Cruise Ship Levy: consultation analysis

3. Basis of the cruise ship levy

This chapter examines respondents’ views on what should be the basis of any cruise ship levy. The consultation paper notes specific minimum criteria the Scottish Government considers for making any levy applicable. This notes that the levy is not intended for ferry services or those who arrive in Scotland on a private boat or yacht not carrying passengers. The paper also notes that the legal boundary of most local authorities ends beyond the foreshore, and it would not be possible to implement a levy for activities beyond the boundary.

Q3. What should the primary basis of a Cruise Ship Levy charge be, if introduced in Scotland? Select one: A) Tonnage of a ship B) Passenger capacity of a ship C) Number of passengers on board a ship D) Number of passengers to disembark from a ship E) Other (please specify)

Please provide the reasons for your answer

A range of views were expressed by those answering Q3. Overall, the most favoured option for a levy was the number of passengers to disembark from a ship (25%), followed by the number of passengers on board a ship (20%). However, almost one in five (18%) were unsure, and 13% selected ‘other’. ‘Don’t know’ was more likely to be selected by organisations who answered (41%), compared to 4% of individuals. The number of passengers to disembark was the most favoured option among individuals (27%), and the second most popular among organisations (22%). The number of passengers on board a ship was the most favoured option among local authorities (58%), while tourism-related organisations preferred the number of passengers to disembark (53%).

Three fifths of respondents provided an open answer to Q3. As the open question prompted respondents to comment further on their closed-question responses, the analysis below is structured by the most to least supported option at the closed question, with the perceived advantages and disadvantages detailed under each approach.

Number of passengers to disembark from a ship

Advantages

Several respondents at the open question supported a levy based on the number of passengers disembarking a ship. These respondents generally believed that charging based on the number of passengers leaving the ship and potentially using the community facilities felt in line with the rationale behind the levy. This approach was also felt to ensure those using local amenities paid for them. Other respondents felt that this approach was most comparable to the principle of a visitor levy that may be applied in other areas. A few respondents expressed support for this approach but did not elaborate on why.

“As stated earlier, the rationale for the levy should be to generate revenue to maintain and enhance infrastructure and services, and to ensure visitor management is proportionate to local circumstances. By that rationale, it is logical to conclude that if the levy is premised on addressing visitor needs and impacts, the levy should both be drawn from that source of those impacts and then invested in services and facilities which are used by those visitors. The primary basis for the charge being the number of passengers to disembark from a ship in the local area would have the effect of linking levy generation directly to actual ‘on-the-ground’ visits, infrastructure usage and demand on services and facilities. However, it is accepted that drawbacks of this model may include the lack of predictability in how much revenue would be raised, potential difficulties in collection, including in smaller rural ports, and greater challenges in administration – therefore, a charge based on the number of passengers on board a ship may be the next most equitable, and most readily achievable, option.” – Shetland Islands Council

“I would suggest that the levy be operated on a permit basis, the charge reflecting where and how many guests disembark. Operators should apply for such a permit in advance, submit a passage plan, and seek to book a slot where resources are limited. Resource 'bottlenecks' will occur at isolated islands (St Kilda is an example where only a limited footfall/day should be permitted) and where port facilities are limited. This would not be an onerous requirement on the cruise operators as they are used to doing precisely this on the coasts of Svalbard, Greenland, the Canadian Arctic and Antarctica.” - Individual

Disadvantages

Concerns about using disembarkation numbers as the basis for the levy were raised by some respondents. Some were concerned about the administrative burden of managing this measure, i.e. rather than planning in advance based on other metrics, numbers would need to be monitored as passengers leave their ship while ensuring passengers are not counted multiple times if leaving the ship more than once.

“If passengers stay on the ship, then they are not actually visiting Scotland or the area, so we feel they should not be subject to any kind of levy. This would require a local council employee to count the number of passengers coming off the ship. The challenge is that it will be difficult to identify if they come off more than once, e.g. they go on a morning tour, back on board for lunch, then wander around the town in the afternoon.” - Fort William Marina & Shoreline Community Interest Company

Some felt that if the levy is only applied to those leaving the ship, it may discourage passengers from disembarking to avoid paying the levy. These respondents believed this did not align with the rationale for the levy, as they felt it was not intended to discourage tourists from coming ashore, but to raise revenue to improve the infrastructure in communities affected by cruise tourism.

Number of passengers on board

Advantages

Several respondents supported using the number of passengers on board a ship as the primary basis of any cruise ship levy. Some felt that this would be the most straightforward approach for cruise ship operators to implement and generate the least amount of administrative burden. Some expressed the view that this approach was the most equitable, as it applied to all cruise ship passengers equally, not just those who decide to disembark. Some commented in support of this approach without providing details.

Disadvantages

Some respondents raised concerns about using the number of passengers on board a ship as the basis for the levy. In contrast to those respondents above who considered this an equitable approach, some respondents commented that it could be unfair to charge passengers who decide not to disembark, particularly if the rationale for the levy was to mitigate the impact of cruise ship passengers on local amenities. This point was made by a few representatives of the cruise ship industry, including Cruise Britain, who submitted a similarly worded response.

Passenger capacity of a ship

Advantages

Support for using the passenger capacity of a ship as the basis of the levy was expressed by some respondents. The main reason for supporting this option was that ships with larger capacities were thought to have a greater environmental impact. Another respondent suggested that if cruise ship operators are not filling larger ships to capacity, a levy based on this approach could also encourage operators to use smaller ships with less environmental impact.

“[It] Shouldn't matter how many people are on board, just the potential number of people, as that may vary over seasons. The impact of the ship is the same.” – Individual

Disadvantages

Some respondents highlighted concerns about using a ship's passenger capacity. As with other themes, a small number of respondents shared a similarly worded response that noted a concern that using this metric as the basis of a levy did not align with the levy’s goals. Again, they felt it would discourage tourism to Scotland rather than raise revenue for the community impacts of cruise tourism.

Tonnage of the ship

Advantages

Using the tonnage of a ship as a basis for any cruise ship levy was supported by some respondents. Those who supported this measure felt that it was the most equitable approach as they believed larger ships have a greater impact on the environment and affected communities. A few others noted that this approach aligned with existing port tariffs and could therefore be an administratively simple way of calculating the levy.

“Tonnage of a ship would likely be more reliable than the capacity of a ship, which may not necessarily reflect the size of a ship. There may be some large cruise ships that purposely have less passenger capacity, providing a more luxury experience for passengers compared to similar large cruise ships, which may choose to maximise capacity to achieve best value for passengers and the operator. Larger ships and high passenger capacity ships are likely to impact local infrastructure and the environment more, so revenue raised from a levy linked to the size of a ship would correlate directly with potential strain. Larger ships would also contribute a fairer share compared to smaller ships.” - The City of Edinburgh Council

Disadvantages

Some respondents, although marginally more than those who approved of this approach, raised concerns about using the ship's tonnage as the basis for the levy. Some felt that tonnage was not reflective of the number of passengers. Some, including a few who provided similarly worded responses, suggested that this did not align with the goal of the levy, as the intention was not to reduce the size of cruise vessels arriving in Scottish ports. A few respondents reflected that if any levy is calculated on the tonnage of the ship, then it is not a passenger or visitor levy as presented in the consultation paper.

“While tonnage is a commonly used metric in port charges (e.g. harbour dues), it is designed to reflect the physical size of a vessel – not the number of passengers it carries or the impact it has on local services. Tonnage is unrelated to passenger activity. Two ships of similar gross tonnage may carry vastly different numbers of passengers.” - British Ports Association

Other suggestions, concerns and considerations

Overarching themes

As mentioned in Q1, several respondents reiterated their disagreement with introducing a cruise ship levy at this question, and some reiterated their need for more information about the levy's aims and goals before providing an answer.

Ease of implementation and administration.

Some respondents outlined the advantages of the different approaches but commented that they would support whichever was the easiest to administer or implement. These respondents felt that keeping the costs involved in managing the levy as low as possible would be necessary to ensure the levy positively impacts communities.

Other concerns

General concerns about the proposed basis of the levy were raised by several respondents. Some, including a similarly worded response from a few cruise industry organisations, raised concerns about the data cited in the consultation paper which highlighted the success of levies in other major cities and communities in Europe. For example, Ambassador Cruise Line noted that these locations “have higher cruise deployments annually, including turnaround calls, compared to most Scottish ports.”

A few respondents raised concerns about the administrative burden of any levy, suggesting there may not be a net positive impact from the options presented in the consultation.

Other suggestions

Some respondents provided other suggestions and considerations for how any levy could be calculated. These included, from most to least prevalent:

• Using a combination of metrics or a hybrid metric, such as using a flat fee per passenger, a gross tonnage charge, and an infrastructure surcharge, as one individual claimed is used in Alaska, Barcelona, Greece and Greenland.
• Calls to use the approach metric that will have the best outcome for the environment and ecosystems.
• Charging the levy once nationally, rather than at every Scottish port visited.
• Ensuring the levy is charged once in any given local authority rather than at multiple ports within the same local authority.
• Considering a port-of-entry levy instead (see Q18).

Q4. In addition to the main basis of the charge, should any cruise ship levy also take into account the environmental impact of a cruise ship?

Among those answering Q4, just over half (52%) agreed that any cruise ship levy should also consider the environmental impact of a cruise ship, 37% disagreed, and 11% were unsure. While two thirds (68%) of individuals felt this should be the case, the same proportion (67%) of organisations disagreed. Opposition was highest among harbours and ports (100%) and cruise industry respondents (92%), with two thirds (67%) of local authorities also disagreeing with this approach.

While there was no open-ended follow-up to Q4, several respondents at Q19 (any other comments) advocated for greater consideration of cruise ships' negative environmental impact and how any cruise ship levy can mitigate this. This included encouraging sustainable cruise practices, such as waste reduction, cleaner technologies, and limits on cruises to sensitive areas. Using monies raised for, for example, cleaning, conservation, and mitigation for the pollution and carbon footprints of cruises was also suggested.

Conversely, comments were also made that there should not be an environmental tax for cruises, given that there are no similar taxes for other forms of transportation.