Cruise passengers in Europe pay less tax than hotel guests, with taxes for a night on a cruise ship about 40% less than those for a night in a hotel. According to a study by Transport & Environment (T&E), a guest spending €100 (R1 870) per night at a hotel in France, Italy or Spain pays 23% of the room price in taxes, while a cruise passenger paying a similar nightly rate pays 12%.
T&E says this means a night on a European cruise is taxed around 40% less than a night in a hotel.
Cruises are legally classified as a form of maritime transport, while they also function as holiday accommodation. This allows them to avoid paying VAT and fuel taxes, according to T&E.
T&E argues that the tax advantages fail to reflect the industry’s environmental costs, including greenhouse gas emissions, air pollution and pressure on popular tourist destinations. It estimates that the external environmental costs generated by cruise ships in France, Italy and Spain ranged between €790 million (R14,7 billion) and €1,3 billion (R24,3 billion) in 2025.
The organisation is calling for tax reforms, including a €15 (R280) levy per passenger per port call, which it estimates could raise €335 million (R6,6 billion) a year across the three countries to protect coastal ecosystems and fund green port infrastructure.
However, cruise trade association body Cruise Lines International Association (CLIA) said cruises could not be accurately assessed through a selective tax comparison with hotels as it failed to account for the sector’s full regulatory framework, operational complexity, environmental commitments and economic contribution.
They stated that cruise lines paid substantial port taxes, passenger charges and other local fees that supported port operations, infrastructure and local services, in addition to meeting wider tax and regulatory obligations.
