Three-year world cruise set to sail at higher price

A unique offer to cruise around the world for three years — which appeared at risk of running aground earlier this year — now is boasting of a bigger ship.

But the prices are also higher.

And some passengers who have already booked berths on the 130,000-mile cruise set to sail in November — as well as would-be passengers — told CNBC they are concerned about another new wrinkle in the sales pitch: the requirement that they board the ship MV Lara at a port outside the United States.

That requirement would let Life at Sea Cruises, and its parent company Miray Cruises, avoid paying for a performance bond required by the Federal Maritime Commission for cruise ships embarking passengers at U.S. ports.

Such bonds reimburse U.S.-boarding passengers if cruise operators fail to complete the booked trips.

In March, Life at Sea originally offered what it called the “world’s first — and only — three-year cruise” aboard the prior ship, MV Gemini.

Prices started at $29,999 per year for individuals sharing an inside cabin for the cruise, ramping up to nearly $109,999 per year for a larger suite, with Gemini expected to visit 375 ports in 135 countries and seven continents after setting sail Nov. 1. Gemini had room for up to 1,074 passengers.

Two months later, customers who had signed up for the voyage were startled to learn that Mikael Petterson, the then-managing director at Life at Sea, and the rest of his team had left the Miray subsidiary amid a dispute over whether the Gemini was qualified to handle the trip, and the status of an FMC bond.

Petterson notified Facebook followers of the trip in May that he believed the Gemini “is completely unseaworthy and will never complete a world cruise.”

“I decided to refund everyone their credit card deposits 3 weeks ago,” Petterson wrote in a public post on Facebook.

Petterson’s comments dismayed many people who had signed up for the trip, including one man who had begun the process of selling his home to pay for it.

Barbara, a Florida resident who had put down a deposit for the cruise, backed out of the trip in May, following the example of a number of other passengers. She requested that her last name not be used in this article due to privacy concerns.

“Rather risky for me,” said Barbara, when asked why she pulled out. She said she rebooked on a competing three-year cruise with Victoria Cruises, aboard the Majestic.

At the time, Miray Cruises disputed Petterson’s characterization of Gemini, and also vowed that the trip would proceed as planned, although it was not clear whether that would involve Gemini or another ship.

Miray Cruises also sued Petterson in Florida state court with claims that include defamation and interfering with business relationships.

Petterson, who is fighting those civil claims, declined to comment to CNBC.

“The unseaworthy comment never had any validity to it,” Miray CEO Kendra Holmes told CNBC.

“The MV Gemini has always been considered seaworthy as evidenced by the [Passenger Ship Safety Certificate] certification, which is issued after inspections by the class society,” she said. “Just last week, the Gemini was inspected as scheduled and the PSSC certification was renewed.”

Despite that, Miray Cruises is not using the Gemini, recently telling customers that the company will instead put them on the Lara, which has space for 1,250 passengers. Miray said it is offering 85% of the ship’s available berths “so that our residents feel comfortable and can enjoy all the public spaces without feeling overcrowded,” Holmes said.

“Shortly after announcing in March to unprecedented positive reception, we knew we would have to acquire a larger ship to accommodate the high demand for our voyage,” she said.

Holmes said that passengers who originally booked trips when the Gemini was the ship planned for use “have been converted to MV Lara at the price they locked in their cabin at originally.”

But, she added, “As with any voyage, prices increase at a steady rate and so the sooner residents book the voyage with us, the lower the price will be.”

As of now, Miray was offering a berth to individuals who would share an inside cabin for $38,513, a more than 28% hike in the price for that option aboard Gemini. Outside cabins and balcony cabins likewise have increased in price.

One woman who booked a berth aboard Gemini months ago at the initial price offered, Shirene Thomas, told CNBC that she is in the process of making her final payments for the cruise now that Lara will be the ship.

Thomas, of Wilmington, North Carolina, has dipped into her retirement money to pay for the trip, and has sold and donated most of her belongings.

While she almost pulled out of the trip after controversy over the initial plan to use the Gemini for the cruise, Thomas is now committed to the voyage.

Thomas, who is in her 50s, is retired from a career in social services, and has been an avid traveler all her life. After college, she tried a cruise as her first official vacation from work and has been a cruise junkie ever since. Although she has lived in or visited close to 70 countries, many more remain on her bucket list, and the 135 countries included in this venture will hit all of them, and then some.

“I understand turbulence with staff turnover left some understandably on edge, but I feel the Life at Seas team has been honest, transparent and exceedingly communicative with everyone about the situation,” Thomas said. “They’ve held countless webinars to answer questions and quell people’s fears and been very approachable.”

Although she’s nervous about what to expect on the voyage, she said “those fears are overshadowed by the excitement of being a pioneer aboard this first-ever world-residence-at-sea adventure.”

Thomas said she was particularly “looking forward to the volunteerism and humanitarian opportunities that are one of the missions of Life at Seas.”

But, given the absence of a U.S. performance bond, she also is using her credit card to make payments for the cruise, hoping it will provide her with some recourse to recoup her money if the cruise is aborted.

“I know nothing is 100% safe,” Thomas said.

But, she added, “Everything points to the real deal.”

“I trust they would give us our money back if it doesn’t go,” Thomas said.

Other people CNBC spoke to raised concerns about the lack of a performance bond held by Miray Cruises, which is now encouraging passengers to begin their journey on Nov. 1 at Istanbul with the opportunity to board four days later in Barcelona.

Miray Cruises had originally offered customers the opportunity to board Gemini in Miami.

But by removing that U.S. port as an option, the company avoided the need to pay for a performance bond.

“There are no bonding requirements for a cruise anywhere other than in the U.S. and if you were to travel with Miray Cruises or any other cruise line from a non-U.S. port, you would not be bonded,” said Holmes, the Miray CEO.

“Additionally, an FMC bond doesn’t cover everyone on the ship — it only covers passengers who embark in the United States,” Holmes added.

“When we first started taking applications for residency, we realized that the number of residents who requested embarkation at a U.S. port was extremely low and that most of our U.S. residents anticipated embarking in Europe. That number had dropped even more as people do not want to miss the first 15 days onboard with their new neighbors,” she said.

When asked why Miray, after initially offering embarkation in Miami, switched to Freeport, Bahamas, Holmes said, “Most of our residents chose to embark in Europe — either joining us for our planned celebrations pre-sailing in Istanbul or at our second embarkation point in Barcelona.”

She said fewer than a dozen passengers, out of hundreds, requested an embarkation in Miami.

“Given this low number and the flexibility of these residents, we moved the embarkation to Freeport, Bahamas, to give us even more days in South America for our itinerary,” Holmes said.