penalty period, this may create additional issues for you so be careful before - and what - you purchase.)
If you already have a claim pending with Prime, I would assume your chances of a recovery is slim.
According the ASTA, American Society of Travel Agents, in a notice today:
Prime Travel Protection, a travel insurance company based in Arvada, Colo., announced that it has initiated a liquidation of services, effective Jan. 26, 2009. A statement on the company's Web site indicates that customers will be receiving written communication relating to the processing and resolution of claims and that all inquiries will be handled by legal counsel or court appointed trustee. According to Travel Weekly, Prime Travel Protection President Jerry Watson stated that the company is looking at a Chapter 7 bankruptcy or self-liquidation with a trust receivership, claims will be handled through the bankruptcy court or the trust, and funds to settle claims would come from liquidating assets.
Customers who used a credit card to purchase a policy from Prime Travel Protection and determine that their policy is no longer valid may contact their credit card company to dispute the charge. Under the Fair-Credit Billing Act, cardholders have 60 days from the time they receive the billing statement on which a charge first appears to refuse payment for services not rendered. Instructions for doing so appear on the back of all credit card statements. Even if a customer has already paid the charge, or if the 60-day window noted above has passed, it is still advisable to request a credit for the charge....Customers who purchased travel insurance from Prime Travel Protection and have not yet traveled should consider obtaining alternate insurance coverage, if applicable.
Prime Protection Travel's website merely states:
Prime Travel Protection, Inc. has initiated an orderly liquidation of services, effective Monday, January 26, 2009.
All inquiries will be handled by legal counsel and/or court appointed trustee.
We regret to inform you of this decision, however it was undertaken after consultation with our professional advisors.
You will be receiving written communication relating to the process and resolution of your claim.
In short, if you paid for Prime Travel Insurance and have not yet traveled, you probably don't have insurance, but may be able to recover the premium you paid for the insurance if you paid with, and dispute the charge through, your credit card. You will need, however, to obtain alternative insurance. (Those with pre-existing conditions or within the penalty period, this may create additional issues for you so be careful before - and what - you purchase.)
If you already have a claim pending with Prime, I would assume your chances of a recovery is slim.
Thursday, November 13, 2008
Cruise Value Center Shuts Its Doors! What Next?
On Tuesday I reported a major discount cruise travel agency had gone out of business. (http://goldringtravel.blogspot.com/2008/11/use-caution-and-common-sense-when.html ). Yesterday the word was out: Cruise Value Center shut its doors.
Cruise Value Center, it is reported from a number of sources, failed to transfer $3,000,000+ in cruise passenger payments to the cruise lines and another $1,500,000 in travel insurance payments to Prime Travel Protection. Obviously, this leaves quite a number of passengers without their cruises and/or without insurance.
What Should You Do First?
The first thing you should do is contact the cruise lines directly to be sure your booking is in place and paid for. (If you paid only a deposit, make sure that is in place.)
Then contact the insurance company, if you used Prime Travel or some other third party insurer, and confirm your insurance is in place.
If you paid with a credit card and find either your cruise or insurance is not in place, but the charge has been made, have the credit card company work with you to either get the cruise/insurance or, more likely, obtain a credit for those amounts to your credit card. (If you paid with cash, you may well have problem. Contacting CVC isn't going to happen, so you may need to wait to be contacted...but more on that below.)
If the insurance is in place, but not the cruise, you may well have a claim against the insurance policy for the amounts you paid, but were not paid over to the cruise line. (Word of caution: If you were issued the insurance policy...not just billed for it...but CVC did not forward the money to Prime Travel, you may still have coverage! Check with Prime Travel, your state consumer affairs department or your attorney.)
Where Do You Go From There?
From what I understand, the bookings with CVC are being handled by Best Price Cruises; a Florida cruise discounter and one of the largest presences on the internet. You will probably have to speak with Best Price Cruises to get any information on your cruises. In this transition period, this may be harder than you think because of the logistics involved and the number of passengers affected. But BPC is a big outfit and with new booking volumes down, they may have the staff on hand available sooner than later.
That said, while I have no knowledge as to BPC's financial situation, I am aware that a number of companies that have a large internet business are under huge financial pressures, so you may want to be sure, if you have a CVC booking that you are not "going from the frying pan into the fire". (Maybe CVC's failure is BPC's saving grace? Maybe BPC is solid as a rock? I have not a clue!)
Also, you may now feel there is a benefit to knowing your travel agent a someone who actually cares about you and your booking. The concept of "All I care about is the lowest price" may no longer give you sufficient comfort. Limited communication by way of an occasional form email or disinterested phone call of 30 seconds may not be enough. You have questions. You have concerns. You need answers. You might even need a little bit of hand-holding.
While CVC technically controls your booking, you may ask to have your booking transferred to another agency. You may have the ability to simply cancel your cruise and then rebook with a new travel agent.
I know there are a number of "big box" agencies that are in trouble. Their model, as I briefly explained before, is to have a huge volume of lower priced cruises. When that huge volume drops significantly there is a huge hole that simply cannot be filled. While it is hoped that people will start booking more cruises soon, as the travel agents and cruise lines feel the pinch, not all travel agencies working with this "high volume/low profit" business model will survive.
Does that mean you should book directly with the cruise lines? In most instances: No. There are strong travel agencies out there and they still provided many added values (such as complimentary Ensemble Experiences and cocktail parties, travel books with new bookings, etc.), information and discounts. I believe now is the time to search out those agencies for they will work hard to earn your business.
Goldring Travel does that every single day. That is why our motto is, "Be Treated By Your Travel Agent As You Will Be Onboard!" That said, I work with individuals and never hope to be a mega-travel agency. I love doing what I do. Alas, This Is My Yacht!
Cruise Value Center, it is reported from a number of sources, failed to transfer $3,000,000+ in cruise passenger payments to the cruise lines and another $1,500,000 in travel insurance payments to Prime Travel Protection. Obviously, this leaves quite a number of passengers without their cruises and/or without insurance.
What Should You Do First?
The first thing you should do is contact the cruise lines directly to be sure your booking is in place and paid for. (If you paid only a deposit, make sure that is in place.)
Then contact the insurance company, if you used Prime Travel or some other third party insurer, and confirm your insurance is in place.
If you paid with a credit card and find either your cruise or insurance is not in place, but the charge has been made, have the credit card company work with you to either get the cruise/insurance or, more likely, obtain a credit for those amounts to your credit card. (If you paid with cash, you may well have problem. Contacting CVC isn't going to happen, so you may need to wait to be contacted...but more on that below.)
If the insurance is in place, but not the cruise, you may well have a claim against the insurance policy for the amounts you paid, but were not paid over to the cruise line. (Word of caution: If you were issued the insurance policy...not just billed for it...but CVC did not forward the money to Prime Travel, you may still have coverage! Check with Prime Travel, your state consumer affairs department or your attorney.)
Where Do You Go From There?
From what I understand, the bookings with CVC are being handled by Best Price Cruises; a Florida cruise discounter and one of the largest presences on the internet. You will probably have to speak with Best Price Cruises to get any information on your cruises. In this transition period, this may be harder than you think because of the logistics involved and the number of passengers affected. But BPC is a big outfit and with new booking volumes down, they may have the staff on hand available sooner than later.
That said, while I have no knowledge as to BPC's financial situation, I am aware that a number of companies that have a large internet business are under huge financial pressures, so you may want to be sure, if you have a CVC booking that you are not "going from the frying pan into the fire". (Maybe CVC's failure is BPC's saving grace? Maybe BPC is solid as a rock? I have not a clue!)
Also, you may now feel there is a benefit to knowing your travel agent a someone who actually cares about you and your booking. The concept of "All I care about is the lowest price" may no longer give you sufficient comfort. Limited communication by way of an occasional form email or disinterested phone call of 30 seconds may not be enough. You have questions. You have concerns. You need answers. You might even need a little bit of hand-holding.
While CVC technically controls your booking, you may ask to have your booking transferred to another agency. You may have the ability to simply cancel your cruise and then rebook with a new travel agent.
I know there are a number of "big box" agencies that are in trouble. Their model, as I briefly explained before, is to have a huge volume of lower priced cruises. When that huge volume drops significantly there is a huge hole that simply cannot be filled. While it is hoped that people will start booking more cruises soon, as the travel agents and cruise lines feel the pinch, not all travel agencies working with this "high volume/low profit" business model will survive.
Does that mean you should book directly with the cruise lines? In most instances: No. There are strong travel agencies out there and they still provided many added values (such as complimentary Ensemble Experiences and cocktail parties, travel books with new bookings, etc.), information and discounts. I believe now is the time to search out those agencies for they will work hard to earn your business.
Goldring Travel does that every single day. That is why our motto is, "Be Treated By Your Travel Agent As You Will Be Onboard!" That said, I work with individuals and never hope to be a mega-travel agency. I love doing what I do. Alas, This Is My Yacht!
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