Cruise Passengers to Face New Tourism Taxes in Mexico
Starting this week, cruise passengers docking in Mexico will be subject to new tourism taxes. Officials have expressed frustration with major cruise lines like Royal Caribbean for not contributing fairly to local economies.
Royal Caribbean and other cruise operators are promising to challenge this move, implying they may steer customers away from local businesses in response.
Beginning Tuesday, each passenger will incur a $5 fee if their ship stops at Mexican ports. This amount is set to rise to $21 over the next three years if ships continue to dock there, tacked onto the overall cruise cost.
This new tax was negotiated down from an initial proposal of $42 set by the Mexican government.
According to the Caribbean Cruise Association, this new tax will stack on average with existing port fees, which are about $28.85 per passenger in Cozumel alone.
Roughly 3,300 cruise ships are expected to visit Mexican ports this year, bringing in around 10 million passengers, notes the FCCA.
Some airlines have already incorporated a Mexican tourism tax into the price of flight tickets.
“The Mexican government sees it this way: You bring economic benefits, but you need to pay a fair share, similar to what other travelers pay when arriving by plane,” stated Ruben Ormos Rodriguez from the tax association and head of the advisory firm Global Nexus.
However, local business owners are worried this tax might deter tourists from choosing cruises that include stops in Mexico.
“We, as business owners, are quite anxious; Cozumel relies heavily on cruise tourism,” remarked Carmen Joaquin, duty-free shop owner and president of Cozumel’s Business Coordination Council.
This tax has escalated tensions between the Mexican government and Royal Caribbean, especially as the company plans to develop a sizable private resort in Mahafal, a coastal village in Mexico.
Royal Caribbean did not respond to requests for comments.
Cruise lines have been at odds with local authorities recently, as the government encourages hiring of Mexican workers and use of local products in their supply chains.
Royal Caribbean anticipates significant revenue from its new resort, which is set to feature an extensive lazy river and various attractions, projected to accommodate 15,000 guests daily upon opening in 2027.
Local business owners in Mahafal are concerned that such resorts will divert cruise travelers’ spending away from their shops.
“It feels like they want to keep all the profits for themselves,” said Amelie Gautier, a local restaurant owner.
Royal Caribbean is estimated to spend around $292 million on land acquisition for the resort, which will also create thousands of jobs in the area.
Analysts suggest that while the new passenger tax might impact Royal Caribbean’s profits, the resort could generate over $125 million annually before accounting for expenses.
Mexican President Claudia Sheinbaum views the taxes as a means to reduce the country’s fiscal deficit without cutting vital social programs.
Yet, reports indicate that the relationship between the cruise industry and local Mexican officials is deteriorating.
FCCA CEO Michele Page mentioned that both parties are “trying to mend our relationship.” The trade group is calling for discussions between cruise line leadership and Sheinbaum.
