New tax could make cruises to Mexico more expensive at $42 per person
- Mexico's Congress approved a new $42 per person tax for cruise ship passengers docking at its ports.
- The tax, opposed by the cruise industry, aims to generate revenue but could make Mexican ports less competitive.
- The new levy could take effect next month, with two-thirds of the revenue going to the Mexican army.
Cruise ship passengers sailing to Mexico – home to one of the busiest ports in the world – could soon face a new tax of $42 per person, whether they disembark or not.
Last week, Mexico's Congress voted in favor of the new immigration levy for every cruise ship passenger that docks in any of the country's ports, according to The Associated Press.
Previously, cruise ship travelers had been exempt from any tourist taxes because they were considered to be 'in transit' under the longstanding Non-Migrant Rights policy, according to the Mexican Association of Shipping Agents (AMANAC).
"They slept on board the cruise ship, and some people don't even get off the ship," said James Ferrara, travel expert and president of travel agency InteleTravel.
The new tax is expected to go into effect next month, according to a press release by the Florida-Caribbean Cruise Association (FCCA).
Mexico's Caribbean coast is one of the most popular cruising destinations for Americans, with 3,300 ship calls slated for 2025. Cozumel is considered to be one of the busiest ports in the world, drawing in 2.94 million cruise passengers in 2022. In states like Quintana Roo, cruise tourism accounts for 40% of its gross domestic product, according to the FCCA.
Several industry players have voiced strong opposition to the new tax, urging Mexico's Senate not to approve the measure. They say the tax will turn tourists away to other, cheaper Caribbean cruise destinations, such as Jamaica. In a recent letter addressed to Mexico's President Claudia Sheinbaum, the FCCA called the fee "a move that would make cruise tourism in Mexico 213% more expensive than the average Caribbean port – will effectively price Mexican ports out of the cruise market."
In a statement, FCCA CEO Michele Paige said: "We were completely caught off guard with last week’s unilateral decision to eliminate the long-standing in-transit exemption and efforts to fast-track this policy change without any dialogue with the industry."
Paige also cited the fast-approaching implementation as a cause of concern. "This gives us and our partners virtually no time to prepare and creates confusion and uncertainty for our guests because the majority of our cruises have already been sold for 2025," she continued.
The loss of cruise passengers could negatively impact Mexico's tourism economy, with 20,000 jobs in Mexico related to the cruise sector, according to AMANAC. "The idea that they could risk that kind of revenue ... and all that comes with it, all of the jobs, all of the development, the support services, the people who offer car services and tours," Ferrara said. "It is transformational to the Mexican economy, so this does not make any sense."
At $42 per person, a family of four will end up dishing out $168 for the new levy, likely to be collected by the cruise lines. "In a real bargain cruise situation, it could be 10% of what you paid for your cruise," Ferrera added.
While many popular cruise destinations, such as Amsterdam, are adding fees to tackle overtourism, two-thirds of the revenue from the new tax will go to the Mexican army, not to improving port infrastructure.
"I think it's reasonable for us all – the government, the cruise lines and travel retailers like myself – to have a discussion of what can we do to protect these beautiful places that we sell," Ferrara said. "I'm hopeful there will be a better solution."
(This story was updated to correct the title and spelling of Florida-Caribbean Cruise Association CEO Michele Paige.)