Monday, November 17 -- As reported last week, Cruise Value Center, a major online cruise travel agency, has stopped operating. We have also learned that Cruises of Distinction -- a sister agency owned by CVC parent company, Travel Entity Holdings -- based in Bloomfield Hills, Michigan, has ceased operation.
Cruise lines reportedly are working with passengers whose bookings are affected on a case by case basis.
The news that Cruise Value Center, a major cruise travel agency, apparently ceased business operations earlier this week is stirring up concerns from travelers and cruise industry executives. Cruise Value Center, a 14-year old, New Jersey-based agency, was a top Internet seller of cruise trips.
According to industry chronicler Cruise Week, it's possible that passengers who booked trips through Cruise Value Center and who made final payments may not actually be confirmed on those sailings. That's because, according to industry sources, some $2 - $3 million of cruise fares paid to Cruise Value Center may not have been passed along to cruise lines.
If you bought a cruise through Cruise Value Center, here's what you need to know:
Cruise Value Center customers who have made final payments should contact their cruise lines to confirm bookings.
Cruise Week notes that agency customers who bought and paid for travel insurance may also not be covered. Prime Travel Protection, the insurer whose policies were sold through Cruise Value Center, is working with Port St. Lucie-based Best Price Cruises to accommodate those customers. Ron Russo, chief operating officer of Best Price Cruises, tells us that in conjunction with the insurer the agency will help customers "to rewrite their travel protection and waive pre-existing conditions to the date of intended purchase of the cancelled policy." This applies only to travelers who purchased Prime's policy through Cruise Value Center.
Ultimately, Cruise Value Center customers who paid in full for their trips using a credit card, have protection from their card issuers, no matter what the outcome. More problematic is the situation for travelers who paid via PayPal, or with checks or cash; they may have no recourse at all.
While affected customers should call their cruise lines to sort out their individual situations, it seems that the cruise lines themselves are scrambling to adjust. Only Royal Caribbean at this point was willing to even discuss the issue on the record with us today. The line's Joanne Schimelman, vice president of national accounts, told us that "Royal Caribbean absolutely will be looking out for our customers' best interests and will do our best to make sure they have the vacation experience they planned."
Beyond the effect that Cruise Value Center's demise will have on its own customers, will this news have an impact on cruising in general? Perhaps not, says Johanna Jainchill, senior editor of Travel Weekly. "This is not related to the economy. It just seems like bad management."
"It is important, however, that travelers can learn from this," says Cruise Critic Community Manager Laura Sterling.
When buying cruises and cruise insurance, here are some suggestions on making sure your booking is secure:
"The number one tip is this: first of all, beyond anything customers should insist on getting actual cruise line's booking confirmation numbers rather than one provided by the travel agency," says Best Price Cruises' Russo. Possession of the cruise line's confirmation means, of course, that travelers can view their own bookings on cruise line Web sites, with the added benefit of pre-reserving, where available, shore excursions, restaurant reservations and spa appointments.
Pay your cruise fare -- both the deposit and the final fare -- with a major credit card such as Mastercard, Visa or American Express. Under the Fair Credit Billing Act, you are entitled to protection (via a chargeback of disputed fees to your account) if a merchant fails. This protection may not apply to those using debit cards (also known as check cards); it's important to confirm policies with your issuing bank before you charge.
When you do pay for a cruise on your credit card, Russo advises that customers review their statements and make sure that the actual charge is made by the cruise line, rather than the travel agency. That way you'll know that the cruise line has received your money.
Cruise Critic has long advised travelers to purchase travel insurance policies directly from respected insurers rather than through cruise lines (the latter's policies do not cover customers from financial insolvency should the cruise company shut down). But in case of travel agency insolvency, it's a bit more complicated. Major insurers most likely will not cover travel agencies in this case. Access America's Mark Cipolletti tells us that its policies provide financial insolvency protection with regard to tour operators, cruise lines, airlines and hotel companies that are featured on its "
covered supplier list." Travel agencies are not included.
When you purchase a travel insurance policy, whether through your travel agency or directly via the insurer, Russo notes that you should promptly receive a copy of your policy. "Ask when you will receive your policy and make sure to get a contact number for the insurer."
If there is any positive news to come out of the Cruise Value Center failure, it's that, according to several cruise and agency sources, the much-publicized slowdown in cruise bookings, at least through the winter, means there's plenty of space on ships. Cruise lines should be able to accommodate affected passengers whose trips were cancelled as a result of Cruise Value Center's demise.
--by Carolyn Spencer Brown, Editor in Chief
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Update: Cruise Value Center Sister Agency Ceases Operations
November 17, 2008