While 2024 has been a particularly bad year for airlines going bankrupt (Armenia's FlyArna, Canada Jetlines, Air Malta and Air Vanuatu all ceased operating in the last six months), there have also been a number of travel companies that were not able to stay operational.
FTI Group, a major European tour operator based out of Germany, filed for insolvency at the start of May amid poor bookings. Tourists who have already booked cruises and vacation packages to destinations such as Malta, Turkey and Morocco are still struggling to get refunds on pre-paid tours.
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A global cruise tour operator based out of California and Texas, the American Queen branch of Hornblower Corporation abruptly canceled all scheduled journeys back in February after multiple agents and travel companies started reporting “service issues” that made them reconsider whether to continue partnering with the company.
New CEO speaks: ‘Our ships are the perfect venue for that’
American Queen eventually ended up closing down completely while the larger Hornblower ended up being saved by a new majority partner; the investment firm Strategic Value Partners immediately replaced the chief executive with hotel industry veteran Mike Flaskey and began working on a turnaround plan that would help the company emerge from Chapter 11 bankruptcy.
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“We’re seeing more companies focused on team building activities, rewards, and recognition,” Flaskey told travel news outlet Skift in an interview. “Our ships are the perfect venue for that.”
Starting from the refunds and lost customers that took place when the world started shutting borders during the covid-19 pandemic in 2020, Hornblower amassed more than $1.2 billion in debt that it struggled to get out of even when similar types of boat tours resumed.
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This is how Hornblower hopes to emerge from Chapter 11 bankruptcy
The bankruptcy emergence plan approved by the U.S. Bankruptcy Court for the Southern District of Texas includes transferring fund management to Strategic Value Partners as the majority investor and moving ownership of Journey Beyond (a cruise brand operating primarily out of Australia) to Crestview. As part of the acquisition, SVP committed $121 million in new-money financing from SVP-managed funds and Crestview, and $720 million in total debt reduction.
The goal is to continue with Hornblower’s brand of offering small-boat cruises — one of the company’s most popular journeys was a series of overnight tours around Niagara Falls — as well as day journeys to destinations such as Alcatraz and the Statue of Liberty while putting it on the path toward profitability
“We couldn’t be more excited to embark on this next chapter with Hornblower Group, a premiere leader in travel experiences and transportation,” David Geenberg, who heads SVP’s North American Investment Team, said in a statement. “We are looking forward to collaborating with the leadership team to support the company's strong operating staff, excellent service, and exceptional guest experiences to usher in Hornblower's next era of growth and success.”
Flaskey also said that the company is “just scratching the surface” of what can be offered in terms of cruises and expects to serve as many as 20 million customers on various ferries, cruises, and tours throughout 2024 although whether Hornblower will run into past problems around clearing expenses with enough bookings remains to be seen in the coming months.
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