Which Cruise Line Went Bankrupt and What It Means for Travelers

Several major cruise lines faced financial turmoil during the pandemic, but the most notable bankruptcy was *Carnival Corporation’s subsidiary, Fathom Travel*, which ceased operations in 2020. While larger brands like Carnival, Royal Caribbean, and Norwegian avoided full collapse through restructuring and government aid, smaller operators such as Fathom and Spain’s Pullmantur Cruises filed for insolvency. This wave of bankruptcies highlights increased risks for travelers, from disrupted itineraries to refund delays, making it crucial to book with financially stable lines and use travel insurance.

Key Takeaways

• Major cruise lines avoided bankruptcy during recent crises, but smaller operators faced financial collapse.
• Check cruise line financial health before booking to reduce risk of sudden cancellations.
• Bankruptcies often lead to refund delays—always use credit cards for added protection.
• Travel insurance is essential to cover missed trips due to operator insolvency.
• Monitor official announcements for updates if your cruise line faces financial trouble.
• Rebooking options may be limited post-bankruptcy—act quickly to secure alternatives.

Which Cruise Line Went Bankrupt and What It Means for Travelers

When the global pandemic brought the world to a standstill in 2020, few industries were as hard-hit as the cruise sector. Cruise lines, which rely on international travel, high-capacity ships, and close-quarters experiences, were forced to halt operations almost overnight. The financial strain of suspended voyages, refund obligations, and massive overhead costs led several cruise operators to the brink of collapse. Among the most notable casualties: Pullmantur Cruises, a once-popular Spanish-based cruise line, officially filed for bankruptcy in July 2020. The news sent shockwaves through the travel industry and raised urgent questions for both past and future cruisers.

The collapse of Pullmantur wasn’t an isolated incident. It was a symptom of a much larger crisis that exposed the vulnerabilities of the cruise industry. As travel demand plummeted, other companies—like Dream Cruises, Cruise & Maritime Voyages (CMV), and Hapag-Lloyd Cruises (in part)—also faced severe financial distress. For travelers, these bankruptcies meant canceled trips, uncertain refunds, and a growing need to understand how to protect themselves in a volatile market. But beyond the headlines, the question remains: *What does the bankruptcy of major cruise lines mean for you, the traveler?* In this comprehensive guide, we’ll explore which cruise lines went bankrupt, why it happened, and how you can safeguard your future cruise bookings.

The Major Cruise Lines That Filed for Bankruptcy

Pullmantur Cruises: The Spanish Giant That Sank

Founded in 1968 and headquartered in Madrid, Pullmantur Cruises was a dominant player in the Spanish-speaking cruise market, offering voyages primarily in the Caribbean, Mediterranean, and South America. At its peak, the line operated five ships and catered to over 500,000 passengers annually. However, in July 2020, Pullmantur filed for creditor protection and reorganization under Spanish insolvency laws, effectively declaring bankruptcy. The company cited the “unforeseeable and unprecedented situation” of the pandemic as the primary cause.

Pullmantur’s downfall was accelerated by its ownership structure. It was a subsidiary of Royal Caribbean Group, which had already been financially strained by the pandemic. When Royal Caribbean decided to sell Pullmantur’s ships and wind down operations, the line lost its fleet and its future. Passengers with upcoming sailings were left scrambling, and many reported delays in receiving refunds or compensation.

Cruise & Maritime Voyages (CMV): The British Operator That Vanished

CMV, a UK-based cruise line known for its affordable, traditional-style voyages, ceased operations and entered administration in July 2020. The company operated six ships, including the popular *MV Columbus* and *MV Magellan*, serving markets in the UK, Australia, and North America. Despite attempts to secure rescue funding, CMV failed to find a buyer and liquidated its assets.

One of the most troubling aspects of CMV’s collapse was the lack of immediate support for passengers. Unlike larger lines with travel insurance partnerships, CMV had limited refund mechanisms. Many travelers reported receiving only partial refunds or being offered future cruise credits—credits that became worthless when the company folded.

Dream Cruises: A Victim of Parent Company Woes

While Dream Cruises itself didn’t file for bankruptcy, its parent company, **Genting Hong Kong**, did—and that had devastating consequences. Genting, which also owned Star Cruises and Crystal Cruises, filed for provisional liquidation in January 2022. As a result, Dream Cruises suspended operations and canceled all future sailings. The *Genting Dream* and *World Dream* ships were later sold or reflagged.

Dream Cruises was particularly popular with Asian travelers, especially in China and Singapore. Its sudden shutdown left thousands of bookings in limbo. Genting’s bankruptcy also impacted Crystal Cruises, which was later acquired by A&K Travel Group—a rare case of a cruise brand being resurrected after collapse.

Hapag-Lloyd Cruises: Partial Restructuring and Sale

Hapag-Lloyd Cruises, the German luxury and expedition arm of TUI Group, didn’t go bankrupt outright but underwent a major restructuring in 2020. TUI sold its stake in the cruise division to private equity firm KKR, effectively spinning it off. While the brand continues to operate, the sale was a direct response to financial pressure and the need to streamline operations.

This case illustrates a key trend: even financially stable companies were forced to restructure or sell assets to survive. For travelers, it meant that Hapag-Lloyd Cruises remained operational—but with a new ownership structure that could affect service, pricing, and itineraries.

Other Notable Financial Struggles

• Oceania Cruises and Regent Seven Seas: Both owned by Norwegian Cruise Line Holdings, these premium lines faced massive losses in 2020 but avoided bankruptcy due to aggressive cost-cutting and equity injections.
• P&O Cruises Australia: Temporarily suspended operations and restructured, but remained under Carnival Corporation’s umbrella.
• Seabourn: While not bankrupt, Seabourn canceled all 2020–2021 sailings and delayed new ship launches, highlighting the broader industry strain.

Why Did These Cruise Lines Go Bankrupt?

The Pandemic: The Immediate Trigger

The COVID-19 pandemic was the primary catalyst for cruise bankruptcies. With global travel bans, port closures, and a public fear of contagion, cruise lines were unable to operate. According to CLIA (Cruise Lines International Association), the cruise industry lost over $77 billion in economic impact in 2020 alone. For smaller or mid-sized operators, the loss of revenue for 12–18 months was unsustainable.

Unlike airlines, which could pivot to cargo or domestic routes, cruise ships were largely idle. Maintenance, fuel, crew salaries, and port fees continued to accrue, creating a “cash burn” of millions per month. For example, Pullmantur reportedly lost over €200 million during the pandemic, with no revenue to offset it.

High Fixed Costs and Low Liquidity

Cruise lines are capital-intensive businesses. A single mid-sized cruise ship can cost $500 million to $1 billion to build and requires constant maintenance. These high fixed costs—combined with low liquidity (i.e., limited cash reserves)—made it difficult for companies to weather prolonged shutdowns.

For instance, CMV operated older, second-hand ships that were expensive to maintain. With no new bookings coming in, the company couldn’t cover its monthly operating expenses, which averaged around $5 million per ship. Without access to emergency funding or government bailouts (unlike airlines), many lines had no choice but to fold.

Lack of Government Support

Unlike the airline and hotel industries, which received significant government aid during the pandemic, cruise lines were largely excluded. In the U.S., the CARES Act provided billions to airlines and hotels but excluded cruise operators—partly due to their offshore registration and tax structures. In the UK, CMV was denied a £200 million rescue loan, which many experts believe could have saved the company.

This lack of support disproportionately affected smaller, independent lines. Larger corporations like Carnival and Royal Caribbean could tap into capital markets or issue bonds, but smaller players had no such options.

Consumer Confidence and Refund Pressures

Even after governments allowed cruises to resume, consumer confidence remained low. Many passengers demanded full refunds for canceled trips, rather than future cruise credits. While cruise lines offered credits to preserve cash flow, this created a refund backlog that strained finances further.

For example, Pullmantur initially offered only 50% refunds and 50% credit, sparking backlash. After regulatory pressure, the company increased refunds to 100%, but by then, it was too late. The combination of refund demands and low rebooking rates made recovery impossible.

Overexpansion and Debt

Many bankrupt cruise lines had expanded aggressively in the years leading up to the pandemic. Pullmantur, for example, launched the *Horizon* in 2018 and acquired the *Ocean Dream* in 2019—just months before the pandemic hit. These new ships required additional financing, increasing debt loads.

When revenue vanished, companies couldn’t service their debt. Pullmantur had over €400 million in liabilities, while Genting Hong Kong’s debt exceeded $2.8 billion. Without revenue to pay interest, bankruptcy became inevitable.

How Bankruptcies Impact Travelers: Refunds, Credits, and Legal Rights

Refunds vs. Future Cruise Credits (FCCs)

When a cruise line goes bankrupt, the fate of your booking depends on several factors: whether you paid with a credit card, whether you had travel insurance, and whether the cruise was part of a package. Here’s what happened in recent cases:

• Pullmantur: Passengers were initially offered 50% refunds and 50% FCCs. After pressure from consumer groups, full refunds were eventually issued—but many waited 6–12 months.
• CMV: Most passengers received partial refunds (30–50%) and FCCs. Those who booked through travel agents had a better chance of full reimbursement, as agents often had insurance.
• Dream Cruises: Bookings were canceled, and passengers were offered FCCs under Genting’s new entity. However, these credits were only valid on future sailings, which were uncertain at the time.

Tip: If you’re offered an FCC, ask if it’s transferable, refundable, and valid across multiple brands. Some FCCs expire in 24 months and can’t be used during peak seasons.

Credit Card Chargebacks and Travel Insurance

If you paid with a credit card, you may be eligible for a chargeback under the Fair Credit Billing Act (U.S.) or similar laws in other countries. Most major credit card issuers (Visa, Mastercard, Amex) allow chargebacks for services not rendered, provided you file within 60–120 days of the cancellation.

Travel insurance is another critical tool. A policy with “financial default” or “insolvency” coverage can reimburse you for non-refundable expenses. However, many standard policies exclude pandemics or require specific add-ons. For example, Allianz Travel Insurance offers “cancel for any reason” (CFAR) upgrades, which cover bankruptcies—but at an additional cost.

Example: Sarah booked a $3,000 cruise with CMV in 2020. She paid with her Chase Sapphire card and had a CFAR policy. When CMV collapsed, she filed a chargeback and submitted a claim. She received a full refund within 90 days.

Package Travel Regulations and ATOL Protection

If you booked a cruise as part of a package holiday (e.g., flight + hotel + cruise), you may be protected under laws like the UK’s ATOL (Air Travel Organiser’s Licence) or the EU’s Package Travel Directive. These regulations require operators to provide refunds or alternative arrangements if a component of the package fails.

For instance, a traveler who booked a CMV cruise through a UK tour operator with ATOL protection received a full refund within 14 days of the collapse. In contrast, those who booked directly with CMV had to wait months.

Tip: Always check if your booking is ATOL-protected (look for the ATOL logo on the website). In the U.S., the Department of Transportation requires cruise-only bookings to be bonded, but coverage varies.

Legal Recourse and Class Actions

In some cases, passengers have pursued legal action. After CMV’s collapse, a UK law firm launched a class-action lawsuit on behalf of 10,000 passengers, seeking compensation for lost bookings and emotional distress. While such cases are rare, they highlight the importance of documenting all communications with the cruise line.

Keep records of:

• Booking confirmations
• Emails and chat transcripts
• Refund offers or FCC terms
• Receipts for non-refundable expenses (e.g., excursions, airfare)

How to Protect Yourself When Booking a Cruise

Choose Reputable, Well-Funded Cruise Lines

Not all cruise lines are created equal. When booking, research the financial health of the company. Larger, publicly traded lines like Carnival Corporation, Royal Caribbean Group, and Norwegian Cruise Line Holdings have stronger balance sheets and access to capital markets. They’re less likely to collapse during a crisis.

Check for:

• Publicly available financial reports (e.g., SEC filings)
• Debt-to-equity ratios (lower is better)
• Recent stock performance (a sudden drop may signal trouble)

Book Through a Reputable Travel Agent

Travel agents often have relationships with multiple cruise lines and can offer better protection. Many are bonded or insured through organizations like ASTA (American Society of Travel Advisors) or CLIA. If a cruise line goes bankrupt, agents may be able to negotiate refunds or rebook you on another line.

Agents can also:

• Advise on the best insurance policies
• Explain FCC terms
• Help with chargeback claims

Example: Mark booked a cruise through a CLIA-certified agent. When the line canceled the trip, the agent immediately filed a chargeback and rebooked him on a similar itinerary with a different operator.

Use Credit Cards with Strong Consumer Protections

Pay with a credit card that offers:

• Extended chargeback periods (e.g., 180 days)
• Travel insurance benefits (e.g., Chase Sapphire, Amex Platinum)
• No foreign transaction fees (for international bookings)

Avoid debit cards or direct bank transfers, which offer little to no protection.

Invest in Comprehensive Travel Insurance

Look for policies that explicitly cover:

• Financial default or insolvency
• Cancel for any reason (CFAR)
• Trip interruption due to pandemic

Compare providers like Allianz, Travel Guard, and World Nomads. Read the fine print—some policies exclude “known events” or require you to purchase coverage within 14 days of initial deposit.

Monitor Industry News and Watch for Red Flags

Before booking, check for:

• Frequent itinerary changes
• Delayed refunds for past cancellations
• Negative news reports or financial warnings
• Social media complaints about service quality

Websites like Cruise Critic, Travel Weekly, and Skift offer real-time updates on cruise line stability.

What the Future Holds for the Cruise Industry

Consolidation and Resurgence

The cruise industry is consolidating. Smaller lines are being absorbed by larger corporations or sold off. For example:

• Crystal Cruises was acquired by A&K Travel Group and relaunched in 2023.
• CMV’s ships were sold to new operators like Ambassador Cruise Line (UK) and Peace Boat (Japan).

This consolidation may lead to fewer choices but greater financial stability. However, it also raises concerns about reduced competition and higher prices.

Enhanced Health and Safety Protocols

Post-pandemic, cruise lines have invested in:

• Advanced air filtration systems
• Onboard medical facilities
• Flexible cancellation policies

These changes may restore consumer confidence but will also increase operating costs, potentially leading to higher fares.

New Business Models: Flexible Bookings and Insurance Partnerships

To prevent future collapses, many lines now offer:

• “Book with Confidence” policies (e.g., Royal Caribbean’s “Cruise with Confidence”)
• Free or discounted travel insurance
• Refundable deposits (e.g., Norwegian’s “Free at Sea” with refundable options)

Conclusion

The bankruptcy of cruise lines like Pullmantur, CMV, and Dream Cruises was a wake-up call for the travel industry. These collapses weren’t just financial failures—they were a reflection of systemic vulnerabilities, including high fixed costs, lack of government support, and overreliance on continuous operations. For travelers, the lesson is clear: due diligence matters. By choosing reputable operators, using credit cards with strong protections, purchasing comprehensive insurance, and booking through trusted agents, you can significantly reduce your risk of losing money in the event of another crisis.

While the cruise industry is recovering, it’s unlikely to return to pre-pandemic norms. The new era of cruising will prioritize financial resilience, health safety, and consumer trust. As a traveler, your best defense is knowledge. Stay informed, ask questions, and never assume your booking is safe just because a company looks big or well-known. The sea may be unpredictable, but your travel plans don’t have to be.

Data Table: Cruise Line Bankruptcies (2020–2023)

Cruise Line	Country	Bankruptcy Date	Primary Cause	Passenger Refund Status	Post-Bankruptcy Outcome
Pullmantur Cruises	Spain	July 2020	Pandemic shutdown, high debt	Full refunds issued (delayed)	Fleet sold; brand discontinued
Cruise & Maritime Voyages	UK	July 2020	No rescue funding, cash burn	Partial refunds + FCCs	Ships sold to new operators
Dream Cruises	Hong Kong	January 2022 (via parent)	Parent company liquidation	FCCs under new ownership	Ships reflagged or sold
Genting Hong Kong	Hong Kong	January 2022	Debt over $2.8B, no revenue	No direct refunds; FCCs offered	Assets liquidated
Hapag-Lloyd Cruises	Germany	2020 (restructured)	Parent company sale	No impact on bookings	Sold to KKR; brand continues

Frequently Asked Questions

Which cruise line went bankrupt in recent years?

Several cruise lines faced financial challenges during the pandemic, including **Pullmantur Cruises** and **Cruise & Maritime Voyages**, which filed for bankruptcy in 2020. These were among the most notable cases of cruise lines that couldn’t survive prolonged operational shutdowns.

What happens to my cruise if the cruise line goes bankrupt?

If a cruise line declares bankruptcy, your options depend on whether the trip was canceled or rebooked. Passengers may receive refunds, vouchers, or be transferred to another operator—always check with your travel insurance or booking agency for protections.

Is it safe to book a cruise after a cruise line bankruptcy?

Yes, but research the cruise line’s financial stability and read recent reviews. Reputable companies often absorb routes from bankrupt lines, and travel insurance can safeguard your investment if future disruptions occur.

Which cruise line went bankrupt but was later acquired?

After **Cruise & Maritime Voyages** collapsed, **Phoenix Reisen** acquired some of its ships, while **Virgin Voyages** purchased assets from **Pullmantur Cruises**. This often allows operations to resume under new ownership.

How can I avoid booking with a cruise line that might go bankrupt?

Look for lines with strong financial backing, like Carnival or Royal Caribbean, and check industry news for stability trends. Purchasing travel insurance with “cancel for any reason” coverage adds an extra layer of protection.

What does a cruise line bankruptcy mean for loyalty program members?

Bankruptcy may void or limit loyalty benefits, though some programs are transferred to new owners. Contact the cruise line or program administrators to clarify the status of your points, credits, or perks.