Vantage Deluxe World Travel Files For Chapter 11

Embattled Vantage Deluxe World Travel Files for Chapter 11

By Anne Kalosh

Update Aug 21, 2023

Vantage Customers May Get Travel Credit With Aurora Expeditions

Update Aug 12, 2023

Here’s an update on the Vantage situation from our friends at Seatrade Cruise Review — “Court Expected to OK Aurora Expeditions’ Bid for Vantage Assets.”

Following a couple years of heavy losses and mounting consumer complaints, Vantage Deluxe World Travel filed for Chapter 11 bankruptcy protection with a proposed acquisition pending.

Founded in 1983, the Boston-based company for most of its history had a solid reputation for operating far-flung trips catering to seniors. Those included land adventures and river, ocean and expedition cruises on small owned or chartered vessels.

According to a court filing, Vantage at its pre-pandemic height offered 65 tours and more than 500 departures annually. The company started and led by Hank Lewis had served more than 500,000 travelers since its inception.

Liquidity Issues

Like every business during the pandemic shutdown, Vantage began having liquidity issues. As travel resumed, it continued to struggle.

The company reportedly lagged paying bills — a tour operator told me he became so concerned he had put Vantage on a pre-pay basis one-third of the way through the 2022 cruise season and into 2023 — and slow to give customer refunds.

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Consumer Complaints & a Lawsuit

The Massachusetts Attorney General’s Office reportedly amassed at least 818 complaints about Vantage since Jan. 1, 2020, including 181 or so filed this year.

In late June the Pennsylvania attorney general sued the company and Lewis, alleging they engaged in deceptive and unfair business practices by taking large sums of money from consumers then failing to give refunds when they could not travel.

According to the complaint, “In numerous instances, Vantage failed to fully and timely issue refunds to Pennsylvania consumers for their canceled travel tours by deeming those tours ‘postponed’ or ‘rescheduled’ rather than canceled. Consumers were forced to either rebook a new tour after years of delay or submit a cancellation request for a partial refund, which was subject to a per-person cancellation penalty fee of up to 100% of the purchase price.

“Many of these tours had a purchase price of up to $10,000 per person, or even more in some instances,” the complaint said.

The Pennsylvania attorney general alleged Vantage advertised and accepted payments from consumers for tour reservations that they knew or reasonably should have known could not be fulfilled on their purchased departure date.

Two New Expedition Ships

Pre-pandemic, with demand for travel booming, Vantage had ambitious growth plans.

This led to the company taking delivery of two newly built expedition ships, Ocean Explorer (2021) and Ocean Odyssey (2022), on year-round charter at a time when many people were still reluctant to travel. In late May, those vessels went into layup in Caen, France.

Facing tremendous challenges, Vantage had been looking for sources of financing or a buyer since at least 2021.

A Buyer & Chapter 11

On June 29, Vantage voluntarily filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Massachusetts. The company said it was seeking customary relief from the court pending an acquisition by United Travel Pte. Ltd., an affiliate of Nordic Hamburg and Heritage Expeditions, subject to any higher and better offers that may be submitted through a court-supervised sale process.

According to the filing, tour revenues tumbled from $132 million in 2019 to just over $10 million in 2020. At the same time, losses in 2020 alone exceeded $29 million. While revenue rebounded somewhat since then, it remained well below Vantage’s pre-pandemic levels, resulting in continuing losses despite attempts to downsize operations and cut costs.

Before downsizing, Vantage employed about 70 people stateside. All but five were terminated June 20.

The Potential Buyer

United Travel Pte. Ltd. is a Singapore-based tour operator.

Its affiliate, Heritage Expeditions, is a family-owned New Zealand company that operates the 140-passenger Heritage Adventurer and the 18-passenger Heritage Explorer, and Nordic Hamburg is a ship owning and ship management firm.

United Travel Pte. Ltd. is offering debtor-in-possession financing and $1 million for Vantage’s assets on the closing date of the proposed sale — by Aug. 11 — and will provide customers with future travel opportunities. An attorney for Vantage said the company’s customer list is its main asset.

United Travel Pte. Ltd. has agreed to provide a credit to customers who bought travel before May 11, 2023 if they book a tour from it, based on the amount each future customer has paid to Vantage that isn’t reimbursed by other means. The amount of the credit will be equal to the lesser of what the customer paid and 20 percent of the price of the trip purchased from Vantage, provided the credit doesn’t exceed 20 percent of the price of the trip bought from United Travel Pte. Ltd.

Starting on May 12, 2023, Vantage deposited all cash payments from customers for future travel (including cash remittances from credit card processors) in a segregated account, whose balance is $2.1 million.

These customer trust funds will be transferred to United Travel Pte. Ltd. at closing, when the company will determine which of the scheduled trips will operate. For any trip United Travel Pte. Ltd. elects not to operate on the scheduled timeframe, it will refund the customer trust funds within five business days of the closing.

Other Potential Buyers?

At the preliminary court hearing for the Chapter 11 case, two more potential buyers emerged, including a subsidiary of Australia’s Aurora Expeditions, which fields the expedition ships Greg Mortimer and Sylvia Earle. These are sisters of Ocean Explorer and Ocean Odyssey.

They’re on year-round charter to Aurora by SunStone Maritime Group, the same company that charters the two other ships to Vantage.

Debts & Creditors

According to the Chapter 11 filing, Vantage’s accounts payable debts total approximately $28.1 million and claims by existing customers arising from payments for future trips are estimated at $80.3 million. Claims for refunds total $32m, and $5.4 million for amounts due for insurance claims against Vantage’s self-funded trip insurance programs.

Major creditors include affiliates of SunStone Maritime Group, with claims for Ocean Odyssey ($3.6 million) and Ocean Explorer ($3.2 million), Basel-based Apollo River Management ($2.2 million), Cruise Management International ($1.8 million), Dan-Bunkering ($1.3 million) and CMI Leisure ($1 million).

Numerous other creditors have claims of under $1 million.