New Zealand’s government has slapped an eye-watering 88% increase on cruise passengers for “customs border processing” at a time when the country is suffering a 22% drop in passenger numbers.
The extraordinary move comes as the region is desperately trying to persuade US-based cruise lines to step up ship visitation. Cruise Passenger first revealed a 30% drop in cruise berths thanks to high costs and strict regulations.
New Zealand has already placed special bio-security regulations on cruise ships, meaning they have to keep cleaning their hulls to remove the merest suggestion of a barnacle. Thousands had their holidays ruined as ships were turned away, even after deploying divers to scrub their hulls clean.
Now, the new tax means cruise lines will be faced with new high costs. And just to add to the burden, the new charges, which will add $2 million to cruise line costs, will be imposed in December.
That means the lines can’t recoup the costs from passengers who have already paid for their itineraries.
The New Zealand Cruise Association (NZCA) is opening discussions with the government to urge them not to proceed with a proposed increase in customs border processing for cruise passengers. The NZCA has made it clear this increase would have disastrous consequences for cruise.
The increase is currently set to come into effect on December 1, 2024. The NZCA says this is coming at a time that is already extremely difficult for cruises in New Zealand.
“These changes, scheduled to take effect on 1 December 2024, come at a critical time for the cruise industry, which is already grappling with a 22% reduction in passenger numbers for the 2024/2025 season due to rising operational costs in New Zealand, including Maritime NZ fees, port costs, proposed IVL increases.”
The Association is worried about how this could affect cruise lines and their relationship with sailing to New Zealand, because cruise lines have already scheduled their season and sold their cruises. This means the increase in costs can’t be passed on to passengers.
“The proposed 88% increase from 1 December 2024 will substantially impact the cruise sector as sales for the 2024/2025 season have already been finalised, and these costs cannot be passed onto passengers.
“It threatens to cost cruise lines visiting New Zealand an additional unbudgeted $2 million for the 2024/2025 season.”
Cruise Lines International Association Australasia (CLIA) told Cruise Passenger tonight:
“A proposed 88% increase in border processing fees for cruise passengers in New Zealand threatens to cause serious harm to the local tourism industry at a time when New Zealand is already suffering the impact of reduced cruise ship deployment.
“CLIA has warned that New Zealand is one of the most expensive countries in the world for cruise operations, which negatively impacts the deployment of cruise ships to the region. The New Zealand Cruise Association (NZCA) calculates that New Zealand faces a 22% reduction in cruise visitors during the 2024/25 season, even before the proposed fee increase.
“The cruise industry is advocating for a more constructive process in New Zealand, where the economic potential of cruise tourism is supported by a whole-of-government approach to fees and regulation, with a cohesive national cruise tourism strategy.
“CLIA and the NZCA will be making submissions to the New Zealand Customs Service and New Zealand Government as part of their consultation process.
“The rises are coming at a time when Australia is already bleeding cruise capacity, as cruise lines and ships are being put out of the region due to high costs. The act of New Zealand customs making it excessively more expensive to cruise to New Zealand will only serve to add to these issues, and further damage the profitability for cruise ships looking to homeport out of Australia.”
New Zealand’s fjords are a vital attraction for international visitors – according to the New Zealand government’s website 25 international cruise lines sail in New Zealand waters.
New Zealand rises are for cruise passengers only
The processing cost for travellers arriving by cruise ship will increase from $11.48 to $21.54, an increase of $10.06 per passenger. This represents an extra $30,000 in costs for a ship of 3000 passengers.
However, the levy for air travellers will be decreasing, from $16.59 to $14.17.
Furthermore, the Association didn’t hold back in its statement of why it believes this increase is coming into play, believing it is due to internal mismanagement from NZ Customs.
“NZ Customs’ lack of clear communication on cost justifications and deficit specifics raises concerns.
“NZ Customs appears to be attempting to recoup losses due to an error in their projections
“The increase will exacerbate declines in port calls and passenger numbers, negatively impacting regional tourism and local economies.”
NZ has already been at odds with cruise
New Zealand has already been proving a difficult destination for cruise liens to sail to. Many cruise lines have experienced difficulty arriving to the region over the past two seasons, due to strict policing of bio-regulations.
Several cruise ships have been turned away due to not having a clean enough hull, meaning the ships can’t enter National Parks due to environmental concerns.
Furthermore, New Zealand has high port fees, is known for regulatory difficulties for cruise ships, and already presents the logistical difficulty of being very far from Sydney or Brisbane. For example, Sydney to New Zealand is 1300 nautical miles, whereas a common route such as Port Canaveral to the Bahamas is just 265 nautical miles.
