Norwegian Cruise Line (NCL) recently sent a letter to guests, alerting them to a significant hike in costs for sailings in Spanish waters or departure from Spanish ports.

This move will affect all boutique purchases, now with a Value Added Tax (VAT) added to the onboard pricing. All food and beverage purchases, including unlimited open bar and specialty dining packages, will also incur VAT.

What does it all mean? Those who have spent hundreds of dollars or euros on all-inclusive beverage and dining packages will still be handed a bill at the end of the cruise. 

Norwegian Cruise Line has announced that guests sailing onboard its ships out of Spanish ports, such as the hugely popular Barcelona cruises or even cruises sailing through Spanish waters, will see VAT added to their bill at the end of the cruise. 

All purchases in the onboard shops will incur a 21% VAT, while all beverage and dining purchases will incur a 10% VAT charge.

The notice was sent to guests and travel partners and outlined the changes in onboard costs. Guests who opt for the popular Free at Sea packages, including all-inclusive drinks packages, will still find themselves paying an additional tax for every drink purchased while the vessel is in a Spanish port or sailing in Spanish territorial waters.

This puts a damper on the all-inclusive experience and raises questions about how NCL plans to market such packages in the future. 

Norwegian Epic Cruise Ship (Photo Credit: zkolra / Shutterstock)

The value-added tax that Norwegian Cruise Line is passing on to guests comes from a new law that the Spanish government passed, which aims to ensure guests onboard ships in Spain pay the same taxes as those who vacation ashore. 

The letter from Norwegian states: “Due to local tax regulations, please note that a 21% Spanish VAT will be added to applicable retail items purchased on board for sailings departing from Spain and calling to European port cities. 

Additionally, a 10% VAT will be applied to all food and beverage purchases made onboard, including purchases made under our Unlimited Open Bar or Specialty Dining packages, for certain sailings departing from Spain or any European itinerary while in Spanish waters.”

With cruise tourism accounting for a significant portion of Spain’s tourism industry, these new regulations mark a crucial turning point in how the industry operates within the country. It’s an issue that affects the experience of guests aboard Norwegian Cruise Line and impacts the broader cruise industry’s relationship with one of Europe’s major tourist destinations. 

Barcelona, along with Civitavecchia and Southampton, has emerged as one of Europe’s cruise industry strongholds over the past two decades. The city became one of the largest homeports in the Mediterranean, attracting 2.7 million cruise guests in the 2022/2023 season. Yet, this surge in tourism has come with its challenges.

Cruise lines have operated in European waters for many years with minimal regulatory intervention. However, there’s been a recent drive by authorities to establish new laws that directly influence the cruise industry in Europe. These laws do not just levy new taxes; they also affect how, where, if, and when cruise ships can enter a port.

Cruise Ships Docked in Barcelona, Spain (Photo Credit: Haland / Shutterstock)

While Spain is reassessing its relationship with the cruise sector, imposing new taxes on cruise guests, Barcelona is scrutinizing the environmental and societal impacts of cruise tourism. The city has earned the dubious distinction of being Europe’s most polluted cruise port, prompting a ban on ships docking at its northern piers starting October 22, 2023.

That Spain is reacting to the cruise industry is not surprising in itself. Of the ten cities in Europe most affected by pollution from cruise ship emissions, the country features three times, besides Barcelona, which includes Palma de Mallorca in the Balearic islands and Tenerife in the Canary Islands.

Barcelona is not alone; since the cruise industry restarted in earnest in 2022 in Europe, several cities have imposed bans on cruise ships while others have placed limits on how many vessels and passengers can enter

The recent tax law enacted by Spain indicates the growing need for the cruise industry to conform to local rules and societal issues. 

Although regulatory shifts are understandable from several perspectives, the economic influence of the cruise sector is often underestimated. In 2019 alone, more than ten million cruise guests arrived at Spanish ports, supporting over 31,000 jobs and contributing 1.48 billion euros to the economy. 

As cruise lines face mounting complaints from guests over the new taxes, questions arise about Spain’s continued allure for cruise operators and whether they might redirect their ships to more accommodating ports and countries.

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