Norwegian Cruise Lines has begun charging its passengers the Hawaiʻi visitor tax and the associated environmental “green fee,” despite a court order preventing local authorities from collecting these fees on cruise ship stays.
This decision comes as the cruise industry is actively challenging the new Hawaiʻi legislation in court, which mandates that cruise ships pay the transient accommodations tax (TAT) akin to hotels and vacation rentals. The injunction against collecting these taxes from cruise ships was issued by federal appellate judges just before the law was set to take effect.
Representatives from Norwegian have assured that passengers will receive refunds if the court rules in favor of the cruise industry.
It remains uncertain if other cruise lines visiting Hawaiʻi are also applying these charges during the legal proceedings. Only two major lines have responded to queries regarding their stance on the tax.
Oceania Cruises has stated it will not apply these taxes to its upcoming Hawaiʻi voyages in October. Meanwhile, a Royal Caribbean representative deferred questions about their policy to the Cruise Line Industry Association, indicating it is a broader industry issue.
The association clarified its position, stating, “Decisions about how to handle potential charges during ongoing litigation are individual commercial decisions made by each cruise line.”
Surprise Fees at Sea
Dallas resident Don Yonce, currently on a Norwegian cruise in Hawaiʻi, reported receiving an email in October notifying him of the 14% state and county transient accommodations taxes to be applied for port stays. The email estimated a $1,035 tax based on the cost of his family’s cabin suite for the week. However, seeing the charge on an invoice during the cruise came as a surprise to Yonce.
“We were under the impression that the injunction stopped this,” Yonce said, speaking from Norwegian’s Pride of America. According to Yonce, guest service managers on the ship acknowledged the injunction but stated they were instructed by corporate to apply the charge regardless.
Other passengers expressed similar dissatisfaction with the unexpected fees.
Norwegian and other cruise lines argue that the TAT will significantly increase costs for cruises to Hawaiʻi, impacting not only the operators but also local businesses dependent on tourism.
“I also think that Norwegian is hurting their case,” Yonce added. “They’ve argued in court this (tax) does irreparable harm to their passengers and their suppliers and themselves, but then they’re collecting it anyway, right? You can’t have it both ways.”
The state of Hawaiʻi expects the 0.75 percentage point increase in the transient accommodations tax, which introduced the green fee, to generate approximately $100 million annually. This revenue aims to protect Hawaiʻi’s environment from the effects of overtourism and natural disasters, including wildfires and climate change impacts.
According to Governor Josh Green, the cruise industry contributes about 10% of the green fee revenue.
The legal proceedings concerning the cruise industry’s lawsuit continue in federal court, with the next hearing scheduled for January 26.
Yonce mentioned that this experience might deter his family from choosing Norwegian for future cruises, not because of the tax itself but due to the company’s handling of the situation.
