A $42 cruise passenger tax approved by Mexico's Congress last week could result in reduced demand for Mexico itineraries and damage the country's tourism economy, the Florida-Caribbean Cruise Association (FCCA) said in a letter to Mexico's president.
Signed by cruise line executives, the letter to President Claudia Sheinbaum said the tax would make cruise tourism in Mexico 213% more expensive than the average Caribbean port, effectively pricing Mexico "out of the cruise market," wrote FCCA CEO Michele Paige.
Michele Paige
Signatories include Royal Caribbean International CEO Michael Bayley, Carnival Corp. CEO Josh Weinstein, Norwegian Cruise Line Holdings CEO Harry Sommer and MSC Cruises North America chairman Richard Sasso.
The tax would eliminate a tourist tax exemption that has been in place for cruise lines for more than a decade. The FCCA said that Mexico cruise ports collected $62.6 million in port fees during the 2023-24 cruise year, and that a $42 head tax "is a cost that cannot be easily absorbed by most cruise guests."
Paige warned that the tax would make Mexico itineraries more expensive and thus reduce demand for port calls there. In 2025, Mexican cruise ports are expected to draw more than 10 million passengers and some 3,300 cruise ship calls, the FCCA said.
Paige said the tax would be "particularly damaging" to Quintana Roo, the Mexican state that is home to the Cozumel and Costa Maya ports. Cruise tourism represents 40% of GDP in Quintana Roo, the FCCA claimed.
Overall, the FCCA said, cruise tourism contributes approximately $1 billion in direct spending to Mexico's economy, supporting more than 20,000 jobs and more than $200 million 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," Paige said. "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 expressed disappointment over the lack of consultation with cruise lines, saying there has been a "longstanding mutually beneficial relationship between Mexico and the cruise industry."
"We were completely caught off guard with last week's unilateral decision to eliminate the longstanding exemption and efforts to fast-track this policy change without any dialogue with the industry," Paige said. "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."