Iceland has increased its fee for cruise ships in port by five time.
Many ships have already cancelled their Iceland stops.
It’s estimated that certain ships would have to pay an extra $3 million or more throughout a cruise season.
The latest destination to see its cruise industry kneecapped by new regulations and restrictions appears to be Iceland. Since the recent introduction of an USD$18 fee per passenger for cruise ships, sailings have been getting cancelled and industry voices expressing their frustration.
More than 10 ships have cancelled their Iceland stops since the government imposed the new fee at the start of this year.
The new fee is five times what cruise lines had to pay before and the country is now scheduled to see about 80 less cruise calls than last year.
Sigurður Jökull Ólafsson, chairman of Cruise Iceland says the fee was introduced without giving a chance for cruise lines to prepare and schedule accordingly.
“We would have, first of all, wanted to see this implemented in stages so it wouldn’t hit operations as hard as it does now.
“It’s reasonable for this industry to contribute. But it must be implemented with adequate notice.”
A key aspect of the new fee to note is that it is a daily fee per-port, not a one-time entry fee. This means that if a cruise ship has multiple ports in Iceland planned, they’ll have to pay USD$18 per passenger, per port. While on the surface this might not sound like too much, it adds up fast.
Consider a ship such as Celebrity Silhouette, it has a seven-night Iceland cruise that has six days in Iceland ports. The ship has a capacity of 2886 passengers.
If we assume it to be full for a sailing, this means that USD$18 has to be paid for every single passenger, six times. That comes out to USD$311.688 or around AUD$500,000.
The ship will sail this route six times in the upcoming season, meaning this fee has just bitten $3 million out of the cruise lines profits.
For an industry that sometimes operates on very tight margins, this is a huge amount and if the fee stays, it’s sure to have a significant impact on the amount of cruise we see in the region.
While big European cities such as Amsterdam, Barcelona and Rome steal most of the headlines as far countering cruise visitors goes, Scandinavia has also been quietly putting up its guard.
The future of cruising in the Norwegian Fjords is up in the air as well. From next season the government in Norway will begin rolling out strict environmental restrictions for ships that enter the region. A complete ban on fuel-powered ships is expected by 2032, and as soon as 2026 only ships using liquefied natural gas will be able to enter.
Costa Maya is set as the destination for Royal Caribbeans big private investment.
Is Mexico next?
Mexico has moved to place a USD$42 cruise tax on cruise passengers entering the country.
The decision has already been pushed back after being met with criticism from major cruise lines and the industry in Mexico.
Mexico is a hugely popular cruise destination for Caribbean itineraries out of the USA, meaning if the fee sticks, this will place a significant barrier in the plans of many major cruise lines.
Some have even suggested, that Royal Caribbean could reconsider its significant investments in Mexico, where it’s planning to build a second ‘Perfect Day’ private destination experience.
With cruise resistance spreading far beyond just Europe’s big cities, taxes and cruise caps look to be shaping at the industry’s biggest challenge moving forward.