Crystal Cruises says it's 'not going out of business,' still processing refunds

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One of the world's best-known luxury cruise lines, Crystal Cruises, tried to assuage customer fears about its viability late Thursday by issuing a statement saying it wasn't on the brink of shutting down.

"It is important to understand that the company is not going out of business," the Miami-based line said in the statement. 'Whatever option our parent company pursues, it will allow Crystal to operate its business."

Talk of a possible collapse of Crystal Cruises was swirling on Thursday among travel agents and cruisers after the line's parent company, Hong Kong-based Genting Hong Kong, disclosed that it had stopped making payments to creditors. The company is contending with a sharp loss of revenue due to the coronavirus crisis.

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The announcement came two days after the company missed a 3.7 million euro payment of fees related to the construction of certain ships.

The payment was due from subsidiaries of the company related to new vessels, and the failure to pay the fees puts the subsidiaries into default, the company said.

Cruise industry publication Cruise Week on Thursday reported that the Genting Hong Kong announcement had spooked travel agents who sell Crystal voyages.

Related: How to book a cruise with points and miles

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"This could be the catalyst for agents and their clients to think twice about putting down deposits or final payments" for Crystal trips, it quoted one top travel seller as saying.

Travel agents and their customers also expressed worries about refunds they were owed for canceled sailings, given Genting Hong Kong had stopped paying its creditors.

But in its statement, Crystal suggested refunds for canceled cruises continued to be processed.

"We have always been committed to honoring our contractual obligations with guests and travel partners, including the processing of refunds," the line said.

The Points Guy has received a significant number of complaints from readers in recent months about Crystal Cruises not sending them refunds for canceled trips.

"It's been 135 days, and we have still had no resolution (i.e., refund), or any contact from Crystal Cruises," one reader, Phyllis Sims of Baton Rouge, Louisiana, wrote us several days ago.

Related: 21 tips and tricks that will make your cruise go smoothly

Sims and three of her friends canceled a Crystal sailing on March 25 and are owed thousands of dollars from the line. The line initially promised a refund within 90 days.

"We are not fans of a business using our money as a zero-interest loan, even with the pandemic," Sims said. "And we are just as troubled by the lack of communication from Crystal Cruises."

Sims said her in-house Crystal travel advisor had not responded to any of her queries about the refund. She said she was so fed up she just filed a dispute about the charges with American Express. She used The Platinum Card® from American Express to make the booking.

In contrast to Crystal, American Express has been "amazing" in its response, she said.

A spokesperson for Crystal Cruises, Susan Robison, has told The Points Guy on multiple occasions that the line continues to process refunds as fast as it can but has struggled with the sheer volume of refund requests.

"We have canceled hundreds of cruises and provided tens of millions of dollars of refunds," Robison said recently. "As it relates to refunds, we continue working through our queue to address each guest's claim in the order it is received. This is a manual process and, where our reservation and payment systems can handle a normal refund environment efficiently and smoothly, they were not designed to handle this volume in such a short period of time."

Genting Hong Kong is the parent company of Crystal Cruises as well as two Asia-based cruise lines: Dream Cruises and Star Cruises. It also owns the Werften shipyard in Germany, where the first expedition ship for Crystal Cruises currently is under construction. In addition, it's a joint venture partner in Resorts World Manila in the Philippines.

Related: Cruise executives say they are in no rush to return to service

In announcing that it had stopped making payments to creditors, the company said it hoped to negotiate a restructuring of its debt with the creditors. The company owed creditors nearly $3.4 billion as of July 31.

"The company's remaining available cash will be reserved to maintain critical services for the group's operations, while the company will endeavor to negotiate a holistic debt restructuring solution," Genting Hong Kong said in a statement late Wednesday to the Hong Kong stock exchange.

The company did not say how much cash it still had on hand.

In its statement, the company said it had been trying to raise more money, but "there is currently a lack of certainty as to the outcome of the fundraising exercise."

Cruise lines have been hit hard financially in recent months as they have temporarily shut down operations due to the coronavirus pandemic.

Crystal recently canceled all sailings through early January 2021. The line hasn't operated cruise departures since March, nor has Genting Hong Kong's Star Cruises division. The company's Dream Cruises brand has recently resumed short sailings out of Taiwan with a single vessel, the 1,856-passenger Explorer Dream. The voyages only are open to Taiwanese travelers.

Four small cruise lines already have gone out of business due to the coronavirus shutdown.

Additional resources for cruisers during the coronavirus outbreak:

• When will cruising resume? A line-by-line guide
• Why you shouldn't expect bargain-basement cruise deals anytime soon
• How to cancel or postpone a cruise due to coronavirus
• Some of the year's hottest new ships could be delayed
• Stream these 13 movies, television shows to get your cruise ship fix