Cruise operator plans bankruptcy after voyage stops in Cambodia

A cruise ship promoted as a home at sea has halted its around-the-world voyage in Cambodia, leaving more than 200 passengers to find somewhere else to stay as its operator prepares to file for bankruptcy.

Florida-based Villa Vie Residences suspended operations of the MV Odyssey on Tuesday, saying it could no longer absorb soaring fuel costs. CEO Mikael Petterson told CBS News on Wednesday that the company plans to file for Chapter 11 bankruptcy after running out of money while seeking a financial partner.

The ship arrived at the Cambodian port of Sihanoukville on Friday. Cambodian officials said it was carrying 203 passengers, mostly Americans, and 156 crew members. Some passengers said they had only seven hours’ notice to disembark and had to arrange their own accommodation, Al Jazeera reported.

Petterson told CBS News that the company had paid about $700 per ton of fuel before the war with Iran began in late February, but was now paying $2,000 to $3,000 per ton. The Odyssey uses 700 to 800 tons a month, he said. Villa Vie said its average monthly fuel cost per cabin had risen from $1,800 to an estimated $6,000 to $8,000 in parts of Asia.

“When you divide it over 300 people on board, it’s just backbreaking,” Petterson told CBS News. He said the company had slowed the ship and kept it in ports for five or six days at a time to save fuel, but the measures were not enough. “For us, when our monthly expenses go up from $400,000 to $2 million, where are we going to get the $1.6 million?” he said.

Villa Vie said passing the full increase on to residents was not a realistic option. “We have been unable to continue carrying the resulting operating losses,” the company said Tuesday. Petterson told CBS News the company had borrowed money and stretched its payrolls while trying to secure new funding.

The Odyssey set sail from Belfast, Northern Ireland, in October 2024 on a voyage planned to last three and a half years. Villa Vie offered cabins for long-term living; some residents bought them for hundreds of thousands of dollars, and some sold their homes. CBS News reported that buyers were given a minimum 15-year guarantee of residency aboard the ship.

Retiree Benjamin Schatz had expected the Odyssey to be his permanent home. “Honestly, right now, I’m in denial and in shock, and I’m heartbroken,” he told CBS News after being given hours to pack. “There are people now who are homeless and who have very little money and don’t know what they’re going to do.”

Paul and Lynn Montoya, a retired Wyoming couple who boarded 17 months ago, told Al Jazeera they had faced itinerary changes, unreliable internet and declining food quality. Lynn Montoya alleged mismanagement and unpaid crew members. Other passengers hoped a new company or residents themselves might keep the venture going. Carol Larson, 69, who said she bought her cabin for $120,000 in instalments, said she did not regret it: “I feel blessed to have been part of the experiment of residential cruising.”

Cambodian officials said the Odyssey was expected to refuel and leave Saturday, but the operator had not publicly confirmed a departure date.