Cruise Value Center Fails, Now What?

December 3, 2008
When Cruise Value Center and Cruises of Distinction, two sister travel agencies, ceased operations in mid-November, thousands of customers discovered that cruises they thought they'd booked were not, in fact, accounted for. That's because the companies charged passengers for their cruises by directing funds to themselves rather than, as is proper in agency accounting, directly to the cruise lines. Cruise passengers from virtually all major lines, from Carnival to Princess and from Oceania to Silversea, have been affected.

For Cruise Critic readers who weren't customers of Cruise Value Center and Cruises of Distinction, the big lesson to take away from the companies' failures is to make sure when charging a cruise deposit or final payment that the money, as recorded on credit card statements, goes directly to the cruise lines. Another seriously important lesson is that one should always pay for cruises with credit cards -- not with cash, check or even credit card-affiliated debit cards. Credit card companies will refund your purchase if you're not provided with the service you've paid for. And for most of those who'd used credit cards to pay for cruises purchased through the two troubled travel agencies, this protection was a lifesaver.

Still, for the thousands affected, even the credit card protection doesn't render them immune to the stress and, in some cases extra expense, involved in completely re-booking trips they thought were confirmed. While cruise lines, along with CLIA, the industry's marketing arm, have been disturbingly unwilling to discuss policies related to those passengers affected, the rumor mill, as a result of the industry's vacuum of silence, is of course churning. Fortunately, Cruise Critic members have stepped up to the plate to share their experiences. Like this one: Member cas4girls tells us that Regent Seven Seas Cruises has, quite generously, "...allowed their clients that paid in full to the agency, but the agency never sent the money to the cruiseline, to have their cruise. All the passengers had to do was send proof of payment that they made to the agency (credit card statement, reciept from paypal charge or copy of check payment) and they are taking the loss and allowing clients to sail. Since company spokesman Andrew Poulton has declined to comment, we can't officially confirm this, however.

The cruise lines that have responded to our inquiries about how they're helping customers affected by the agencies failures are basically saying that each instance is being evaluated on a case-by-case basis.

Thanks to the generous sharing of information by readers who are in the process of rebooking cruises, as well as some helpful travel agents, we can tell you the following:

As we noted, the cruise lines say they are handling the situation on a case-by-case basis and no specific details about efforts to assist their customers have been forthcoming. In general, we've found that if you booked an inside or outside cabin through Cruise Value Center or Cruises of Distinction, in most cases you will get a similar rate when you switch over your booking to another agency or through the cruise line. Because cruise fares have fallen as the economy has weakened, travelers who booked their sailings far in advance might actually see lower prices now. The biggest potential problem is if your deposit never reached the cruise line at all and someone else booked your preferred cabin, of if you have made a final payment that was never passed on to the cruise line -- and your booking was canceled outright.

Some passengers who booked upper level (and pricier) accommodations have reported more difficulties in re-booking cruises at the fare they paid. Ann Komninos booked two of Princess' premium suites on June 1 through Cruise Value Center, and made a final payment of over $4,500 on October 28. CVC never turned over that payment to Princess. When Komninos found out about CVC's demise, she tried to rebook her cruise with Princess directly, only to find out the line wouldn't honor her original fare and wanted more money. Thankfully, her story has a happy ending that many others' do not -- Komninos called America's Vacation Center and an agent there was able to rebook her cruise at the original rate. Now she's waiting for American Express to credit her card with the amount she paid to CVC.

Many travelers are losing out on some of the rebates and freebies that were promised to them by Cruise Value Center and Cruises of Distinction. Here's why: Cruise lines don't allow agents to sell cruises at prices lower than the cruise lines' authorized rates. To cut corners and make the prices even cheaper than that, some agencies "rebate" -- which means they give part of the commission they are paid from the cruise line to the customer. The cruise lines discourage this practice, so they're not about to honor this type of price cut now. The two agencies, according to Cruise Critic members, also discounted prices via post-cruise rebates. In this case, CVC and Cruises of Distinction promised customers that, upon completion of their cruises, they'd get a refund for ancillary expenses such as fuel surcharges. Cruise lines don't cotton to that approach either, and so customers who were promised post-cruise rebates by the two agencies are out of luck there, too. A note: The types of travel perks offered by travel agencies to incentify passengers to book voyages that cruise lines do support include prepaid gratuities and onboard credit.

In some cases, passengers are finding that they'll have to pay significantly more to rebook their cruise. For example, Cruise Value Center allowed member GatorGal to make monthly payments on her upcoming 84-night world cruise, beginning January, in a Princess Grill suite on Queen Victoria. The trip, via CVC, cost her $78,495 and she made monthly payments $8,100, which were duly turned over to Cunard. Until the last one, that is. Her final installment never arrived. When she spoke with one of Cunard's agents about the situation, he told her that not only did she owe Cunard the $8,100 she already paid (but that went to CVC instead of Cunard), but that she actually owed an additional $8,000 because CVC had discounted the world cruise price by taking less commission on the sale (see dangers of agencies using unofficial rebates above). That's not an unfair move by Cunard. What does seem a bit harsh, GatorGal reports, was the line's insistence that she pony up that last $8,100 in a week's time -- or her booking would be canceled. GatorGal tried to get another travel agency to take over the booking, but time is too tight at this point. So GatorGal was forced to pay $16,000 and she's still waiting for her credit card to refund the original payment Cunard never received.

While stories of the plights of consumers who paid cruise fares with cash, check or debit card -- and so are entitled to no refund protection at all -- are thankfully rare, we 've heard from one person who is out a lot of money. David Hyman, a London resident who booked a Silversea cruise with Cruise Value Center, tells Cruise Critic that "we seem to have lost, in all, about $70,000, including airfares which we had to buy separately." Hyman paid the travel agency with a certified check; CVC never transferred the money to Silversea. Hyman's situation currently remains unresolved, but Silversea spokesman Brad Ball tells us that "we are proactively reaching out to all customers affected by the CVC situation ... all guests will be contacted shortly." Hyman, who like a fair amount of Brits booked overseas to get a cheaper fare than is generally available via U.K. agencies, paid a high price for the discount. Had he bought his cruise through an agency there he would have been protected by bonds that travel providers and agencies in the U.K. are required to carry. Once the customer pays for his cruise or holiday package, he is protected from losing money or being stranded abroad should problems arise with the provider or agent.

According to numerous postings on Cruise Critic's boards, most people who had booked cruises through the now defunct agencies have already contacted cruise lines to confirm bookings (in some cases, CVC and Cruises of Distinction actually did correctly charge deposits and final payments directly to cruise lines) or figure out next steps if their reservations don't exist. In most cases, these travelers are disputing their original credit card payments that went to the agencies and getting credit back on their accounts. If you haven't yet started the process, we recommend that you do so immediately. Contact the cruise line directly to confirm your booking and make sure you have your booking ID, trip dates and proof of payment to either of the agencies. If indeed the booking doesn't exist, negotiate with the cruise line directly -- or shop around via other travel agencies.

Ultimately, the demise of Cruise Value Center and Cruises of Distinction -- and the dearth of information from cruise lines and CLIA, its industry marketing arm -- have focused a spotlight on forums like Cruise Critic's community. Travelers have supported travelers in this case, offering support, encouragement, concrete information, and experiences in rectifying case-by-case situations.

We know that there are already many threads scattered throughout Cruise Critic's forum discussing the demise of Cruise Value Center and Cruises of Distinction but we'd like to start one more, centrally located thread for people to share the good or bad news about how their situation has been resolved. Please let your fellow travelers know how your cruise line or new travel agent resolved your cruise booking -- the more information we have, the better able all former CVC customers will be to negotiate happy endings to their own cruise booking nightmare.

--by Erica Silverstein, Associate Editor and Carolyn Spencer Brown, Editor in Chief

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