A proposed 88% increase in border processing fees targeted at cruise passengers may make cruising to New Zealand more expensive and more difficult for travelers later this year.
The new fee would take effect from December 1, 2024, and is drawing heavy criticism from tourism groups as well as Cruise Lines International Association Australasia and the New Zealand Cruise Association.
With the proposed fee increase set to be implemented in less than five months, cruise lines would be hard-pressed to sail profitably in the region. Because of environmental regulations, fees, and other factors, New Zealand is already one of the most expensive markets for cruise lines to operate in, with very thin profitability margins.
“Cruise lines meticulously plan and budget their operations two to three seasons ahead, leaving no room to pass unexpected cost increases to passengers who have already booked and paid for their trips,” explained Jacqui Lloyd, New Zealand Cruise Association CEO.
Lloyd estimates the increase in fees would amount to an additional $2 million (NZ – approximately $1.2 million USD) for the 2024-2025 cruise season.
“These financial burdens will fall squarely on the cruise lines, threatening to devastate an industry already operating on razor-thin margins,” she said.
Cruise lines typically estimate port fees and taxes which are added to passengers’ fares at the time of booking. When the cruise sets sail and those final fees are calculated at the time the ship actually visits a port of call, guests may receive a small refund to their onboard accounts for any overestimation of those fees.
If the fees have been underestimated, however, cruise lines cannot then add to guests’ charges after the cruise is fully paid and instead would simply cover the excess fees from their profits. Cruise lines have become very adept at estimating fees, but the significant increase New Zealand is seeking is far beyond the scope of any estimation error.
This can add up to $20,000 or more in extra fees for each cruise ship visit, depending on the number of passengers and crew members aboard.
The cruise industry is attempting to work with the New Zealand government to come to an agreement on fees, regulation, and restrictions as part of regular consultations, but it is unclear whether any changes may be possible before the new fees could be implemented.
Cruising Down in New Zealand
It should be noted that New Zealand cruise tourism has not yet returned to pre-pandemic levels, unlike many areas that have already surpassed those numbers.
While the nation is on track for continued recovery, the proposed fee increase could suppress cruise tourism in the region due to unsustainable costs. Some projections indicate up to a 22% decline in cruise ship visitors for the 2024-2025 season.
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Many cruise travelers are nervous about visiting New Zealand, for while the area is gorgeous and has many fantastic features to attract tourists, the strict regulations make it difficult to ensure port visits.
Biosecurity measures for the country occasionally force ships to skip port visits or change itineraries in order to clean the hull or otherwise decontaminate a vessel before visiting. This could mean a dream cruise itinerary ends up not visiting the ports a traveler had hoped for, making the vacation less ideal.
New Zealand cruise itineraries may depart from homeports in New Zealand or Australia, and often include ports in both countries as well as other South Pacific destinations, depending on the cruise length. The typical cruise season stretches from October through April, the summer season in the region.
Top New Zealand ports include Wellington, Lyttleton (Christchurch), Napier Port, and Auckland. A variety of cruises lines offer itineraries to these destinations, including Princess Cruises, Carnival Cruise Line, Royal Caribbean International, Silversea Cruises, AIDA Cruises, Celebrity Cruises, Norwegian Cruise Line, Holland America Line, Oceania Cruises, and more.
