The cruise industry is under scrutiny again: this time, Florida State Attorney General Robert A. Butterworth’s office is investigating whether port charges are actual fees that cruise lines pay and pass on to passengers. or are a source of profit for the industry.
Being questioned is whether cruise lines are engaging in an unfair and deceptive trade practice by assessing passengers other than legitimate fees charged visiting cruise ships by port authorities.
Also to be determined is whether consumers are receiving full explanation of port charges and what such charges specifically entail.
“We’re not looking to do the industry harm.” said Jack Norris, Chief of Special Prosecutions for the state’s economic-crimes division. “The issue (however) is whether the cruise industry advertises one thing and does another.”
A lawsuit has been filed against Royal Caribbean Cruise Line by passengers who dispute the line’s port charges. The plaintiffs are also seeking class-action status for passengers who may have been “overcharged” by RCCL for the past five years, according to their lawyer Keith Goldbaum.
Several Measures
If the attorney general finds the cruise industry has engaged in “misleading and unfair practices,” he could impose one or more of several measures. including: restitution of monies to consumers; imposition of fines or penalties on the industry; and an order to the industry to change its practices.
Port charges usually encompass a number of fees assessed to the lines, including head taxes, pilot fees, wharfage charges. stevedoring fees, tugboat costs, etc. Additionally, some cruise lines collect separate charges from passengers for customs and immigration fees.
It used to be that the terms “port charges” and “port taxes” were seemingly interchangeable. It has been speculated that some years ago cruise lines gradually moved to the industrywide use of the term “port charges” instead of “port taxes.”
By and large, although various port charge components are dependent on the number of ports visited, a ship’s size and passenger capacity, for the sake of consistency, cruise lines usually total and pro-rate such assessments across company fleets.
A look at three major cruise lines – Carnival Cruise Lines, Princess Cruises, and Royal Caribbean Cruise Line – show that port charges for week-long Caribbean programs are $99, $109, and $95 per person, respectively.
“Port charges are any charges to the company for going in and out of a port,” said a Carnival spokesman, who confmned his line’s port charges, adding that customs and immigrations fees are “broken out.”
According to Mary Lynch, Director of Public and Industry Affairs, International Council of Cruise Lines (ICCL), over 50 fees are currently paid by the cruise industry. “We don’t see this as a profit center, they’re (port charges) fees that cruise lines incur and in part pass on to the passengers.”
In actuality, passenger head taxes constitute a small portion of port charges. Using a March 1995 Caribbean Tourism Organization list of Caribbean nation head taxes, CIN calculated head taxes of $24.56 for a “typical” seven-day southern Caribbean program that departs San Juan for Martinique, Barbados, Antigua, Sr. Maarten, and St. Thomas. (Martinique does not impose a head tax and Antigua is considering one.) Port charges were listed as $95.
For a week-long eastern Caribbean sailing, which departs Miami for San Juan. St. Thomas, and St. Maanen, and carries port charges of $99, passenger head taxes amounted to about $22.56.
