The chairman and CEO of Genting Hong resigned on January 21, 2022, a clear sign that the once-thriving cruise company is slowly but surely unraveling. Tan Sri Lim Kok Thay founded the company in 1993 and gradually built it out to be the most significant cruise operation in Asia.
However, after failing to pay debts, an arrest issued by a U.S. judge for one of the Crystal Cruises ships, reservations that have been put on hold, and stocks that have been halted from trading in Hong Kong, the end of the story seems near for the company that owns Dream Cruises, Star Cruises, and Crystal Cruises.
Tan Sri Lim Kok Thay Resigns
The man who founded Genting Hong Kong in 1993 has stepped back from the company he ran for almost 30 years. Tan Sri Lim Kok Thay, a Malaysian billionaire, stepped down with immediate effect last Friday, January 21, as announced by Genting. Lim still owns 76% of the Genting Hong Kong stocks. The deputy CEO and group president Au Fook Yew also tendered his position with the CEO.
While many expected cruise lines to suffer from the pandemic and a global pause in operations, it seemed as if many, if not most, lines managed to come out relatively unscathed.
However, Genting Hong Kong, which made considerable investments in its fleet of three cruise lines in recent years, is now heading for liquidation—making it a perfect example of how the pandemic destroys even the most prominent companies.
The Genting group of companies in Singapore, Hong Kong, and Malaysia all operate separately, so the problems in Hong Kong will likely not affect the other businesses, despite that Lim has a majority stake in all.
Asia’s Tourism Sector in Trouble
The problems for Genting Hong Kong come as the Asian tourism industry is cautious about restarting operations. China is pursuing a zero COVID strategy, Hong Kong is battling Omicron outbreaks by banning cruise ships from operating, and Singapore only allows cruises for locals. Several other countries in the region, such as the Philippines, are still locked down entirely for tourism, while others only allow in tourists with heavy entry requirements placed on them.
For the largest cruise operator in Asia, this has caused severe issues. Although Dream Cruises did operate three ships in Hong Kong, Singapore, and Taiwan, and Crystal Cruises has been operational for several months now, Genting still reported a 1.7 billion dollar loss in May last year.
With stocks plunging, and the German authorities denying debt insurance protection for payments due at the Genting-owned MV Werften (which filed for insolvency earlier this month), the company has no further funding options.
What Is Happening to the Three Genting Cruise Lines?
A U.S. court has ordered the arrest of Crystal Symphony for missing fuel payments to Peninsula Petroleum Far East Pte Ltd., making it divert course from its intended port call in Miami, sailing to Bimini instead. On Sunday, some passengers were taken by ferry to Port Everglades in Fort Lauderdale; others were left to rebook their own travel arrangements.
Both Dream Cruises and Star Cruises have stopped taking bookings on their website last Saturday, January 22. According to Dream Cruises, this is only for an initial period of two weeks, with sailings due to resume on February 4. However, at the same time, Crystal Cruises has decided to return all crew home and lay up the three operational vessels until April.
Crystal Cruises President Jack Anderson said, “From the bottom of my heart, thank you for your tireless dedication and devotion to Crystal and your understanding in this very difficult situation. You are the heart and soul of the Crystal Family. We look forward to returning to the world’s oceans and rivers later this year”
Slowly but surely, the largest cruise company in Asia, which pioneered the cruise industry in the region almost 30 years ago, is falling apart. The departure of Au Fook Yew and Tan Sri Lim Kok Thay seems to be another nail in the coffin and a step closer to a company heading for liquidation.
Many big players in the cruise industry will be watching with added interest, as the region is still seen as the most significant growth market in the world, and is one that Carnival Corporation and Royal Caribbean have wanted to include in their business models for years.