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Cruise Lines Concerned About Fee Increases, Emissions Rules

A newly implemented passenger fee, along with new emissions standards slated to go into effect in 2013, were the major concerns raised this week in meetings between local government and national cruise officials.

Gov. John deJongh Jr., Tourism Commissioner Beverly Nicholson-Doty and Port Authority board chairman Robert O’Connor Jr. attended the meetings at the corporate offices of Norwegian Cruise Line (NCL) in Florida. The talks included senior officials from Carnival Cruises, Celebrity Cruises, Holland America Cruises, MSC Cruises, NCL, Royal Caribbean and the Florida Caribbean Cruise Association (FCCA). The FCCA was represented at the meeting by President Michelle Paige and Chairman Kevin Sheehan.

At a full session in March, senators passed a bill imposing a $1 per passenger fee — or common carrier tax — that will be assessed against every cruise ship passenger to St. Thomas-St. John. The bill was signed into law this month by the governor and was amended during last week’s full session to include a new implementation date of Jan. 1, 2012.

DeJongh had suggested the date be pushed back to coincide with the implementation of a new two-percent increase in existing hotel room tax rates and to allow stakeholders within the tourism industry to adjust their prices and prepare their customers for the extra costs.

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The revenue would be collected by the V.I. Port Authority and remitted to the General Fund, which senators have said could help finance a wide range of infrastructure improvements within both districts, making the territory more attractive to visitors.

The bill’s final section also allows cruise ships docked on St. Thomas-St. John to operate their onboard casinos while in port after 5 p.m. The casinos would be available for passengers only, which officials have said would give the cruise ships more incentive to stay later within the territory.

In a statement sent this week about the meetings with cruise officials, deJongh said, "The recent passage of the marine terminal is a concern of cruise line officials and I requested the meeting to be able to hear from them directly and address how we can implement it in a manner that is least disruptive to this vital industry. We have a very good relationship with our partners in the cruise industry and our intent is to achieve as much as possible, a win-win scenario in very challenging times for both sides."

Another issue discussed at the meeting was the possible designation of the territory as a Caribbean Emissions Control Area — an initiative of the U.S. Environmental Protection Agency’s International Maritime Organization that is meant to lower emissions standards for cruise lines and is expected to take effect in the summer of 2013.

"During the meetings, cruise executives expressed concerns regarding the competitive landscape and their ability to prominently feature the territory in light of the anticipated cost impact of the proposed measures, especially when combined with the increased fuel costs," according to the statement from Government House.

In recent Senate hearings, VIPA said that, based on the findings from a recently commissioned study, it was looking at adding other port fee increases, which could total as much as $3 extra per passenger overall.

According to the release, the port and the FCCA will review the basis of the proposed increase, and explore opportunities for revenue enhancements. Nicholson-Doty will also be working with the FCCA in developing a way to increase the community’s awareness on the customer demands of the cruise industry, along with ways to enhance the cruise vacation product.

This week’s discussion followed talks in March at the annual Seatrade conference where the government discussed plans for the proposed fee increases.

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