Ambassadors International plans to sell all its principal non-Windstar Cruises assets, confirmed Art Rodney, chairman of Ambassadors.
Assets to be sold include the company's marine division, with its marina construction and marine operations business, and its travel and sales events division.
Of the former river boat fleet, two vessels are for sale in Portland; the Delta Queen has been leased as a hotel in Chattanooga; the American Queen has been returned to Marad and the Mississippi Queen would require a lot of work before returning to service.
The sale would strengthen Ambassador's balance sheet (the company's total debt is approximately $126 million) and also provide cash for expansion.
"We have plans to expand," Rodney said. "There are other small ships out there in similar types of niches." But first the company must ride out 2009 and 2010, which Rodney said will be tough years for all the cruise lines. He expects 2011 and 2012 to be better.
Rodney told Cruise Industry News that a three-ship operation is viable, and that Windstar was profitable when acquired. "We can do very well with Windstar," he said, adding that the three ships are rated very highly and that "passenger comments have never been better."
Describing the product, Rodney said the company delivers a very relaxed experience in a casual, small ship environment.
Recent product upgrades include alternative dining and new bedding and linens.
Windstar is also expanding its international sales efforts, focusing on Europe and Australia.
V. Ships handle marine and hotel operations, while Windstar's head office continues to be in Seattle.
During the winter the three sail-assisted ships sail from St. Thomas, Barbados and Costa Rica, offering a "paradise with their stem platforms for water sports."
During the summer, the three ships sail in the Mediterranean. Two new seven-day cruises to the Canary Islands were announced for this November.
Normally, Windstar enjoys a lot of incentive business, Rodney said, and also has 15 to 20 full-ship charters during the year.
Rodney replaced Joe Ueberroth as chairman effective last month, while the cruise and corporate headquarters will be consolidated in Seattle. Rodney was previously president of Disney Cruise Line and before that president of Crystal Cruises. He helped launch both brands.
Ambassadors has not reported year-end and fourth quarter earnings yet, but reported average revenue per passenger day of $484.65 for the third quarter of 2008 for Windstar.
Ambassadors reported net income of $9.5 million, or $0.81 per share, on revenues of$83.5 million for the third quarter. For the first nine months of 2008, Ambassadors reported a net loss of $4.8 million on revenues of $221 million.
At press time, the company's stock was listed at $0.51 compared to a 52-week low/high of $0.23/$11.44.