Villa Vie Odyssey: The Cruise Ship Dream Doomed From the Start — Transcript

Full transcript

1. 0:00Back in November 2024,
2. 0:02we published an article in Saloway
3. 0:04magazine questioning whether Villa Vie
4. 0:06Residences was capable of delivering
5. 0:09what it was promising. I described the
6. 0:11whole operation as a slow-motion
7. 0:13shipwreck and questioned how long the
8. 0:15company could survive. Almost 2 years
9. 0:18later, Odyssey is laid up in Cambodia,
10. 0:21residents have been ordered to leave,
11. 0:23and the company is desperately trying to
12. 0:25secure new financing. Imagine spending
13. 0:28$200,000 on a cabin aboard a cruise ship
14. 0:31only to wake up one morning and be told
15. 0:33that you've got a few hours to pack up
16. 0:35all your belongings and get off because
17. 0:37the cruise line can't afford the fuel to
18. 0:40continue sailing. But worse than that,
19. 0:42imagine being dumped in Cambodia and
20. 0:44nobody can tell you when you can go back
21. 0:47to your home and what is happening to
22. 0:49your investment. And that is the
23. 0:50situation facing residents aboard Villa
24. 0:53Vie Odyssey. And the man who founded it
25. 0:56was previously involved in another
26. 0:58residential cruising adventure that
27. 1:00collapsed before its inaugural voyage.
28. 1:02It's a Netflix documentary in the
29. 1:04making. On Monday the 26th of October,
30. 1:06residents aboard Villa Vie Odyssey, a
31. 1:08former Fred Olsen cruise ship Braemar,
32. 1:10the first cruise ship I ever sailed on,
33. 1:12were informed that the company had been
34. 1:14unable to secure fuel necessary to
35. 1:16continue operating, which is a very
36. 1:19long-winded way of saying we've run out
37. 1:20of money. The ship, which was docked in
38. 1:22Sihanoukville, Cambodia, would enter a
39. 1:24warm lay-up with crew remaining on board
40. 1:27to maintain essential systems. Everyone
41. 1:29on board was instructed to disembark by
42. 1:312:00 that afternoon. Those unable to
43. 1:34collect all their belongings were told
44. 1:36they could arrange to return the
45. 1:37following day. Now, these aren't
46. 1:39holidaymakers who have had their cruise
47. 1:42cut short. For some residents, Odyssey
48. 1:44is their only home. There are plenty of
49. 1:47people on board that had to sell off
50. 1:50their houses, various other assets like
51. 1:53cars, reorganize their finances, and
52. 1:56committed themselves to spending years
53. 1:58traveling around the world. They bought
54. 2:00the product that was sold to them, and
55. 2:03now it's looking like they bought
56. 2:04something that was impossible. Villa Vie
57. 2:07says it's helping residents identify
58. 2:09temporary accommodation, although it's
59. 2:11unclear exactly what assistance is being
60. 2:13provided or who is paying for it. One of
61. 2:16the most revealing accounts comes from
62. 2:18Lynette and Johan, who run the YouTube
63. 2:21channel Living Life on a Cruise. We've
64. 2:22been following these guys for a while.
65. 2:24They purchased a cabin aboard Odyssey,
66. 2:26and they have been documenting their
67. 2:28experiences. Their latest video follows
68. 2:30them as they return to the ship after
69. 2:33several weeks traveling independently.
70. 2:35They describe meetings where residents
71. 2:37were being told about financial
72. 2:38difficulties, followed by suggestions
73. 2:41that investors might be interested in
74. 2:44rescuing the operation. Then, a few days
75. 2:46later, those hopes would disappear when
76. 2:48another possible solution apparently
77. 2:51fell through. How emotionally exhausting
78. 2:54must that be for passengers? Imagine
79. 2:56spending a substantial portion of your
80. 2:58savings, for some all of their savings,
81. 3:01on a residential cruise ship, only to
82. 3:03find yourself attending regular meetings
83. 3:06about whether the company can afford to
84. 3:08keep operating. Johan also speaks about
85. 3:10people who have invested their entire
86. 3:13life savings, including retirees relying
87. 3:16on pensions and others who have only
88. 3:19recently joined the vessel. He also says
89. 3:21that there are many people who have
90. 3:23purchased cabins, given their money to
91. 3:26Villa Vie, and they haven't even stepped
92. 3:28on board. What's happening with their
93. 3:30money? Villa Vie says its financial
94. 3:32difficulties have been caused by
95. 3:33extraordinary increases in fuel costs,
96. 3:36particularly during the ship's time
97. 3:38operating in Asia. Why on earth didn't
98. 3:40you hedge your fuel? It's very easy just
99. 3:42to blame somebody else. Cruise companies
100. 3:45can hedge their fuel costs, effectively
101. 3:47protecting themselves against some of
102. 3:49the increases in the market. It's a
103. 3:51perfectly normal financial risk
104. 3:53management tool in the shipping
105. 3:55industry. Royal Caribbean hedged 60% of
106. 3:58their fuel. Fred Olsen and Ambassador
107. 4:00hedged all of theirs, but Carnival hedge
108. 4:02nothing, which I've always found really
109. 4:06strange. According to the company, it
110. 4:08was spending around $1,800 per cabin
111. 4:10every month on fuel. However, as the
112. 4:13year progressed, that figure has reached
113. 4:15$6,000 to $8,000 every month as
114. 4:18geopolitics, including the wars in Iran
115. 4:20and Ukraine, have increased global fuel
116. 4:23prices. But, when Villa Vie are
117. 4:25promising residents 15 years of
118. 4:27cruising, surely your business plan has
119. 4:30to account for fuel prices going up from
120. 4:32time to time. And if you can't afford to
121. 4:34hedge, you need sufficient financial
122. 4:36reserves to absorb those increases. Why
123. 4:39set up a business if you can't put those
124. 4:41sort of measures in place? Michael
125. 4:42Peterson, Villa Vie's founder and
126. 4:44executive chairman, says they've tried
127. 4:46slowing the ship down and spending
128. 4:49longer periods in port,
129. 4:51but those measures haven't done very
130. 4:53much. God, how desperate are they?
131. 4:56According to Cruise Industry News, they
132. 4:58got to review a letter sent to residents
133. 5:01in April, where Villa Vie was seeking $3
134. 5:04million through something called an
135. 5:06emergency loan investment opportunity.
136. 5:08Residents were reported to be offered
137. 5:10interest rates ranging from 12 to 24%
138. 5:15with monthly interest repayments and the
139. 5:17principal repayable
140. 5:19after a year. Making promises that you
141. 5:21know you can't keep makes you sound like
142. 5:24Bernie Madoff. A 24%
143. 5:27interest rate? What on earth did they
144. 5:30have planned that made them think that
145. 5:32they would be able to honor that
146. 5:34repayment? At the very least, this all
147. 5:37sounds morally repugnant. There have
148. 5:39also been reports of further requests
149. 5:41for money,
150. 5:42including approximately $360,000
151. 5:46allegedly needed to cover fuel costs. A
152. 5:49commenter in an unofficial Villa Vie
153. 5:51Facebook group claims that Kathy Villaba
154. 5:54had issued an urgent request for that
155. 5:56amount, warning that residents could be
156. 5:58required to leave if the money wasn't
157. 6:01raised. When I wrote that article back
158. 6:03in 2024,
159. 6:05residents were already reporting
160. 6:06problems with hot water, toilets, air
161. 6:09conditioning, and sewage smells. There
162. 6:11were complaints about furnishings,
163. 6:13facilities, and unexpected itinerary
164. 6:15changes. And bloody hell, things haven't
165. 6:18exactly been plain sailing since either,
166. 6:20have they? But in that article, I wrote,
167. 6:23"One has to wonder how long they can
168. 6:26survive this fiasco with problems
169. 6:28stacking up by the day." Passengers
170. 6:30growing increasingly frustrated and a
171. 6:32global audience watching this
172. 6:34slow-motion shipwreck unfold. Funny
173. 6:36enough, they never invited us to any
174. 6:38press trips, but I would have been
175. 6:39delighted to have been proved wrong. But
176. 6:41I'm not finishing this video without
177. 6:43giving mention to Michael Peterson, the
178. 6:46face of Villa Vie. He was previously
179. 6:48managing director of Life at Sea
180. 6:50Cruises, which promised passengers a
181. 6:523-year voyage around the world. The
182. 6:54company initially planned to use a ship
183. 6:56called Gemini, but disagreements
184. 6:58developed over whether she was suitable
185. 7:00for the proposed voyage. Peterson and
186. 7:03several colleagues left the business in
187. 7:04May 2023
188. 7:06following a dispute with Miray Cruises,
189. 7:08the company behind the operation. There
190. 7:11were subsequently disagreements over
191. 7:12cabin sales and commissions, and Miray
192. 7:15brought a defamation lawsuit against
193. 7:17Peterson,
194. 7:19which it later withdrew. And then, in
195. 7:21November 2023, Life at Sea Cruises
196. 7:24canceled its voyage after failing to
197. 7:27secure the vessel it needed. Prospective
198. 7:29passengers, some of whom had already
199. 7:32sold their homes or made substantial
200. 7:34financial commitments, were left facing
201. 7:36enormous uncertainty. Now,
202. 7:39Peterson had left Life at Sea months
203. 7:41before the cancellation, so we can't
204. 7:43hold him responsible for every decision
205. 7:45made after his departure. But he was
206. 7:47involved in developing and selling that
207. 7:50concept.
208. 7:51And you would have thought that the
209. 7:53experience might have taught him a thing
210. 7:55or two about the risks involved with
211. 7:58this kind of operation. Yet here we are
212. 8:00again, with another residential cruise
213. 8:02venture associated with Peterson facing
214. 8:06serious financial difficulties. I would
215. 8:09love to ask him what lessons he learned,
216. 8:12what financial safeguards were put in
217. 8:14place, and how residents' investments
218. 8:16were supposed to be managed. When you're
219. 8:19asking people to spend hundreds of
220. 8:21thousands of dollars on a long-term home
221. 8:24at sea,
222. 8:25there's an enormous responsibility to
223. 8:27make sure that the business is properly
224. 8:28financed, and that you as a business
225. 8:32are prepared for unforeseen
226. 8:34circumstances
227. 8:36like an unnecessary war in Iran. But, I
228. 8:38am utterly perplexed as to why Villa
229. 8:41Vie, earlier this year,
230. 8:44was announcing plans for an additional
231. 8:46ship. There was Evora Residences, a
232. 8:49luxury residential cruising concept
233. 8:51involving a proposed vessel called
234. 8:53Project Le Mina, with some accommodation
235. 8:56reportedly priced at millions. And then
236. 8:58in July this year, there was further
237. 9:00reported about another proposed Villa
238. 9:02Vie vessel called Legacy. According to
239. 9:04Peterson, extraordinary fuel cost
240. 9:06pressures had been affecting the company
241. 9:08since February. By April, it's
242. 9:10reportedly seeking millions of dollars
243. 9:12in emergency loans from residents. Yet,
244. 9:14during the summer, the wider business
245. 9:15was still announcing expansion plans.
246. 9:17This whole venture has the smell of Fyre
247. 9:19Festival about it. An overambitious CEO
248. 9:23with dreams well beyond his reach, and
249. 9:25innocent people tangled up right in the
250. 9:27middle of it. I'll be honest with you, I
251. 9:29think there is a much bigger story here.
252. 9:31It passes the sniff test for scandal.
253. 9:34What exactly did residents purchase? Do
254. 9:36they legally own any part of the ship,
255. 9:39or have they purchased a contractual
256. 9:41right to occupy a cabin? What happens if
257. 9:43Odyssey sold? What happens if the
258. 9:45company becomes insolvent? And where do
259. 9:47residents stand if there are outstanding
260. 9:49debts to suppliers or other creditors?
261. 9:52My thoughts are with the residents who
262. 9:54were given false hope, and who have been
263. 9:56potentially left out of pocket because
264. 9:58of a businessman's arrogance, greed, and
265. 10:01an ignorance to the industry he's
266. 10:04dabbling in. But, before I go, I also
267. 10:06think we need to remember the crew who
268. 10:09may now be facing uncertainty about
269. 10:12their employment and future income.
270. 10:14There have been allegations online about
271. 10:17outstanding wages, but we haven't been
272. 10:19able to independently verify it those
273. 10:21claims. Ultimately, what is so
274. 10:23disappointing about this story is the
275. 10:25people were sold the prospect of a
276. 10:27long-term home at sea, an investment,
277. 10:30and the company now appears unable to
278. 10:33deliver any of it. And in my opinion, if
279. 10:36Villa Vie has to file for bankruptcy
280. 10:39and innocent people are left out of
281. 10:41pocket, I don't think Michael Peterson
282. 10:44should be allowed to run another
283. 10:45business. What about you? What do you
284. 10:47make of all of this? Do you think that
285. 10:49Villa Vie can recover? Or do you think
286. 10:52that the warning signs were there from
287. 10:53the very beginning? I'd be particularly
288. 10:55interested to hear from anyone who's
289. 10:57lived aboard Odyssey, worked for Villa
290. 10:59Vie, or had direct dealings with the
291. 11:01company. If you have documents or
292. 11:04first-hand information that might help
293. 11:06us understand what's happened, please
294. 11:08get in touch with Salty Way magazine at
295. 11:09[email protected].
296. 11:11And if you found this video interesting,
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304. 11:26And by the way, don't forget to go and
305. 11:28watch our Borealis documentary if you
306. 11:30haven't seen it already.