Crystal Cruises was sold this week from Tokyo-based shipping giant NYK to Genting Hong Kong Limited for USD550 million. This is no ordinary sale, but rather one with numerous implications for the luxury end of the business.
The sale is in cash, subject to certain adjustment items to be ascertained after the closing. Genting is getting the entire company and, as is normal in such transactions, the new owners said they are keeping the current management team.
So after more than a quarter of a century, Crystal moves from a shipping giant with apparently no other ties or aspirations to the North American cruise market, to a multibillion dollar company with deep interests in tourism-related business.
Crystal was formed in June 1988, and for the past 27 years has operated as a company with one ownership that has been very loyal to the brand. NYK was a multibillion dollar shipping company when it started Crystal Cruises and has grown even larger since. Crystal was a very small part of its operation, almost viewed more of a point of pride by its owners rather than a serious way of growing their business.
As such, NYK Lines has always been insistent that the most important thing for Crystal was the artistic success of the company. They've never wavered on that, and it’s one reason why it has continued to invest in the maintenance and development of the line’s 2 ships so that they are remarkably current given their age.
New owner Genting is part of a company that owns Asian cruise giant Star Cruises and is also a major shareholder in the ever-expanding Norwegian Cruise Line Holdings. The company, which is perhaps best known for its extensive casino operations in Asia, also has numerous other business interests, ranging from worldwide resorts to agriculture.
There are some complications - as Robin Farley of UBS pointed out - Genting now owns both a stake in one of NCLH's largest brands, Regent, as well as one of Regent's direct competitors, Crystal.
But in general the move is seen as giving Genting a clean foothold in the North American market, rather than an indirect one, and one uncomplicated by a relationship with Prestige Cruise Holdings, which is also heavily involved in NCLH.
As part of the announcement, Crystal once again announced it would be expanding its fleet, but consistent with earlier announcements, there were no specifics in terms of where and when. Last year, Crystal President & COO Edie Rodriguez said the company planned to expand to 7 ships. The sale announcement, however, said only 1 new ship was in the works.
“Seven is still my vision,” Rodriguez subsequently told Cruise Week. “One ship at a time.”