Silversea drops FCC down to 110% on cruises they cancel

[etual324]

1 hour ago, AtMaui said:

My 2 cruises on the Whisper in November were cancelled.  According to the email I received "A Future Cruise Credit valued at 110% of the total booking amount to be used to reserve a cruise....for all open sailings."  I'm taking the "15% savings on any new cruise date when booking before 9/30/21" since I know which cruise I want.

 

I'm disappointed but not surprised.

 

----------------

 

Quoting from email dated 9/17/2020 from Barbara Muckerman:  "15% savings on any new cruise date, when booking before 30 September 2020."

You are saying you must book by 30 September 2020 that's 12 days from today the rest of 2022 is not out yet 

[etual324]

21 hours ago, etual324 said:

 

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Edited September 18, 2020 by etual324
plz delete wrong info

[clo]

2 hours ago, alexandria said:

In the event Silversea becomes insolvent, holders of FCC become unsecured creditors and likely would receive nothing. 

That's what I keep coming back to. Not just cruise lines. It took me six months to get multiple refunds from Norwegian Air - they're in BAD shape.

[cruiseej]

6 hours ago, alexandria said:

In the event Silversea becomes insolvent, holders of FCC become unsecured creditors and likely would receive nothing.  No refund, no cash back, no cruise.

 

Well, that's not necessarily a given, right? If another cruise company acquires one that files for bankruptcy, they might honor existing bookings because those customers represent much of the value of the company they're acquiring. Other creditors, like suppliers, might take losses while passengers are fully or mostly kept whole. We don't know. Hopefully we'll never find out, but it'll such a day comes, it's a guessing game rather than a certainty what would happen with customer deposits. 

[UKCruiseJeff]

47 minutes ago, cruiseej said:

 

Well, that's not necessarily a given, right? If another cruise company acquires one that files for bankruptcy, they might honor existing bookings because those customers represent much of the value of the company they're acquiring. Other creditors, like suppliers, might take losses while passengers are fully or mostly kept whole. We don't know. Hopefully we'll never find out, but it'll such a day comes, it's a guessing game rather than a certainty what would happen with customer deposits. 

 

I'm struggling following you here and I'm not clear that it is much of a guessing game but more one of common sense.  I think we need to be realistic.

 

Your optimism depends on the acquiring cruise line  - unlike all the others at the moment -  being in such a wonderfully financially healthy and robust  condition that they can not only support their own obligations and underwrite their own future, but needlessly take on wholly  avoidable set of unsecured creditors which were the most likely cause of the implosion in the first place for what you think is goodwill.  So I think you are suggesting that an acquiring cruise line might give all the customers of the imploded cruiseline refunds or FCC because they think that would give them more than it costs in preference to paying their suppliers -  instead of paying none of them.  I can't see that myself.

 

I also don't understand why you think that the acquiring company would choose to lose the goodwill of their essential supporting operating suppliers who support them day in and day out - and those of their purchased cruise line, who may also be their own suppliers. in preference to the rather transient relationships.  Do you think for example that a cruise line who abandons their suppliers in refusing to pay their fuel bill will receive any fuel in the future on credit from that company?

 

Also many customers should have insurance or credit card protection.  So they would effectively be paying the insurance companies or banks claims for them.  

 

Many of us perhaps haven't noticed that customer loyalty was genuine and had a greater value in the past than now and we all know that as time moves on loyalty is illusory and companies are much more interested in the next buck than bucks they once had.

 

To be honest I think your hopes of this level of generosity might be a bit optimisitc.

 

Best wishes all in these demanding times.

 

Jeff

Edited September 18, 2020 by UKCruiseJeff

[cruiseej]

Jeff, I appreciate your thoughts. To be clear, I wasn't saying I was hoping that's how it would play out, but that there's a range of possibilities if on elf the cruise lines decides to throw in the towel in some way. They could go of business and sell their ships for salvage value. They could go through bankruptcy -- whatever that looks like in the countries these multi-national companies operate in -- wipe their debts and obligations, and resume or sell by losing all their customers, or they could sell to another company who tries to preserve the customer base and keep the operation as a going concern. Or any shades in between. I was only saying we can't really know how this will play out if things go from bad to worse. 

 

27 minutes ago, UKCruiseJeff said:

Also many customers should have insurance or credit card protection.

 

Those protections may not apply to the many customers who have taken future cruise credits. Another future unknown. 😉

[clo]

1 hour ago, cruiseej said:

 

Well, that's not necessarily a given, right? If another cruise company acquires one that files for bankruptcy, they might honor existing bookings because those customers represent much of the value of the company they're acquiring. Other creditors, like suppliers, might take losses while passengers are fully or mostly kept whole. We don't know. Hopefully we'll never find out, but it'll such a day comes, it's a guessing game rather than a certainty what would happen with customer deposits. 

I'm not a lawyer so take this with a grain of salt. Not too many years ago we had a car made by GM. It had a major transmission problem. Ours went out when going 65 on I-80 in the left lane. But between when we bought it and when this happened (allegedy still under warranty) GM had filed (is it) Chapter 11 (that's reorganization). They came out of bankruptcy and didn't honor the warranty under the 'former' company.

 

We're starting to consider canceling our Galapagos cruise and getting our $1k back. They're sure not impressing us. It would be our first SS cruise.

[FlyingScotSailors]

7 minutes ago, clo said:

 Ours went out when going 65 on I-80 in the left lane.

 

Unless it was a 50 zone, you should not be driving slowly in the left lane! 🙄

 

10 minutes ago, clo said:

We're starting to consider canceling our Galapagos cruise and getting our $1k back. They're sure not impressing us. It would be our first SS cruise.

 

Not that we want to influence your decision, but unlike most on this board, we will never cruise with Silversea again.  They left us to basically fend for ourselves during the pandemic in March, since they had gotten us off the ship in South Africa, after telling us that they had more important guests to take care of.

 

Our Galapagos cruise on the Silver Galapagos last December was very nice.

 

 

[clo]

2 minutes ago, FlyingScotSailors said:

Unless it was a 50 zone, you should not be driving slowly in the left lane! 🙄

 

LOL. It sure got OUR attention.

 

And thank you for that experience. I read this to Bob and we've basically decided to revisit this in the AM and if we feel/think the same we're canceling. It's just a vacation. We have more important things in our lives.

[cruiseej]

13 hours ago, clo said:

They came out of bankruptcy and didn't honor the warranty under the 'former' company.

 

Well, there are lots of variables involved, more than any of us can predict. One is whether the line would file bankruptcy and void all its existing reservations, and then be bought by another cruise line. So the acquiring company would basically be buying the floating metal, with no liabilities, but also no customers and negative goodwill. I think that's a somewhat unlikely scenario; there is an excess of cruise ships, so who will be looking to buy a bunch more? But perhaps a smaller luxury cruise line would be sold to another company, largely intact. That's happened before with hotel chains, and customers haven't lost out in the transition. If the cruise line is out of money and can't deal with its debts, then that won't happen. But if one of the large cruise holding companies decides it wants to downsize its operations, it's possible to sell off a division -- to a rival, to a group of management with new investors -- without bankruptcy and losing its customer base and goodwill. I'm in no way predicting I think that will happen; I'm only saying it's among the possibilities in our future.

[Observer]

I really think that this talk of bankruptcy is wildly premature.  If SS were still an independent family-owned company, it might be likely.  But I think it is highly unlikely with the financial heft of RCL behind it.  Wouldn't the entire RCL enterprise have to go bankrupt with it?  In any case, it is difficult to think of a major US airline that has not declared bankruptcy in recent memory.  In nearly all cases, AFAIK, they have continued flying.  Frequent flyer miles continued to be honored.  etc.  They simply "reorganized."

 

 

[UKCruiseJeff]

The discussion about the possibility is in this forum solely in the context of understanding  where it is safe  to leave large amounts of personal cash when there are options not to do so. It seems to me to be sensible to understand and either dismiss or be concerned about the topic as one wishes. 

[alexandria]

29 minutes ago, Observer said:

I really think that this talk of bankruptcy is wildly premature.  If SS were still an independent family-owned company, it might be likely.  But I think it is highly unlikely with the financial heft of RCL behind it.  Wouldn't the entire RCL enterprise have to go bankrupt with it?  In any case, it is difficult to think of a major US airline that has not declared bankruptcy in recent memory.  In nearly all cases, AFAIK, they have continued flying.  Frequent flyer miles continued to be honored.  etc.  They simply "reorganized."

 

 

 

It is a matter of understanding potential risk and then making a personal decision about whether you are willing to accept that risk.  And unlike losing $100 on a retailer gift card if that retailer files for bankruptcy, the amount of money at risk for Silversea passengers who accept FCC in lieu of a refund is substantial, often involving tens of thousands of dollars per cruise.

 

Concerning US law, even in a Chapter 11 reorganization, whether customers would be able to use FCC, is dependent upon the cruise line first deciding that it wishes to honor those, then petitioning the bankruptcy court to do so, and finally the approval of the bankruptcy court, before that can happen.  If that were to occur, it could take many months, during which time the FCC cannot be used. 

 

Barbara Muckermann said that providing the 15% FCC that has been wrongfully denied to passengers booking between April 8 and July 20 would be "unsustainable".  And if Silversea can't afford the financial hit involved in providing that modest 15% FCC (which would likely translate only into a better stateroom or perhaps a slightly longer cruise) and if sailing doesn't resume soon with passenger loads sufficient to at least "break even", how can Silversea afford to cover all of its ongoing expenses as well as its existing liabilities? 

 

I can't assess the likelihood of insolvency for Silversea or RCCL, nor the risk that FCC would have zero value in such an event.  I do know that the amount of money each passenger has "at risk" would be considered very significant even for those of us blessed to be able to afford luxury travel.  Whether the "reward" of the offered 10% FCC is sufficient compensation for the assumption of such risk is a decision for each individual passenger.

[alexandria]

The other consideration I neglected to mention is that by accepting FCC rather than a cash refund, the passenger is LOCKED IN to cruising with Silversea.  The only other option is forfeiture of the funds spent on the initial, now canceled, cruise.  A cash refund is no longer available for that canceled cruise.

 

So what happens if in January, Silversea announces a "resumption of sailing" but also puts into place COVID safety measures which would result in a personal decision that the cruise experience would no longer be very enjoyable.  Think masks everywhere except in stateroom.  No spa services.  Fitness center closed.  No ability to leave the ship unless on a Silversea excursion.  We just don't know because after more than six months of the cruising COVID shutdown, Silversea hasn't announced even tentative plans.  They didn't even convene safety experts to begin assessing how they would resume safer sailing until July, four full months after ceasing operations.

 

Even if the COVID precautions are not onerous, who is to say that Silversea doesn't implement significant cost-cutting measures.  Some may not even be noticed until you are already on board.  Perhaps subtle changes to the menu, such as NY strip steak instead of filet or ribeye.  Farm raised salmon instead of wild caught trout.  Vegetable lasagna instead of meat lasagna.  A reduced selection of beverages primarily less costly brands.  Fewer butlers with more suites to serve so service is not as attentive and personal.  Fewer servers in the dining venues.  If the spa is open, higher prices.  Excursions...higher prices.  Fitness classes...higher prices.  Those are all things that might be implemented behind the scenes.  How will a passenger feel if they have a cruise booked for late 2021 or early 2022 and read unfavorable reviews from passengers on resumed cruises, see what is on the "new" menus and such?  If you booked with FCC, sorry, you cruise or your money is wasted.  If you booked with cash, you can always cancel and get all or most of your money refunded depending how far out you are from the sailing.

 

And since Silversea apparently has no problem refusing to honor the promises they have made in writing and shrugging off the resulting loss of some of their customers, do you think they will hesitate to make cost-cutting decisions as to matters that they haven't promised in writing?

[zqtchas]

Re: credit card. Isn’t there a time limit for filing/disputing a money back situation?

like having paid in full for a cruise a year or more in advance ?

[alexandria]

4 minutes ago, zqtchas said:

Re: credit card. Isn’t there a time limit for filing/disputing a money back situation?

like having paid in full for a cruise a year or more in advance ?

 

Speaking only as to US cardholders, both Mastercard and VISA have little known extended protections for the purchase of services that are not expected to be performed until a date in the future.  Those policies provide that a dispute timeline can be based on one of two start dates. Either the dispute must be initiated within 120 calendar days of the transaction processing date OR within 120 calendar days of the last date the customer expected to receive the goods or services (but not to exceed 540 days of the original transaction processing date).  

 

(Mastercard Chargeback Guide, beginning at page 49:  https://www.mastercard.us/content/dam/mccom/en-us/documents/rules/chargeback-guide.pdf)

 

(Visa Chargeback Guide, beginning at page 687:  https://usa.visa.com/dam/VCOM/download/about-visa/visa-rules-public.pdf)

I do not know if AMEX and Discover provide similar protections.

 

However, that protection NO LONGER APPLIES once a passenger accepts future cruise credit in lieu of a refund.

[zqtchas]

50 minutes ago, alexandria said:

 

Speaking only as to US cardholders, both Mastercard and VISA have little known extended protections for the purchase of services that are not expected to be performed until a date in the future.  Those policies provide that a dispute timeline can be based on one of two start dates. Either the dispute must be initiated within 120 calendar days of the transaction processing date OR within 120 calendar days of the last date the customer expected to receive the goods or services (but not to exceed 540 days of the original transaction processing date).  

 

(Mastercard Chargeback Guide, beginning at page 49:  https://www.mastercard.us/content/dam/mccom/en-us/documents/rules/chargeback-guide.pdf)

 

(Visa Chargeback Guide, beginning at page 687:  https://usa.visa.com/dam/VCOM/download/about-visa/visa-rules-public.pdf)

I do not know if AMEX and Discover provide similar protections.

 

However, that protection NO LONGER APPLIES once a passenger accepts future cruise credit in lieu of a refund.

Thanks. However mine are with AX. It’s probably similar though.  

[zqtchas]

Just got the news from TA. 11/8 Moon cancelled, offered usual updated options.

Now what to do?

[alexandria]

I'd suggest before you make any decision you read the recommendations of the RCCL (Silversea) Healthy Sail Panel.  You can see a copy of their report and some comments from myself and others in TLCOhio's SS Future Re-Opening thread beginning here: 

 

[Silver Spectre]

1 hour ago, zqtchas said:

Just got the news from TA. 11/8 Moon cancelled, offered usual updated options.

Now what to do?

Rather sad. We are still waiting for Barbara’s email but are going down the refund route.