Should cruise lines pass taxes on to customers?

[melissa@cruisecritic]

Alaskans voted in a $50 per-cruiser tax last summer -- and now Tahiti is increasing the per-cabin tax for ships sailing less than three months a year in Polynesian waters, with itineraries that include at least two calls in Tahiti (read more in Cruise Critic News: http://www.cruisecritic.com/news/news.cfm?ID=1911).

Do you think it is fair for cruise lines to pass cruise ship taxes down to the customers? Be sure to post your opinion!

[NAS-KARR]

Melissa......if you owned a business you'd pass down every cost to your customers and if you didn't you'd be in business a very, very short time. RIGHT ?????


CIAO,

[Spikesgirl]

That's part of doing business. The cruiseliens are in it to make a profit and that means that the customer will pick up the tab. We have quite a problem going on here in California because the miniumum wage has been raised and the Governator wants everyone insured - guess who's going to foot those bills.

Do I like it - not really, but I accept it was a necessary part of commercialism.

Charlie

[lhbsurf]

I can't imagine they'd be in business very long if they weren't able to pass expenses along to customers.....I don't think the poll even makes sense.

[paul929207]

Much as I would like the cruise lines to eat the extra taxes, all businesses pass along to their customers increases in costs, and this includes taxes.

Paul

[hbarkan]

Alaska and Tahiti profit greatly by encouraging tourism -especially cruise visitors. It seems short sighted to do anything that hinders the growth of cruise arrivals. Why kill the goose that lays golden eggs?

The cruise lines certainly are entitled to regain their additional cost if competition and value to passengers allow them to increase prices.

[leoandhugh]

you ask the question do we think it is fair? of course it is fair; no business would stay in business if it did not pass along to the consumer all the increases in overhead expenses. and the cruise line business is very competitive.
In the case of French Polynesia, there is a lot of local politics involved here. within the last year, "paul gaughin" threatened to pull out completely; by tying this tax to penalize cruise lines spending less than the specified months, the gaughin is almost guaranteed a monopoly in the area unless the other cruise lines pay the tax and pass it along.

[fllady]

Their costs go up, so it is only fair to say that our cost will go up. mpo: I think Alaska is worth the extra $50. its our favorite cruise.

[ArizonaRalphie]

That's the thing with taxes. They ALWAYS trickle down to the end user.

[Ojaian]

Its inevitable that all taxes like most other costs get past along, but I don`t like it.

[swakop]

I think the increase is not even worth mentioning it. Now in the case of the ridiculous Alaska increase, I think the customers will decide when it is not worth it to visit the destination any more. Until then, keep raising the fees....good luck...it will eventually backfire in some form or other. The cruise line should always pass on the increase in fees. After all the "culprit" is the destination that "wants" us cruisers. Some destinations are worth it.

[swakop]

Dear Melissa,

Do you know of any ports/cruise destinations that actually pay cruise ships/lines to visit ? Would be interesting to know.

[njdave]

Cruiselines have to pass tax increases on to us. However, it is up to us to say no. We have cancelled our plans to go to Alaska this year. we were there two years afo and it was clear that most of the port towns would not exist except for cruise passengers-they consist primarily of t-shirt and sweatshirt souvenir shops and bars. This tax is simply an example of Alaskan greed since their incredibly per capita oul dole is drying up. we had no plans for Tahiti and will keep it that way.

[Cuizer2]

If a business' costs increase, then those costs are passed on to the customer in one way or another. So, is it fair for the cruise lines to pass the additional taxes on to their customers? Of course it is. If the costs go up too much, then the cruise line will not be able to fill its ship, and then the cruise line will move the ship to another area. The customers can control this by voting with their wallets. If less passengers or even less ships start showing up in Alaskan and Tahitian waters, and the head tax fails to make up for the lost revenue that is also taxed, then then Alaska and Tahiti will have to decide which is more important.

Of course what is going to happen is that the cruise ship passengers will grumble a bit, but soon all will be forgotten and full ships will again be found in Alaskan and Tahitian waters. It is just like rising gas prices. Everybody grumbles for a while, then all is forgotten. I don't see any more smaller vehicles, or any less bigger vehicles, or any more car pools now then when gas was $1.00 less per gallon.

[DarkNStormy720]

I bet this stems from what Alaska did to the cruise community last year. I said in my last post when Alaska was trying to pass the tax "Whats to stop every other port from raising the taxes and so forth". Next its gonna hit the Caribbean and Florida wait and see.

[FranKes2000]

The cruise lines have to pass on the taxes but the tourists may tighten their belts and spend that much less money in port. The ports may end up being the losers.

Originally Posted by lhbsurf

I can't imagine they'd be in business very long if they weren't able to pass expenses along to customers.....I don't think the poll even makes sense.

I agree. I would much rather know as many details of charges as possible so I can evaluate what is a good deal or not.

taxes are always paid by the consumer- I just do not think it is fair, the Alaska tax was passed last August, they knew about it, and after I booked a cruise in November, I have a written confirmation price- they now say it will be 50.00 more per person in a email confirmation? The agent is blaming his boss, the boss is blaming NCL, and NCL has not responded? Maybe Seattle can balance its budget by adding another tax on cruise ships?

[AlanFromFL]

Is it "fair"? Idunno, what's the definition of "fair"? It all depends on whose ox is getting gored.

Municipalities all over this country stick it to visitors (NOT residents), in the form of very high occupancy taxes on hotels, taxes on rental cars, etc. in order to fund such projects as new stadiums & convention centers, or simply to raise additional revenue without "appearing" to raise taxes on the locals. Those of us who benefit from such arrangements in our own home towns shouldn't be terribly surprised when the other guy decides to play by the same rules.

[TCF]

One has to wonder whether the politicians and their mandarins take the time to really think about the impact their tax increase is going to have beyond what will get dumped in the tax coffers?

In Alaska they added $50 a head to the cost of the cruise...because of course the cruise lines have to pass on the increased tax cost to its customers. How often is that extra $100 increase the 'deal breaker' for a couple planning a cruise to Alaska? A ship load a year? Half a ship load a year?

The same applies to Tahiti.

Some of these places should take a long hard look at a place like Cozumel. In the week of Dec.6 - 10, 2006 an esitmated 27 cruise ships dropped 80,000 passengers on that little island and those 80,000 people sailed away leaving an estimated $4.5 million USD on the island !!!! You can bet that the state and Mexican federal government got a big chunk of that through local taxes and the passengers never knew they were paying it out!

Now, for sure those weren't the kind of numbers Cozumel was looking at the first...or even the fifth...year the cruise ships started coming...but that's the number they're looking at every year now!

It is not the number of cruise ships coming...it is the numbers of passengers coming....and finally...and perhaps most importantly it is giving the people coming something good to spend their money on when they get off the ship!! That's where the money is, not some tax that reduces the disposable income of every passenger....money they aren't spending on trinkets and t-shirts and the taxes applied to the goods they purchase!

Figuring out how much these taxes really COST the tourism based economy would make an interesting thesis for an economics or public administration student.

Just my thoughts.

Sorry...kind of got off topic here.

Tom