Cruise Passengers There's a Price on Your Head

Increased Bahamas

Head Tax

Effective Oct. 1st 

"It's Better in the Bahamas" is the well-known slogan for the Government of the Bahamas.  It's also going to be more expensive for cruise ships to call there starting October 1, 2010.  When the Government of the Bahamas looked at their 2010-11 budget needs, it was clear that some additional revenue was necessary.   One of the ways they decided to meet their budgetary needs was to increase the so-called "head tax" (air and sea departure tax) from $15 to $20.   The increase for the airlines is effective July 1st and the cruise line increase is effective October 1st.

Norwegian Cruise Line (NCL) makes several calls in the Bahamas each sailing season.   NCL has notified passengers, on sailings on or after October 1st, that they will automatically add $3 per guest (age 6 and above) to all reservations that are currently not paid in full and will resend a confirmation showing the new balance due. 

In the event of cruise cancellation, this tax, like any other Government Taxes and Fees (GTF), is fully refundable. Norwegian Cruise Line is required by law to collect this from ALL guests and acts only as an agent of the Bahamian Government in collecting the tax.

In May, 2008, the Bahamian Minister of Tourism estimated that more than $22M in tourism revenue would be generated from the head tax and increased passenger spend in the Bahamas.   He said: "The Bahamas is now in a position to earn between July 2008 and December 2009 some $22 million dollars in terms of passenger spend, with Norwegian Sky generating almost 50 per cent of this amount," said Mr. Grant at a press briefing at the Lucayan Harbour.

NCL isn't the only cruise line serving the Bahamas.   When the increase was announced, Carnival Corporation, who operates three lines (Carnival Cruise Line, Holland America Line, and Princess Cruises) that call in the Bahamas, estimated that the increased tax would generate $9.2M for the government.  Since NCL is only adding $3 per guest, it appears that there was a negotiated deal between the cruise line and the Government of Bahamas since the tax was announced.

In this economy governments are looking for ways to increase their coffers and an increase in head tax is one way to achieve that goal.  This may become the new replacement for fuel surcharges we saw in recent years.  It is just another cost that is being past along to the consumer.

Elsewhere, Royal Caribbean has squared off against Rockland, Maine's City Council who recently voted to increase the head tax fee for large cruise ships from $1 per passenger to $6.  Last fall, Royal Caribbean's 2,504-passenger Jewel of the Seas called in Rockland and is scheduled to call there again this October.  

Royal Caribbean is opposed to the fee hike and made the following statement:

"We believe the 600% increase to the passenger fee is excessive and ill-timed given current economic conditions," the cruise line said in a statement. "We are also concerned by the short notice of the increase. Cruise line operators, including Royal Caribbean, plan port calls 24 months in advance and begin selling these cruises to guests 12 to 18 months in advance. We strive to mitigate costs that jeopardize any financial hardships to our guests, but an increase such as this will have a negative impact.

"We feel that the fee increase should be rescinded and tariffs reset to their previous levels," the statement concluded.

Rockland councilmen haven't taken the remarks too kindly, and aren't planning to rescind the fee at this time.  We'll continue to watch this developing story.

So you see, there is a price on your head in the Bahamas and elsewhere.  Even with these added head taxes, a cruise vacation is still a good value.   Even if you were to fly to the Bahamas, you'd still be subject to the increased fee.   I would hope that this wouldn't alter your travel plans, but be aware that there may be changes to your cruise cost to cover the mandatory fees.