Mexico Senate Approves Cruise Tax, FCCA Calls for “Urgent” Dialogue

Mexico’s Senate voted late Tuesday to approve the proposed $42 per head cruise ship passenger tax, sparking immediate concern by the country’s tourism industry, as well as the cruise industry.

The charge will go into effect in 2025. It is one of several new fees, including an increase in airport immigration charges and entry fees for the country’s nature reserves.

According to the Connecticut Post, Mexican business chambers are worried the charge will make other Caribbean ports more competitive that Mexican ports and could result in fewer cruise ships calls.  

The Florida-Caribbean Cruise Association (FCCA), which last week called on the president of Mexico to stop the tax from going ahead, issued a new statement seeking immediate and collaborative discussion with the federal government in Mexico.

“With the policy set to take effect on January 1, 2025, FCCA, its member cruise lines, and members of Mexico’s business community are advocating for urgent reconsideration of the measures to mitigate potential economic fallout for Mexico’s coastal communities and significant financial impact for cruise passengers,” the Association wrote.

If the fee goes through, cruise passengers will have to pay an additional $42 (860 Mexican pesos) per person on top of the current 408 pesos in other taxes and fees that are required to visit Mexican ports.

“The change would mean cruise tourism in Mexico would suddenly become 213% more expensive than the average Caribbean port, effectively pricing Mexican ports out of the cruise market.”

The FCCA is also unhappy that the decision was made without any consultation with or input from the cruise industry. Additionally, it leaves cruise lines no time to prepare already-booked cruisers for the added expense they will be required to pay. (Cruise lines will not be absorbing the new taxes on behalf of already-paid guests.)

More than 10 million passengers are currently expected to travel to Mexico by cruise ship in 2025.

“We appreciate President Sheinbaum’s assurance during her Wednesday news conference that the change will happen slowly and that she’s instructed federal officials to work with our industry, but we haven’t heard from anyone yet,” said FCCA CEO Michele Paige.

According to the FCCA statement, the association and its member lines “are eager to collaborate with the government to gain clarity on the details of this implementation and work together to chart a constructive path forward. However, they caution that the sudden tax, combined with a lack of prior consideration regarding the impact on cruise tourism affordability and demand, could have far-reaching consequences.”

“The unilateral decision to eliminate the in-transit tax exemption without engaging industry stakeholders undermines this partnership and puts at risk the livelihoods of tens of thousands of workers and businesses reliant on cruise tourism,” Paige said.

The FCCA emphasized its commitment to maintaining a positive and collaborative relationship with Mexico, advocating for solutions that protect both industry stakeholders and local communities. The association urges Mexican officials to engage in immediate dialogue to address the concerns of Mexico businesses and communities reliant on cruise tourism, cruise guests, cruise lines, and the broader tourism ecosystem.

The FCCA warned potential impact of the new tax policy could include:

• Reduced demand for Mexico itineraries as cruisers decide they don’t want to pay the additional tax.
• Cruise line itinerary adjustments to bypass Mexico in favor of fewer port calls, more affordable Caribbean destinations, or other high-demand regions of the world.
• Economic ripple effect as local communities, small businesses, and workers dependent on cruise tourism face significant financial losses.