FCCA Warns Proposed Cruise Tax Could Devastate Mexico’s Tourism Industry

MIRAMAR, Florida (November 27, 2024) – The Florida-Caribbean Cruise Association (FCCA) has voiced serious concerns regarding the Government of Mexico’s plans to impose a substantial new tax on cruise passengers, warning of potentially devastating consequences for Mexico’s tourism industry.

In a letter addressed to Mexico’s President, Dr. Claudia Sheinbaum, and signed by leading cruise ship executives, FCCA CEO Michele Paige cited the legislative plans to introduce a US$42 per-person tax – 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.

“The Government’s plan to eliminate the ‘in-transit’ exemption status that has been in place for cruise passengers for over a decade impacts the livelihoods of tens of thousands of Mexican citizens, countless small businesses, and communities along Mexico’s coastlines that depend on cruise tourism,” Paige cautioned. “The change will be particularly damaging to states like Quintana Roo where cruise tourism represents 40% of GDP,” Paige cautioned.

?Highlighting the long-standing mutually beneficial relationship between Mexico and the cruise industry, Paige expressed disappointment and concern over the lack of consultation with cruise lines. She warned that cruise lines are already anticipating significant reduced consumer demand for more expensive Mexico itineraries, which would result in itinerary changes that would reduce the 10 million-plus passengers and 3,300 cruise ship calls expected to visit Mexico in 2025. Fewer cruise tourists would shrink the substantial contributions cruise tourism makes to Mexico’s economy, including approximately US$1 billion (over 20 billion Mexican pesos) in direct spending, over 20,000 jobs, and more than US$200 million (over 4 billion Mexican pesos) in wages annually. 

“This proposed tax could also jeopardize cruise industry investments in the country – including billions in planned development and other projects – meant to help rebuild Acapulco, cultivate new Mexican tourist destinations, employ more Mexican seafarers, and provide social programs to help underserved communities in Mexico. Cruise lines will inevitably reevaluate the viability of these investments considering the potential loss of consumer demand for Mexico cruises driven by the unprecedented tax increase on cruise tourism,” Paige added.

Paige emphasized the industry’s commitment to fostering strong relationships with local communities, governments, and business partners. She advocated for “joint, collaborative, and direct dialogue” to maintain a mutually beneficial approach that promotes shared growth, employment opportunities, and sustainable economic and social programs.

“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. We are also concerned with the last-minute notification and implementation of this new policy expected to take effect in approximately one month. 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,” Paige stated.

Passenger fares accounted for US$62.6 million in port fees paid during the 2023/2024 cruise year, inclusive of immigration services which are working well. The additional per-person proposed tax, combined with existing taxes and fees, is a cost that cannot be easily absorbed by most cruise guests.

About the FCCA