San Francisco-headquartered Hornblower Group has shut down its US river and expedition cruise arm, American Queen Voyages, putting the company under Chapter 11 bankruptcy protection ahead of the liquidation of its assets.
American Queen Voyages, which operates four river cruise ships and four expedition cruise vessels sent all its ships to the wall on Thursday, cancelling all future cruises.
The company also informed all staff and crew that their employment was terminated with immediate effect.
“We are saddened to share that American Queen Voyages has made the difficult decision to shut down. The overnight cruise industry was especially affected by the Covid-19 pandemic and related changes in travel preferences. Despite great efforts by our team, crew and partners, demand has not recovered and American Queen Voyages has become financially unsustainable,” the company said.
Market sources told TradeWinds that American Queen Voyages has been struggling financially for some time and stopped paying commissions to travel agents at the end of 2023. This led to several major travel wholesalers, who formed an important part of the company’s distribution network, ceasing to sell its cruises.
Hornblower said the decision to cut its losses by pulling the plug on American Queen Voyages came as part of an ownership transition process in which global alternative investment firm Strategic Value Partners and its affiliates will become its new majority owner.
Private equity company Crestview Partners, the company’s current owner, will retain a minority ownership position in the company which is also involved in ship and maritime infrastructure management, as well as tour boat and commuter ferry operations.
“To efficiently implement this agreement and ensure an orderly exit of American Queen Voyages, we have initiated a voluntary court-supervised Chapter 11 process in the US and ancillary proceedings in Canada,” Hornblower said.
American Queen Voyages, it added, “has not rebounded from the pandemic and is no longer financially sustainable. We will conduct an orderly sale or wind-down of the business”.
Hornblower stressed that it intends to pay its vendors, suppliers and other partners in full under normal terms for goods and services provided after the Chapter 11 filing.
American Queen Voyages customers have been promised full refunds.
Hornblower is now left trying to find buyers for the company’s six owned ships, while two 166-berth, polar-class expedition cruise ships chartered from Miami-based SunStone ships on a seasonal basis will likely be returned to their owner.
