Royal Caribbean International’s president has warned the Balearic government not to risk “endangering the golden goose” after the islands doubled their Sustainable Tourism Tax for holidaymakers on land and cruise ships earlier this month.
Michael Bayley said the recent increase in the levy – which charges adult cruise passengers arriving between May and October €2 – was “not really a great thing to do”, adding: “I think you’ll find that everybody [in the cruise sector] has a similar philosophy.”
“Of course there are fees and taxes related to activity, which everybody is fine with,” he explained to TTG.
“I think, though, when you start singling out either industries or sectors and start putting specific taxes on [them], you start polarising opinion and it is never such a great idea.”
The increase in the tax, which was initially introduced in 2016, means that for the first time, eligible cruise passengers are charged regardless of the length of their visit, having previously only been made to pay if they were docked for more than 12 hours.
Passengers of ships homeporting in the Balearic Islands – such as Marella Cruises’ Marella Explorer – are exempt from the charge.
“It is not really about the immediate impact. It’s more the long-term… the customer votes with their feet.”
Bayley revealed Royal Caribbean would be meeting with Clia to discuss the tax. “Hopefully we can figure something out,” he said.
“I’m reminded of the old saying ‘the goose that laid the golden egg’. Business models are built up over a long period of time and when you start changing various inputs you can endanger the goose and then nobody wins or comes out of it well.”
Balearics officials have maintained tax revenues are invested into projects to “preserve the local heritage and environment and substantially reduce the negative impact of tourism”.