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The Bahamas is the latest country to join a growing bloc of Caribbean nations implementing aggressive tax reforms aimed at cruise tourism, particularly targeting private islands operated by cruise giants such as Royal Caribbean, Carnival, Disney, Norwegian, and MSC.
This movement seeks to reclaim revenue long dominated by the cruise industry’s self-contained operations.
Private Islands Under the Tax Lens
The Bahamas, which received 9.4 million cruise visitors in 2024, up 20% year-over-year, is planning to impose new taxes on goods, services, port usage, and imported materials to cruise-operated private islands. Prime Minister Philip Davis emphasized that while cruise tourism makes up over 80% of tourist arrivals, much of the economic benefit remains outside Bahamian control.
Under the new framework:
- Imports to private islands will be taxed.
- Water sports and beach activities will be limited to licensed Bahamian operators.
- Work permits for foreign cruise employees will carry additional fees.
This initiative aims to correct long-standing imbalances where luxury experiences, such as $4,000-per-day cabanas on cruise-owned islands, contribute little to surrounding communities.
A Region-Wide Rebalancing Act
Caribbean nations are increasingly unified in confronting the cruise industry’s dominance over tourism profits. Here’s how several others are implementing tax reform:
Jamaica:
A $2 per passenger levy feeds the Tourism Enhancement Fund, which supports infrastructure and environmental programs. Despite its modest size, it has generated millions for local projects.
Barbados:
Port usage fees for cruise passengers were increased to support infrastructure wear and tear from high-volume docking near Bridgetown. These funds also promote sustainable tourism.
Mexico:
After proposing a $42 tax per cruise passenger, Mexico scaled it back to $5 with plans for incremental increases. The change coincides with private developments like Royal Caribbean’s new coastal project, ensuring shared value creation.
Belize:
Environmental and development-oriented cruise fees, including park entry and sustainability levies, support Belize’s eco-tourism agenda and reduce reliance on mass cruise travel.
U.S. Virgin Islands:
A $13 composite fee per cruise visitor funds port maintenance, environmental services, and crowd management critical to infrastructure-heavy destinations like Charlotte Amalie.
Dominican Republic:
A $10 tourist card fee, embedded in most travel bookings, may soon be supplemented with cruise-specific levies under discussion by local tourism authorities.
Economic Sovereignty Through Tax Reform
The central theme uniting these countries is a call for economic sovereignty. Cruise companies have created closed-loop tourism ecosystems with private beaches, entertainment, and retail, minimizing local business engagement for years. However, governments are now asserting their rights to participate meaningfully in the revenue generated from their natural assets.
Cruise lines, meanwhile, face growing pressure to adapt to this new regulatory landscape. While the cost impact on passengers may be marginal, the revenue implications for local economies substantially fuel investments in clean water, education, environmental protection, and economic diversification.
Looking Ahead
With more Caribbean countries expected to follow, the cruise industry’s long-standing model of offshore exclusivity may end. The era of tax-free luxury on private islands is giving way to a more equitable, nation-first tourism framework.
It calls For governments; it’s a question of sustainability and fairness. It calls for cruise operators to align business practices with regional development goals.
As the balance of power shifts, so too does the future of Caribbean tourism.
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