Florida-based Villa Vie Residences says fuel did it in. The company said its monthly fuel cost per cabin climbed from $1,800 to between $6,000 and $8,000 after the Iran war sent oil prices soaring, and that passing the full increase on to residents was not realistic. It sold years of life at sea at a set price, and its highest variable cost more than tripled.
A Cambodian official put the count at 203 passengers and 156 crew, and most residents were American. The ship is reportedly bound for Singapore, where it could eventually be auctioned.
Before it landed on the chopping block, the 642-foot Odyssey was home to people who planned to stay for years. Mechanical problems kept it in Belfast, Northern Ireland, until October 2024, when it finally set off on a voyage meant to circle the globe every three and a half years, reaching 147 countries on the first loop. A four-year stay cost $319,998 for two people sharing a cabin.
For others, it was a lifetime commitment. Some sold their houses, and the company’s Endless Horizons program charged a one-time $299,999 for a single cabin or $499,999 for a double. When Fortune covered the launch in 2023, Villa Vie was selling cabins from $99,000, plus annual fees of $21,000 to $48,000.
As recently as July, the company announced a second ship, Legacy, saying Odyssey had sold 85% of its residences. Then on Oct. 27, residents were told they had roughly eight hours to leave. The ship was 754 days into its planned voyage.
“Since the conflict began in late February, we have taken significant steps to reduce fuel consumption, including slowing the itinerary and spending more time in port,” the company said in a statement the week it halted operations. It wasn’t enough.
Residents who sold their business to live at sea
Lanette Canen and Johan Bodin, both 56, were longtime Maui residents swept up in the idea of seeing the world from a residential cruise ship. What surprised them most was how much cheaper life at sea could be: no car or mortgage payments, meals included, laundry handled. It was the deal of a lifetime.
So they sold their business, moved aboard, and began documenting the trip on their YouTube channel, Living Life on a Cruise, which now has more than 55,000 subscribers.
In their final vlog from the ship, the couple said they started hearing about the company’s financial trouble two months before they were told to leave. The waiting made the dream “emotionally exhausting.”
“I felt really drained the last two months … you get beat down, and then the next day or two, like: oh boy, we have hope, we have investors, we have this coming, and then the next two days, you get beat down again,” Bodin said.
The couple says they are not in dire financial straits and plan to keep traveling through Southeast Asia. But they know residents who put their life savings and retirement funds into the ship and now don’t know what comes next.
A founder who blames the war
Founder and executive chairman Mikael Petterson has taken responsibility, calling himself “the villain in the story” in an interview with Business Insider. He still maintains the Iran war is what sank the business.
“I think we would have been absolutely fine and we would have seen this through, if there was no Iran war,” Petterson said.
The Iran war’s bill comes due for households
Before U.S. and Israeli strikes on Iran began on Feb. 28, Brent crude traded around $70 a barrel. It has since repeatedly broken $100, topping $126 this spring. Crude has slipped back below $100, but regular gasoline still averaged $4.10 a gallon on Nov. 4, according to AAA.
U.S. consumers paid $160 billion more for gasoline and diesel from March 1 through Oct. 14 than they would have without the war, according to the Centre for Research on Energy and Clean Air. That is the largest bill of any country, Fortune reported.
Mark Zandi, chief economist at Moody’s Analytics, estimated in mid-October that the war has cost the average American household nearly $2,000. About $1,100 of that comes from higher energy prices. The rest comes from higher interest rates and the cost of military operations.
For Villa Vie, the next deadline is its own. The company has given itself about 60 days to restructure and raise new money, says no outcome is assured, and Petterson has told NBC News that a Chapter 11 filing may be necessary.
Florida-based Villa Vie Residences is facing significant financial challenges, primarily attributed to skyrocketing fuel costs resulting from the ongoing conflict in Iran. The company’s monthly fuel expenses per cabin soared from approximately $1,800 to between $6,000 and $8,000, making it unsustainable to pass the full increase onto residents who had committed to long-term stays on their cruise ship, the Odyssey. The company had sold years of life at sea at fixed prices, but with fuel costs more than tripling, they found themselves in a precarious position.
The Odyssey, a 642-foot vessel, was home to 203 passengers and 156 crew members, most of whom were American. The ship was set to travel to Singapore, where it may eventually be auctioned. Before its financial troubles, the Odyssey was meant to embark on a global journey, covering 147 countries over a planned duration of three and a half years. A four-year residence aboard cost $319,998 for two people sharing a cabin. For those seeking a more permanent arrangement, Villa Vie’s Endless Horizons program offered cabins for a one-time fee of $299,999 for a single cabin or $499,999 for a double, alongside annual fees ranging from $21,000 to $48,000.
In July, Villa Vie had announced plans for a second ship, Legacy, after reportedly selling 85% of the cabins on the Odyssey. However, on October 27, residents were abruptly informed they had approximately eight hours to vacate the ship, which was only 754 days into its planned voyage. The company had attempted to mitigate fuel costs by slowing down their itinerary and spending more time in port, but these measures ultimately proved insufficient.
Among the residents were Lanette Canen and Johan Bodin, a couple from Maui who sold their business to live aboard the ship. They initially found life at sea to be economically advantageous, with no car or mortgage payments and all meals included. However, they began to hear about the company’s financial troubles two months prior to their eviction, leading to an emotionally draining experience. They documented their journey on their YouTube channel, « Living Life on a Cruise, » which has garnered over 55,000 subscribers. While they do not face immediate financial distress and plan to continue traveling through Southeast Asia, they expressed concern for their fellow residents who invested their life savings and retirement funds in the ship.
Mikael Petterson, the founder and executive chairman of Villa Vie, has publicly taken responsibility for the company’s predicament, referring to himself as « the villain in the story. » He attributes the company’s downfall to the Iran war, asserting that without the conflict, the business would have remained viable. The war’s impact has been felt broadly, with the price of Brent crude oil spiking from around $70 a barrel before the conflict to over $100, causing significant financial strain on consumers.
According to the Centre for Research on Energy and Clean Air, U.S. consumers paid an additional $160 billion for gasoline and diesel from March 1 through October 14 due to the war, representing the largest financial burden of any country. Mark Zandi, the chief economist at Moody’s Analytics, estimated that the average American household has incurred nearly $2,000 in additional costs due to the war, largely from elevated energy prices and increased interest rates.
Looking ahead, Villa Vie has set a 60-day deadline for restructuring and raising new funds, although Petterson acknowledges that there are no guarantees of success. The company may also need to consider a Chapter 11 bankruptcy filing to navigate its financial troubles.
In summary, Villa Vie Residences’ ambitious venture into residential cruise living has been severely impacted by external geopolitical factors, leading to significant operational and financial challenges. While some residents like Canen and Bodin may continue their travels, many others face uncertain futures as the company attempts to navigate its crisis.
