Royal Caribbean, other cruise lines face private island crackdown
As cruise line profits continue to grow at Royal Caribbean’s CocoCay and other private destinations, one vital partner wants a bigger cut.
In 2019, Royal Caribbean invested $250 million to turn its private island in The Bahamas, Perfect Day at CocoCay, into a next-level cruise destination featuring record-breaking attractions, one-of-a-kind experiences, and all the amenities vacationers could want in a beach day.
That move proved to be a brilliant business strategy that’s driven huge revenue gains for the cruise giant, and fueled other cruise lines’ Bahamian destination development projects, too.
Related: Royal Caribbean unveils its biggest and boldest innovation yet
In July, Carnival Cruise Line will open its own exclusive destination on Grand Bahama, Celebration Key — a $600 million investment. And Carnival isn’t the only cruise line following Royal Caribbean’s lead.
Disney Cruise Line now has not one, but two exclusive Bahamian destinations. Norwegian Cruise Line is in the middle of a major project to upgrade and enhance cruising’s original private island in The Bahamas, Great Stirrup Cay.
And most recently, MSC Cruises revealed a new project to expand its Bahamian private island footprint, turning a natural sandbank into a new luxury cruise destination.
Although the Bahamian government has been a key partner in all of these projects, its leaders are now recognizing that the returns their country and its people are seeing as cruise visitor numbers to The Bahamas climb are minimal compared to the profits Royal Caribbean and other cruise lines make.
Now, Bahamian leaders are seeking to change that through a new tax compliance crackdown designed to promote fairness and equity in tourism.
Doug Parker shared more details on The Bahamas’ private island tax crackdown, and other cruise news including a significant change in Jamaica’s travel advisory, on the June 3rd edition of Cruise News Today.
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The Bahamas to enforce stricter tax rules for cruise line private destinations
Transcript:
This is Cruise News Today with Doug Parker.
Good morning, here's your cruise news for Tuesday, June 3rd.
The Bahamas is tightening tax rules for cruise line private islands and destinations.
Yeah, Prime Minister Philip Davis says cruise passengers now make up 83% of all visitors, but the tax revenue hasn't quite kept up.
The new budget proposes collecting VAT on imports, guest services, and cruise line offerings like $4,000 cabanas. Talks with cruise lines are ongoing to reach what Davis calls fair and sustainable terms.
Now, The Bahamas already collects VAT on purchases at private destinations and islands, but this move would expand that reach.
Related: Cruise industry files lawsuit against popular Royal Caribbean port
U.S. State Department relaxes Jamaica travel warning
And the U.S. State Department has lowered its travel advisory for Jamaica from Level 3 to Level 2. That signals improved safety conditions. The move follows a March visit by Secretary of State Marco Rubio, who met with Jamaican leaders to discuss public safety.
Officials report an 18% drop in major crimes near cruise ports. However, violent crime remains high in some areas, which is prompting ongoing caution. Cruise passengers are advised to avoid remote areas, nighttime travel, and public transportation.
Over 1.4 million cruise passengers visited Jamaica last year without a major incident, generating nearly $200 million in revenue. Major cruise ports in Jamaica are Falmouth, Ocho Rios, and Montego Bay.
Related: US changes travel threat level for controversial Caribbean port
Cunard adds new room service fees
And Cunard Line is adding room service charges for its Britannia-grade staterooms across its four-ship fleet. Starting soon, guests will pay for room service items ordered after 10 a.m., though breakfast will remain free before that time.
Dining in buffets and main restaurants will still be included in the fare. Higher-tier Princess and Queens Grill suites are not impacted by this change.
And cruise stocks were up on Monday. Carnival Corporation: up 1.4%, 23.52. Royal Caribbean: up 2%, 261.91. Norwegian: flat, 17.65, and Viking: up 2%, 45.59.
If you have a lead on a story, let us know. Tips@cruiseradio.net.
Have yourself a great Tuesday.
I'm Doug Parker with Cruise News Today.
