The cruise industry is vigorously defending its tax contributions following a critical report that claims passengers on European cruises pay significantly less in tourism and other taxes than those staying in hotels. A study by the clean travel think tank Transport & Environment (T&E) estimates that a night on a cruise ship is taxed at 40 per cent less than an equivalent hotel stay, failing to account for environmental costs and the industry's contribution to overtourism in popular destinations.
According to T&E's analysis, which compared €100-a-night hotels in France, Italy, and Spain with similarly priced cruises, hotel guests typically pay 23 per cent of their nightly rate in taxes, while cruise passengers pay only 12 per cent. The report also points out that cruise ships benefit from tax exemptions traditionally granted to commercial cargo fleets, including reliefs on corporate income tax, VAT, and marine fuel taxes. T&E suggests that air pollution and greenhouse gas emissions from cruise ships in the Western Mediterranean alone cost local communities between €557 million and €930 million in 2025 due to impacts on climate, public health, and coastal ecosystems.
In response to these findings, T&E is advocating for a new levy of €15 per passenger per port call. This proposed tax, they estimate, could generate €335 million annually across Italy, France, and Spain. These funds, T&E suggests, could be directed towards national budgets, earmarked for protecting coastal ecosystems, or invested in green infrastructure such as onshore power supply at ports. Fanny Pointet, shipping manager at T&E, argued that 'floating hotels' are being treated like essential maritime infrastructure despite cruises being a destination in themselves, not merely a mode of transport.
The Cruise Lines International Association (CLIA), the industry's leading trade body, has strongly refuted T&E's claims. A CLIA spokesperson stated that assessing the cruise sector through a selective tax comparison with hotels is inaccurate, as it fails to consider the industry's comprehensive regulatory framework, operational complexities, environmental commitments, and broader economic impact. CLIA highlighted that cruise lines already pay substantial port dues, passenger charges, and other local fees that support port operations, infrastructure, and local services, alongside meeting wider tax and regulatory obligations as ocean-going transportation.
Furthermore, CLIA emphasised the significant economic benefits generated by the cruise sector. The organisation pointed out that the industry supports a vast value chain, extending beyond the ships themselves to include shipbuilding, ports, maritime services, local suppliers, tour operators, hospitality businesses, and transport providers globally. In the UK alone, CLIA states that the cruise industry supports over 69,000 jobs, delivering substantial economic advantages to the numerous destinations it serves.