The city of Galveston, Texas, is looking for new revenue streams to offset the expenses generated by its booming cruise industry. The city has already finalized a new surcharge on cruise tickets sold by Royal Caribbean. Negotiations are also underway with Carnival Cruise Line and Disney Cruise Line to add the same surcharge.
The surcharge, which will be 50 cents per ticket, will generate revenue that could be used for infrastructure improvements and other priorities as decided by the city council.
In addition to the surcharge on cruise tickets, the city council is also discussing a potential ordinance to add a $1 per day per car surcharge for parking in both port and private cruise lots for more than two days.
Galveston in Negotiations with Cruise Lines Over Tariffs
Galveston has included a new surcharge in the contract between the city and Royal Caribbean, established when the cruise line built its new state-of-the-art cruise terminal. The new surcharge is already being paid by guests sailing onboard Royal Caribbean’s ships from Galveston.
Port trustees are in final negotiations with Carnival Cruise Line and Disney Cruise Line to add the same surcharge. Galveston believes these cruise lines understand the need for the tariff and want to be good community partners.
In a report by the local Daily News, Galveston Mayor Craig Brown said: “If they were more in the bargaining seat, I don’t know how they would respond. But since this is such an attractive cruise port, they understand that they want to be a good community partner here and continue that relationship.”
“When Royal Caribbean wanted to be here and invest $125 million in this new cruise terminal, we needed to strike a contract with them. We just put that in the contract. We explained this is something we need to do for the residents and people of the city to help us offset those costs that are generated by extra people on the island here.”
The new surcharge on cruise tickets has sparked some concern about the impact on tourists. However, most people believe that the surcharges will not be a significant burden for passengers.
As a local business owner pointed out, the 50-cent charge is unlikely to be noticed by cruise guests, given the already considerable cost of a cruise.
Questions About the Use of New Funds
Port of Galveston Director and CEO Rodger Rees seems to agree that the 50-cent surcharge will have little effect on cruisers. Still, he has questioned how the newly generated funds from the surcharge will be spent for the island. On top of that, a potential parking surcharge will directly impact the port’s income.
Port of Galveston Director and CEO Rodger Rees said in the report: “If the money goes into the general fund, you can’t identify what it’s for. All I know is our parking is a very lucrative business for us and that money is used to rebuild our infrastructure. If we have to give up money for the parking, then that will be less money that gets reinvested.”
“One of the things they’re talking about is you have to park for 48 hours. If you don’t park for 48 hours, you’re not subject to the fee. I’m not really sure that’s fair.”
The city officials estimate that the proposed parking surcharge would earn the city about $2 million annually.
The new surcharge on cruises sold by Royal Caribbean, Carnival, and others sailing from the port and the potential parking surcharge for motorists could be a source of controversy in the short term. However, Galveston believes these new charges are necessary to offset the costs of its booming cruise industry and ensure that the city continues to grow and prosper.
Ultimately, the new surcharge and parking surcharge could provide a significant source of revenue for the city and help fund important initiatives that benefit both those going on a cruise and locals alike.
Galveston is a popular port for cruise ships, with several cruise lines and ships scheduled to sail from there in 2023. Carnival Cruises offers departures from Galveston onboard Carnival Dream, Carnival Breeze, and Carnival Vista.
Royal Caribbean International offers cruises from Galveston onboard Adventure of the Seas, Allure of the Seas, Radiance of the Seas, and, later this year, Harmony of the Seas. Additionally, Princess Cruises sails from Galveston with Ruby Princess and Regal Princess and Disney Cruise Line with Disney Magic.