Nearly three months before Villa Vie Residences suspended operations on Tuesday, leaving residents of the “endless” cruise stranded in Cambodia, the company had already warned Odyssey residents that it was running out of money to buy fuel.
In an August 1 note to residents Described as “urgent,” Kathy Villalba, CEO and founding partner of Villa Vie, asked residents for a financial contribution to purchase fuel.
The memo, reviewed by Business Insider, said the company needed to “immediate and creative operational decisions to preserve travel.”
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The company behind the 509-cabin ship promised its residents a permanent life at sea and a trip around the world every three and a half years. This situation came to an abrupt end on Tuesday, when residents were asked to disembark with only a few hours’ notice.
In a statement Tuesday announcing the shutdown, Villa Vie said it had taken “significant steps to reduce fuel consumption” after prices soared following the start of the U.S.-Iran war against Iran in February, but that those steps had not been enough.
Villa Vie founder Mikael Petterson told Business Insider in a phone call Wednesday that soaring fuel prices triggered a “cascading effect” that resulted in the suspension of operations.
The financial pressures became evident to residents in April, two months after the start of the Iran war, when Villa Vie asked residents to lend money to the company, offering interest rates of 12% to 24%, according to a separate letter seen by Business Insider.
And by August, Villa Vie had reached a “critical point,” according to Villalba’s post, which you can read in full below.
Villalba, Petterson and Villa Vie did not respond to multiple requests for comment from Business Insider.
URGENT OPERATIONAL UPDATE Privacy reminder: This communication contains confidential and proprietary information intended only for current residents and authorized participants of the Villa Vie community. It is shared through Circle as part of our commitment to transparency and open communication. We respectfully request that you do not republish, transmit or otherwise distribute this information outside of Circle without the prior written consent of Villa Vie Residences. Dear residents, We want to provide you with a straightforward and simple update regarding Odyssey’s current operational realities. When the fuel contribution was requested a few months ago, participation was not universal. The contributions received helped some, but only covered part of the extraordinary increase in fuel costs. Since then, the company has exhausted its available reserves to cover the remaining deficit and allow Odyssey to continue operating. We had hoped that improving conditions in the region would begin to stabilize fuel prices. Unfortunately, the persistence of the conflict and the new market disruptions have caused another sharp rise in prices. It’s not just a question of route. This is an immediate cash flow challenge that directly affects our ability to purchase the fuel needed to continue the journey. Odyssey currently requires around 650 tonnes of fuel. Under normal market conditions, this fuel would cost approximately $450,000. At current prices, the cost is almost double ($800,000). We have now reached a critical point. The lack of full participation, combined with unprecedented increases in fuel costs, means we must make immediate and creative operational decisions to preserve travel. We are working to receive a partial delivery of fuel on Monday. Our berth is available until Friday 7 August at 4:00 p.m., subject to final confirmation from the Port Agent and the Port Authority of Singapore. The current recommendation is to remain docked until August 7th, then sail at a slower, more economical speed to Nha Trang for our scheduled arrival on August 12th. We are asking every resident who has not contributed previously to do so now. We are also asking those who are able to provide additional support to consider meeting these immediate fuel needs. Although each resident has a contract with Villa Vie, this international crisis has generated costs well beyond the circumstances envisaged when entering into these agreements. The financial need is real, immediate and necessary to move Odyssey forward. This is a time when preserving our home and continuing the journey requires support beyond contractual minimums from those who are able to provide it. To save fuel and reduce operating costs, we will cancel Brunei and proceed directly from Singapore to Nha Trang. This will help reduce expenses, but will not eliminate the need to finance the required supplies. We will provide a further update as soon as fuel, docking and departure arrangements are confirmed. Thank you for your understanding and support. — VVR management.”
Gn bussni
