Key facts
- A night on a cruise ship is taxed 40% less than a night in a hotel.
- Cruises benefit from a loophole classifying them as essential maritime infrastructure, avoiding VAT and fuel taxes.
- Transport & Environment (T&E) estimates a €15 per passenger tax per port call could generate €335 million annually in Italy, France, and Spain.
- The environmental and climate costs of cruise ships are not adequately covered by existing tax policies.
- T&E recommends a mix of tax reforms, stricter regulations on sustainable fuels, energy efficiency benchmarks, and port call caps.
A new study by the NGO Transport & Environment (T&E) highlights that cruise ships are taxed significantly less than hotels, despite their substantial environmental impact and contribution to overtourism. The analysis found that a night on a cruise ship is taxed 40% less than a comparable hotel stay, with cruise passengers paying an average of 12% in taxes compared to 23% for hotel guests.
This disparity is attributed to a loophole that classifies cruise liners as a form of maritime transport rather than holiday accommodation, allowing them to avoid value-added tax (VAT) and fuel taxes. T&E argues that this classification treats 'floating hotels' as essential infrastructure, similar to freight transport, which is inappropriate given that cruises function as destinations themselves.
T&E estimates that implementing a €15 tax per passenger per port call in Italy, France, and Spain could generate €335 million annually. These revenues could support national budgets, ecosystem protection, or green infrastructure. However, the organization stresses that tax reforms alone are insufficient.
Further recommendations from T&E include strengthening EU regulations on sustainable marine fuels, tightening energy efficiency benchmarks, and potentially capping the number of daily or annual port calls. They also advocate for aligning VAT on cruises with that of land-based tourism to fully mitigate the sector's environmental footprint.