Black Meetings & Tourism - FCCA CALLS FOR URGENT DIALOGUE AMID CONCERNS OVER MEXICO’S NEW CRUISE TAX

Industry Briefs
FCCA CALLS FOR URGENT DIALOGUE AMID CONCERNS OVER MEXICO’S NEW CRUISE TAX
The Florida-Caribbean Cruise Association (FCCA) is seeking immediate and collaborative discussions with the federal government in Mexico following the passage of a Federal Law of Rights that includes a significant new tax on cruise passengers. With the policy set to take effect on January 1, 2025, FCCA, its member cruise lines, and members of Mexico's business community are advocating for urgent reconsideration of the measures to mitigate potential economic fallout for Mexico's coastal communities and significant financial impact for cruise passengers. Under the new policy, cruise passengers will face an additional US$42 (860 Mexican pesos) per person in taxes on top of the current average of $20 (408 Mexican pesos) in other taxes and fees required to visit Mexican ports. The change would mean cruise tourism in Mexico would suddenly become 213% more expensive than the average Caribbean port, effectively pricing Mexican ports out of the cruise market. The abrupt decision was made without consultation or input from the cruise industry and leaves cruise lines no time to prepare guests for the added expense as the majority of 2025 sailings are already booked. If implemented suddenly, this change could disrupt the travel plans of over 10 million passengers expected to visit Mexico in 2025, threatening significant economic contributions that sustain local businesses, employment opportunities, and community livelihoods. "We appreciate President Sheinbaum's assurance during her Wednesday news conference that the change will happen slowly and that she's instructed federal officials to work with our industry, but we haven't heard from anyone yet," said FCCA CEO Michele Paige. The FCCA and its member lines are eager to collaborate with the government to gain clarity on the details of this implementation and work together to chart a constructive path forward. However, they caution that the sudden tax, combined with a lack of prior consideration regarding the impact on cruise tourism affordability and demand, could have far-reaching consequences. "Mexico has long been a cornerstone of the cruise market, with a deeply entrenched relationship that has delivered significant economic benefits to both the industry and local communities," said Paige. "However, the unilateral decision to eliminate the in-transit tax exemption without engaging industry stakeholders undermines this partnership and puts at risk the livelihoods of tens of thousands of workers and businesses reliant on cruise tourism." Key Economic Contributions of Cruise Tourism in Mexico · Generates over US$1 billion (20 billion Mexican pesos) in direct spending annually. · Supports more than 20,000 jobs across various sectors. · Contributes US$200 million (4 billion Mexican pesos) in wages. Potential Impacts of the New Tax Policy · Reduced demand for Mexico itineraries: Fewer visitors willing to bear the additional expense of travel to Mexico and diminished revenues for local businesses. · Shift in cruise itineraries: Cruise line itinerary adjustments bypassing Mexico entirely in favor of fewer port calls, more affordable destinations in the Caribbean and/or other higher-demand regions of the world. · Economic ripple effects: Local communities, small businesses, and workers dependent on cruise tourism facing significant financial losses. FCCA emphasized its commitment to maintaining a positive and collaborative relationship with Mexico, advocating for solutions that protect both industry stakeholders and local communities. The association urges Mexican officials to engage in immediate dialogue to address the concerns of Mexico businesses and communities reliant on cruise tourism, cruise guests, cruise lines, and the broader tourism ecosystem. "Joint efforts between the government and the cruise industry are essential to creating sustainable growth that benefits all parties," Paige added. "We are hopeful we can work together to find solutions that preserve Mexico's vital role in the cruise market while ensuring economic stability for the communities that depend on it." About Florida-Caribbean Cruise Association (FCCA) Created in 1972, FCCA is a not-for-profit trade organization that represents the mutual interests of the cruise industry and destinations' private and public sectors. By building bilateral relationships with cruise tourism stakeholders and providing them a forum to work with executives from its Member Lines, FCCA fosters bilateral success for all parties. For more information, visit F-CCA.com and @FCCAupdates on Facebook, Instagram, LinkedIn and X.

Industry Briefs

FCCA CALLS FOR URGENT DIALOGUE AMID CONCERNS OVER MEXICO’S NEW CRUISE TAX

The Florida-Caribbean Cruise Association (FCCA) is seeking immediate and collaborative discussions with the federal government in Mexico following the passage of a Federal Law of Rights that includes a significant new tax on cruise passengers. With the policy set to take effect on January 1, 2025, FCCA, its member cruise lines, and members of Mexico's business community are advocating for urgent reconsideration of the measures to mitigate potential economic fallout for Mexico's coastal communities and significant financial impact for cruise passengers.

Under the new policy, cruise passengers will face an additional US$42 (860 Mexican pesos) per person in taxes on top of the current average of $20 (408 Mexican pesos) in other taxes and fees required to visit Mexican ports. The change would mean cruise tourism in Mexico would suddenly become 213% more expensive than the average Caribbean port, effectively pricing Mexican ports out of the cruise market.

The abrupt decision was made without consultation or input from the cruise industry and leaves cruise lines no time to prepare guests for the added expense as the majority of 2025 sailings are already booked. If implemented suddenly, this change could disrupt the travel plans of over 10 million passengers expected to visit Mexico in 2025, threatening significant economic contributions that sustain local businesses, employment opportunities, and community livelihoods.

"We appreciate President Sheinbaum's assurance during her Wednesday news conference that the change will happen slowly and that she's instructed federal officials to work with our industry, but we haven't heard from anyone yet," said FCCA CEO Michele Paige.

The FCCA and its member lines are eager to collaborate with the government to gain clarity on the details of this implementation and work together to chart a constructive path forward. However, they caution that the sudden tax, combined with a lack of prior consideration regarding the impact on cruise tourism affordability and demand, could have far-reaching consequences.

"Mexico has long been a cornerstone of the cruise market, with a deeply entrenched relationship that has delivered significant economic benefits to both the industry and local communities," said Paige. "However, the unilateral decision to eliminate the in-transit tax exemption without engaging industry stakeholders undermines this partnership and puts at risk the livelihoods of tens of thousands of workers and businesses reliant on cruise tourism."

Key Economic Contributions of Cruise Tourism in Mexico

· Generates over US$1 billion (20 billion Mexican pesos) in direct spending annually.

· Supports more than 20,000 jobs across various sectors.

· Contributes US$200 million (4 billion Mexican pesos) in wages.

Potential Impacts of the New Tax Policy

· Reduced demand for Mexico itineraries: Fewer visitors willing to bear the additional expense of travel to Mexico and diminished revenues for local businesses.

· Shift in cruise itineraries: Cruise line itinerary adjustments bypassing Mexico entirely in favor of fewer port calls, more affordable destinations in the Caribbean and/or other higher-demand regions of the world.

· Economic ripple effects: Local communities, small businesses, and workers dependent on cruise tourism facing significant financial losses.

FCCA emphasized its commitment to maintaining a positive and collaborative relationship with Mexico, advocating for solutions that protect both industry stakeholders and local communities. The association urges Mexican officials to engage in immediate dialogue to address the concerns of Mexico businesses and communities reliant on cruise tourism, cruise guests, cruise lines, and the broader tourism ecosystem.

"Joint efforts between the government and the cruise industry are essential to creating sustainable growth that benefits all parties," Paige added. "We are hopeful we can work together to find solutions that preserve Mexico's vital role in the cruise market while ensuring economic stability for the communities that depend on it."

About Florida-Caribbean Cruise Association (FCCA)

Created in 1972, FCCA is a not-for-profit trade organization that represents the mutual interests of the cruise industry and destinations' private and public sectors. By building bilateral relationships with cruise tourism stakeholders and providing them a forum to work with executives from its Member Lines, FCCA fosters bilateral success for all parties. For more information, visit F-CCA.com and @FCCAupdates on Facebook, Instagram, LinkedIn and X.