Cruise tourism, a booming industry vital to many coastal and island destinations, is increasingly coming under scrutiny as governments seek to better manage the impact on local infrastructure and the environment. New taxes and formalities are being proposed or implemented, marking a worldwide trend. All the more reason to panic the tourism industry, which fears a drop in arrivals and an impact on the local economy.
Mexico lowers passenger tax
In Mexico, federal authorities have negotiated with some of the world's largest cruise lines. The agreement covers Non-Resident Duty (DNR)an unpopular tax originally planned at 42 $ and due to be levied from January this year.
There Federation of Florida and Caribbean Cruise Associations (FCAA/FCCA)which represents major companies such as Royal Caribbean And Norwegian Cruiseshad fiercely opposed this tax when it was announced at the end of 2024. In particular, the association had written to the President to request its removal, arguing that it could jeopardize industry investment in Mexico, including billions earmarked to help rebuild Acapulco and develop new destinations.
Following negotiations, it was agreed that the tax on arriving cruise tourists would be set at 5 $ from next July, before increasing in annual increments. It will reach 10 $ in 2026, 15 $ in 2027 and 21 $ by August 2028, i.e. half the initial amount.
The gradual introduction and reduction of the amount is intended to avoid what cruise lines consider a negative impact on tourism and the local economy.This is particularly true of key ports such as Cozumel and Mahahual in the Riviera Maya.
The DNR is generally a tax applied to tourists entering Mexico by land or sea. In Quintana Roo, Mexico's top cruise destination, the reduction of the DNR to 5 $ will benefit small local businesses, as several cruise itineraries had eliminated or were considering eliminating Riviera Maya ports in favor of tax-free destinations. The negotiated agreement also requires cruise lines to support the "Hecho en México"(Made in Mexico) by buying more local products. They should also stimulate passenger flow and help rebuild Acapulco.
The FCCA welcomed the temporary postponement and suspension of the tax, but stressed its concern about the devastating negative impact the measure could have on Mexico's tourism industry, its economy and the livelihoods of coastal communities. She continues to campaign for the complete elimination of the immigration tax for cruise passengers, claiming that if implemented, companies expect a gradual decline in arrivals, which would significantly affect employment for cab drivers, tour guides, artisans, waiters, restaurateurs, craft store owners, pharmacies and others.
The initial announcement of the 42 $ tax had unsettled the industry, as Mexico had previously exempted cruise passengers from immigration fees due to their "transit" status. According to the FCCA, several lines were considering modifying their itineraries in response to the new tax. The Mexican Senate had approved the 42 $ tax on December 3 with 79 votes in favor and 38 against. The governor of Quintana Roo, Mara Lezama, confirmed the deferral of the tax for 6 months and indicated that the decision was the result of a meeting between government authorities and representatives of the cruise and tourism industry.
In Hawaii, a tax on "time spent on board" raises legal questions
Hawaii has introduced a new tax of 11 % on transient accommodations applicable to cruise passengers for the past time to the port. The state's aim is to treat cruise passengers like hotel guests, because when a "floating resort" docks, passengers dine, shop, visit and use the local infrastructure. The state thus seeks to ensure that they pay their fair share, like someone checking into a seaside resort.
However, applying this tax to cruise ships is far from straightforward from a legal point of view. Cruise ships generally sail under foreign flags (Bahamas, Panama, Malta) and operate under international treaties, subject to federal maritime jurisdiction. This makes the question of whether a U.S. state can tax passengers for being on board a ship in its port far more complex than taxing a hotel room.
The key legal issue is whether Hawaii's new tax encroaches on territory reserved for federal regulation. Maritime law strongly favors federal preemption, which means that states generally may not impose taxes or regulations that burden interstate or international commerce, unless clearly authorized by Congresswhich is not the case here. There is a credible argument that this tax violates the U.S. Commerce and Foreign Commerce Clauses of the Constitution, which restrict states from passing laws that unduly discriminate against or burden commerce crossing state or international borders. These constitutional issues become even more complex when one considers that many cruises begin and end in foreign ports.
Hawaii's tax is not aimed at cruise lines, but at their passengers, even those who don't disembark. The law treats the time spent aboard a ship in port as the equivalent of booking a hotel room ashore. This is a new legal theory that has not been fully tested in the courts.
The maritime lawyer Peter Walsh notes that, from a political point of view, this measure is intended to close a tax revenue gap with hotels to finance sustainability efforts and manage the environmental and infrastructural impact of mass tourism. However, from a legal point of view, Hawaii may be going too far. There is no clear precedent supporting a state's right to tax foreign-flagged vessels for the mere presence of passengers on board. If upheld, this law could set a precedent for other coastal states to follow, leading to a "patchwork" of state cruise taxes that would disrupt industry operations and increase costs for travelers, contrary to the principle of uniformity in maritime law. Walsh expects the cruise industry to challenge the law in court, arguing that it is unconstitutional and interferes with federal maritime jurisdiction. The case could potentially go all the way to the U.S. Supreme Court before a clear answer emerges.
In Scotland, a consultation on the possibility of a local levy
Scottish Government considers giving local councils the power to impose a levy on cruise ships. This idea follows the adoption of the Visitor Levy Act last year, which makes it possible to tax certain overnight stays. A public consultation is currently underway to gather views on the potential benefits and problems of such a levy.
Cruise tourism is on the rise in Scotland, particularly on the islands, where it has become a major industry, creating jobs and boosting the economies of small communities. Last year, some 1,000 cruise visits to Scottish ports attracted 1.2 million passengers. In Shetland, for example, cruise passengers account for around 20 % of all visitors.
In Lerwick, Shetland's main town and port, residents are divided over the desirability of a tax to fund infrastructure investment. Many fear it would undermine the crucial business opportunities that cruises offer. Large ships can overload local infrastructure, such as restaurants, transport, public toilets and Wi-Fi. A large ship can increase the population of Lerwick (approx. 7,000 inhabitants) by 50 %. Some residents even avoid the town center on busy days.
Some, like the co-owner of a local restaurant, believe that a tax could be positive if the money was used to improve local infrastructure and could potentially deter visitors less interested in the local experience. The leader of Shetland Local Council believes it is essential to strike a balance between keeping the destination attractive for cruises and meeting the needs of the local community. The council is considering various options, including a single entry levy for all visitors to Shetland, regardless of their mode of transport or length of stay.
The British Ports Association (British Port Authority) expresses serious concerns and opposes any form of levy on cruise ships in the UK. It believes that local levies in Scotland will alarm and confuse industry planners, threaten growth and make Scotland less attractive in a highly competitive and mobile market. The Association believes that a levy should be set at a level that would most likely deter shipping, resulting in a loss to the Scottish economy with no significant gain to local finances.
Norway's tourist tax excludes cruises, for now
The Norwegian government has submitted a bill authorizing municipalities to levy a tourist tax of 3 % on paid overnight stays (hotels, campsites, Airbnb). The tax would be optional for municipalities. The aim is to give high-pressure tourist areas, such as parts of the Lofoten Islands or coastal towns like Geiranger, the means to finance infrastructure and services put under strain by increasing tourist numbers. The funds raised should be earmarked for tourism-related "common goods" such as public toilets, trail maintenance, waste collection and signage.
However, the initial project would only apply to visitors staying overnight in paying accommodationThis means that cruise passengers, day-trippers and campers using public areas for free overnight stays would not contribute. Critics argue that this excludes some of the most impactful visitors, particularly in destinations where the infrastructure for day-trippers is under pressure.
Although cruise visitors are not included in this first phase, the government has signaled its intention to explore a separate contribution from cruise tourism in the near future. Cruise ships have long been a bone of contention in the Norwegian fjords, particularly in UNESCO World Heritage areas such as Geiranger.
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