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Caribbean L 12 ife, July 12–18, 2019 BQ
Rebalancing tourism taxes
Continued from Page 10
fuel oil and the minimal spend ashore
of today’s cruise ship passengers. The
mega ships now have multiple shops,
casinos, restaurants and bars offering
all inclusive packages that totally
distract passengers from spending
ashore. In the last twenty years ships’
commissions on shore excursions have
risen from 10 percent to 50 percent,
discouraging passengers from going
ashore at all and squeezing any possible
profit margin for local tour operators.
Today, over 80 percent of a cruise ship
passenger’s DISCRETIONARY spend is
on board.
Most cruise ships enjoy a double
high season — Caribbean for less than
six months and the balance of the
year in Alaska or the Mediterranean —
operating virtually free of corporation
taxes and with very low wage bills. The
largest ships cost less than US$300,000
per cabin to build, while new hotel
rooms in the Caribbean cost double
that figure per room to develop and
have only one high season. The cruise
ship’s highly competitive business
model and the further recent growth
of cruise tourism in the region might
be viewed as a direct disincentive for
resort investment and re-investment in
the Caribbean.
The total number of cruise ship
passengers was over 27 million worldwide
97% employed or pursuing further education
within 6 months of graduation
in 2018, up nearly 10 percent
from two years earlier. In the next
10 years, 106 new ships are expected
to enter service and, currently, over
50 percent of the world’s cruise fleet
is based in the Caribbean for the
Winter. The hugely profitable cruise
industry can afford to absorb higher
port taxes in the Caribbean and will
do so, once faced with a stronger
negotiating entity.
Do not believe any cruise line threats
that they can pull out of the region all
together. The Caribbean is the only
archipelago with natural beauty and
sophisticated tourism infrastructure,
located directly between the established
feeder cruise markets of North America
and Europe and the growth feeder
market of South America.
Is it not now abundantly clear that, at
the very least, there is an absolute logic
to rebalance the tax burden between
the Caribbean’s stay-over visitor and
the cruise ship passenger?
Note: MacLellan & Associates is the
largest hospitality consultancy based
in the Caribbean. Robert MacLellan
is a veteran of the hotel and resort
industry. In his early career, he was
an onboard hotel officer with a major
cruise line and, later, a Vice President
of an explorer cruise line.
For further information: Contact
robert@maclellancaribbean.com Tel
(1) 242 602 1577.
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