Higher taxes for cruise lines recommended

Cruise
lines can and should pay more tax because they are a significant competitor for
the hotel industry, according to a hospitality consultant.

Speaking
at the Caribbean Hotel and Tourism Investment conference in San Juan, Puerto
Rico, Robert MacLellan said that more than half the world’s cruise ships
operated in the Caribbean during high season before moving to itineraries
elsewhere in the world.

“Cruise
ships today are intently focused on maximizing passenger discretionary spend –
currently estimated at around 80 percent onboard, 20 percent onshore spend –
and they operate in a virtual ‘no tax’ regime, often with government subsidised
shipbuilding costs of around US$250,000 per cabin,” noted the consultant.

Higher taxes

But
governments in the Caribbean had not been renegotiating higher port taxes, said
Mr. MacLellan, whose MacLellan & Associates is the largest hospitality-based
consultancy in the Caribbean. Higher taxes, he said, should reflect higher
environmental impact from the ships plus an added public sector investment that
was required to construct deep water berths for the ever-larger cruise ships,
such as Royal Caribbean’s 5,600 capacity Oasis of the Seas and its sister ship,
Liberty.

By
contrast, he said, the costs of building high-end hotels could reach around
$500,000 per room.

“The
hotel industry is the major tax contributor on virtually every island in the
region and, while I fully understand the financial pressures on most governments
today, some of that tax burden could be shifted to the cruise ships and would
benefit genuine long-term resort investors on-island.

“For
the foreseeable future, there is no replacement for the Caribbean archipelago
for winter cruise itineraries – that is, a range of alternative ports, offering
sufficient attractions, with spare handling capacity and within cruising range
of the lines’ principal feeder markets. The cruise lines can afford to pay more
and, with tough negotiations, they will pay more,” he said.

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3 COMMENTS

  1. Higher taxes are easy words – in a global tourism market with ships it is easy for cruise companies to build a berth in another sector of the world and sail off there. The better solution is to reduce the size of government therefore reduce the tax burden needed and reduce local taxes on hotels therefore the nightly tariff and encourage more tourists to our countries instead of others and improve the economy. The cruise sector is successful because of no tax so why not follow their act instead of making them follow our act.

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  2. This man appears to be an economic genius. His solution is to bite the hand that feeds you.

    Wake up and smell the coffee sir. Raise the price when the world economy is in the toilet. If thats a solution, i’m glad you work where you do. Lets drive away the people who make the economy what it is. Brilliant! Why didnt I think of that.

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  3. Its all a business… a numbers game. If you are going to cut into the cruise lines bottom line they won’t come here, plain and simple… but with competition in the cruise business they can’t just cut the caribbean out, someone will be willing to pay but not all.

    The outcome is a lose lose situation.

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