World Bank calls for environmental tax to increase Caribbean cruise ship revenue
BRIDGETOWN, Barbados — The Caribbean earns less from Caribbean cruise ship revenue than any other region globally, according to the World Bank, which is urging governments to consider an environmental levy and stronger collective bargaining.
Lilia Burunciuc, the World Bank’s director for the Caribbean, told delegates at the Wider Caribbean Regional Risk Conference in Barbados that the region’s reliance on cruise tourism has become unsustainable. She stressed that while the Caribbean is the world’s largest hub for cruise travel, it earns the least per passenger.
“The Caribbean is the largest region for cruise ship tourism, but gets the least per passenger,” Burunciuc said. “This is because there is a race to the bottom, again, because the region is not acting as a region.”
She noted that cruise visitors generate far less economic benefit than other types of travelers. “One cruise ship passenger brings 24 times less than one nature-based tourist,” she said. Similar concerns about sustainability were raised earlier this year when industry leaders emphasized greener practices in sustainable cruise tourism partnerships.
World Bank proposes Caribbean environmental tax
The conference, hosted earlier this month by the Caribbean Catastrophe Risk Insurance Facility (CCRIF), provided a platform for Burunciuc to suggest a region-wide tax on cruise lines. The levy, she argued, could create a more balanced tourism model while funding much-needed environmental protection for the Caribbean Sea.
“Why not introduce a Caribbean environmental tax for the Caribbean Sea which is the same for all countries and which all cruise ships will have to pay?” Burunciuc asked.
She added that recent World Bank research indicated support from passengers themselves. “When we surveyed the tourists on whether they would be willing to pay more for preserving the environment, they predominantly said ‘yes,’ if the money is indeed used transparently and for the intended purposes,” she said.
Slow growth compared to global tourism
While tourism remains a major economic driver for the Caribbean, Burunciuc said growth rates have consistently lagged behind global averages.
“For the last 20 years, the Caribbean region has been the slowest growing region in the world, even compared to other small states,” she told attendees.
She argued that the region’s dependence on traditional tourism products has reached a plateau, and that diversification is overdue. “The model of tourism that exists in the Caribbean has probably reached its limit. New, different types of tourism are taking off, but not as fast in the Caribbean, and something needs to be done about this,” she said.
Cruise sector remains vital but underleveraged
Burunciuc emphasized that her call was not to diminish cruise tourism, which continues to be a cornerstone of the Caribbean economy. Instead, she said governments should use their collective strength to secure more favorable terms with cruise operators.
“I think it’s an important tourism segment, which will continue to be very important in the Caribbean,” she said. “But countries can actually get together and try to negotiate better results for themselves from cruise ship tourism.”
Recent industry discussions, such as Royal Caribbean’s Iconic Summit on transforming Caribbean cruise tourism, have highlighted similar themes of rethinking value for host destinations.
The CCRIF, established in 2007 with World Bank support, was designed to help Caribbean and Central American nations pool risks from hurricanes, earthquakes, and other natural disasters. Its work now extends to examining structural challenges within the region’s economies, including tourism.
Officials in the Cayman Islands, including the Ministry of Tourism and the Cayman Islands Tourism Association, were contacted for comment following Burunciuc’s remarks but have not yet issued a public response.
Stay with Unitedpac St Lucia News for in-depth coverage of Caribbean tourism, economic developments, and the region’s evolving cruise ship revenue strategies.
