The Rise & Fall of Renaissance Cruises
Continuing our series of ‘The Rise & Fall of’ we are looking at Renaissance Cruises. Renaissance, also known as R Cruises is perhaps one of the most interesting cruise line failures despite the cruise lines 12 year lifespan.
Renaissance Cruises was founded in 1989 by Fearnley and Eger, a shipping company based in Oslo. Within a few years the line had added eight small 100 passenger cruise ships, heavily subsidised by the Italian Government to maintain employment at the shipyards. These ships were built at a cost of $20 million each, well below the $40 million market price.
The fleet was split into two similar designs, the first four built at Cantiere Navale Ferrari-Signani in La Spezia were 88.3 meters long, 4,077 GRT and carried 100 guests. The last four built at Nuovi Cantieri Apunia in Carrara, these carried 114 guests, were 90.6 meters long and slightly bigger at 4,200 GRT.
It has been speculated that Fearnley & Eger only ever built the fleet to charter them out, benefiting from the subsidies. However they ended up founding Renaissance Cruises headquartered in Fort Lauderdale, Florida. The fleet operated in competition with Cunard’s Sea Goddess ships (the current Sea Dream Yacht Club). Named Numerically Renaissance I to VIII they were marketed as affordable luxury cruises to destinations in the Mediterranean, Norther Europe, South Pacific and Caribbean.
The First Gulf War hit the cruise line and it’s parent company hard. Fearnley & Eger had an ambitious expansion plan across its shipping divisions which came to a shuddering halt. North American passengers avoid the cruises in Europe and Fearnley & Eger was wound down. Kloster took a look over the business and even placed a bid but this was rejected.
The cruise line was subsequently acquired by a consortium led by Cameli & Co an Italian conglomerate, for a bargain $13 million, plus assumption of debt. Adapting to the market the business places a stronger emphasis on the Caribbean.
By 1995 the company was operating profitably and in 1996 announced the order of two 690 passenger cruise ships from Chantiers de l’Atlantique.
In 1997 came the disposal of Renaissance I to IV, along with a s commitment to dispose of the smaller ships, continuing to build the larger ships. At the time this was said to be because passengers were demanding more on-board amenities, and the cruise line can benefit from more efficiencies.
1998 was the year of the first R Class ship. Imaginatively named R One. The order was soon supersized for eight identical cruise ships. Delivered between 1998 and February 2001, Chanter’s de l’Atlantique effectively being a production line of R Ships. This new fleet increasing the capacity substantially.
The cruise line angered travel agents by capping the commission they could receive. An effective boycott by travel agents began. However the company continued to push its direct sales policy.
In 2000 the line carried around 220,000 guests up from 33,000 in 1996. What can only be described as stunning growth for a line being boycotted by Travel Agents.
In April 2001 Malvern Marine, led by Ship Owner and investor Peter Gram, acquired a majority stake in Renaissance which led to the exit of Frank De Rio and Richard Kirby, the previous joint CEO’s. This infusion of fresh capital added $300 million to the companies coffers. This capital was much needed to support the companies significant growth on the back of the $1.5 billion ship building program.
The new ownership and leadership aimed to re-engage Travel agents and stop the heavy discounting that had been in place. It is believed the company lost $95 million on sales of $580 million.
However it was not to be, and following a significant deterioration in the travel industry following the September 11th attacks the cruise line halted all operations on 25th September.
Cancellations had been significant, with ships sailing half full. Passengers onboard on 25th September noticed changes in direction and the ships navigation channel being switched off.
Durant Imboden on Europe for Visitors recalls how she had found out from an email while on-board that the line was bankrupt, checking the website confirms this. She spoke to the ships social director who was unaware and went to see what they could find out.
The next morning they were advised that the ship was going to Dover where it would be arrested and held by the creditors.
In a relatively orderly collapse the ships were returned to port and passengers and crew arranged air travel back home, the contrasts significantly with other cruise line failures.
The company collapsed under $110 million in passenger claims, $75 million in supplier claims and $1.1 billion in debt owed on the ships.
The company quickly relinquished 8 out of the ten ships to a consortium of French Banks who had financed their construction. Two ships remained in Tahiti arrested over unpaid fuel bills. The ships were first all laid up in Gibraltar then moved to Marseille.
The company attempted to restart operations but by November this plan was dead and the fleet was sold to CruiseInvest. A purpose made finance vehicle CruiseInvest began a process of chartering and selling the fleet to a variety of cruise lines. The ships with significant balcony cabins have been popular with cruise lines. You can find a link to where they are now below.
Rivals Royal Caribbean, Celerity and Silversea offered discounts for those who’s cruises had been cancelled.
Frank Del Rio and Joe Watters founded Oceania Cruises in October 2002 chartering and subsequently acquiring R One and R Two and later R Five. It could be argued that the Renaissance Cruises story lives on through Oceania.
Royal Caribbeans acquisition of Pullmantur brought two former R Class ships into the group, which were used to start Azamara Cruises.
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Our other Rise & Fall Articles:
– The Rise & Fall of Premier Cruise Lines
– The Rise & Fall of Festival Cruises
– The Rise & Fall of Royal Viking Line
– The Rise & Fall of Regency Cruises
– The Rise & Fall of Royal Olympic Cruises
– ShipParade – What happened to the R Ships?
– Europe for Cruisers – Renaissance Cruises Bankruptcy