Cruise & Maritime Voyages (CMV) has entered administration after failing to secure additional funding. The cruise line has ceased trading with immediate effect, as has its international sales offices in Australia, France, the United States and Germany. CMV’s administration could be the first of many for the industry as months of travel restrictions has decimated the industry.
CMV entering administration highlights the financial strain that COVID-19 has created for cruise companies and reinforces the need for cruises to get back up and running as soon as it is safe to do so. If companies continue to haemorrhage money at their current rates it will be difficult to achieve survival.
Last month, Cruise & Maritime Voyages insisted it was confident in finalizing talks over additional financing following reports that a potential deal had collapsed. Sky News reported that the company was in emergency talks with lenders and potential investors after a deal with private equity firm Novalpina Capital and existing creditors was halted. However, despite this effort, no deal emerged, resulting in the company filing for administration.
All of CMV’s bookings that haven’t yet taken place are now cancelled. Many potential customers could look at the situation CMV now finds itself in and decide against booking cruises in the future. This could be devastating for an industry that is already struggling immensely.
FCO’s handling of the situation has not helped the British cruise industry
The FCO recently advised against all cruise ship travel. However, a week later it changed its stance by only advising against “sea-going” cruise ship travel. This change has led to high profile criticism over the FCO’s recent handling of the situation.
The FCO’s announcement came at a time when there are no major cruise lines planning to sail imminently in the UK. This begs the question as to why they would release the statement, as it can only have a negative influence on customers thinking of booking in the future – when travel advice could have completely changed from the current guidance.
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Secondly, the FCO’s latest announcement contradicting what was said only a week prior will create confusion for travellers and will be likely to prolong the recovery of many cruise companies with operations in the UK. Although, it is, of course, positive news for river cruises and cruise lines operating solely within the UK, weak, unclear communication will do little to alleviate the concerns of travellers.
These factors have made recent weeks incredibly challenging for the British cruise industry. Unfortunately, this could result in more companies falling into administration in the weeks and months ahead.