Sunday, September 26, 2010

Cruise West Owner, "Heartbroken" For Screwing You Over

Last weekend I happened to read a letter posted on the Avid Cruiser blog from Dick West, owner of the now-defunct Cruise West. In it, West said, "After 64 years our family business has succumbed to the global economy. We are heartbroken that we are going to be disappointing so many wonderful travel partners and guests, many of whom have become part of our extended family over the years. We did everything we could—put everything we had into the business to make it through the Alaska season, but we have reached the end of the road. Things are now out of our hands."

West went on to describe a deal he'd been working that fell through and, as a result, he mortgaged his home to the hilt and lost it. That is too bad, but the Cruise West saga almost mirrors a chapter from the demise of the former-Renaissance Cruises—the chapter that could be entitled "Too much, too soon."

While reading West's letter I couldn't help but wonder if this is the beginning of an apology tour. No crystal ball was necessary, as West has now reached out to the editors of Travel Weekly and Travel Pulse. In calls to them he outlined the steps that were taken to keep Cruise West afloat, including efforts to reach the deal with a private equity firm, drawing the equity out of his home, and working with the line's bank credit card processor. As we know, it was all to no avail. West blames the beginning of the end of Cruise West on the market crash in October 2008 (it's George Bush's fault!). That's when he said the phones stopped ringing and bookings dried up. Then the cancellations began and Wave Season 2009 was a dud. While Cruise West laid off some office staff in late-2008 and removed two ships from Alaska service, that only postponed the inevitable.

Things didn't get better. As a result of their credit card exposure, the bank forced the sale of the Spirit of Oceanus for what West said was, "well below market price, at a distressed price, probably half the price." He also revealed, "Somebody bought the note for the Spirit of 98, the Spirit of Endeavour, and the Spirit of Discovery at a significant discount. We didn't get anything; it went to the bank. They got them for a song. It's heartbreaking. They got such a deal." Could that be bitterness we detect? Kind of like the small child who's terribly sorry for getting caught doing something wrong; not because he did it, but because he got caught.

Are you noticing a trend? It's the fault of the market, the bank, the people who bought the ships, and even guests who either didn't book cruises or cancelled their reservations. West wants consumers to know he's sorry, so terribly sorry, and he's lost a lot. However, there are other losers in this matter as well. West admits that tour operators have gone unpaid for services as far back as 2009 (he was required to pay up front for 2010 tours); fuel suppliers have not been paid; outstanding travel agent commission payments won't be made; and passengers are pretty much out of luck if they paid cash for future cruises. For others, there is some recourse, but not all of them can count on being made whole. (For claims information, see Cruise Diva's Sept 17 blog entry.)

As the co-owner of a small family business, I feel some empathy for the West family. However, no matter how many times West himself says he's heartbroken, that doesn't change the fact that the situation is his responsibility. He told Travel Weekly that his sisters bailed out of Cruise West after their father, the company's founder, passed away in 2005. Since that time, West admits, "I had voting control of the company and was the only one involved in the business. I had been running it since the 90s. I was the one that took it from a small company to the company it was." So much for the company's 'small is better' motto.

Somewhere along the line decisions were made to acquire more ships, to expand the fleet's itineraries beyond tried-and-true regions, and to sail an ambitious world cruise (ironically, on a former-Renaissance Cruises ship). And, most importantly, the decisions were made to do those things with other people's money. West was accepting payments from currently booked passengers to pay for past mistakes, even offering discounts for cruises paid for in cash while the company was sinking in red ink. The mistakes and bad decisions finally caught up with him.

The only people we feel sorry for are the ones who were cruelly deprived of their hard-earned money. I guess that's okay in West's mind, though, because he's treating them "as extended family." We're just glad he's not our relative.

2 comments:

Anonymous said...

This is the first artical that I have read that got it right!!! I was an employee for 3 yrs till the end. The crews on the ships were great and we all did our best to make each cruise a great experience for the guests. Unfortunately Dick W. decided to do that damn world cruise. It sucked any money that could have keept CruiseWest operating. The logistics alone were mind boggeling. I would say to Dick, lay off the bottle buddy. You not only destroyed your daddys company with your piss poor decisions but the lively hood of all the great people you had working for you. It was amazing how when we had no bookings (according to you) my particular ship was 70-100% full the whole season. Even with "discounts" we know we were a profitable boat in 08,09,2010. And I know we were not the only boat that made money. Your round the world fantasy with "Mr.Ditmar" and the Spirit of Oceanus was the hair that broke the camels back. When we heard in 09 that Cruisewest was sending the Oceanus on that world adventure we all said that its gonna kill the company.

Anonymous said...

Imagine my increduality to receive an email from Explor Cruises Dick West's new cruise business set up barely a year after Cruise West went under taking with it over 20,000 dollars of my money that I have not got back because we were booked on a cruise to the Galapagos and therefore left from a non refundable non USA port. Nowhere in the brochure was this mentioned I might add. From where did the money for this new venture come as he is supposedly bankrupt?