2025 should be a year of celebration in Cabo San Lucas. The city has been a featured port on Mexican Riviera cruises for 60 years, dating back to the mid-1960s, when Princess Cruises invented the concept before sharing it widely with U.S. television viewers via the long-running 1970s and 1980s show The Love Boat, filmed aboard a Princess cruise ship.
To honor the 60th year of Mexico Riviera cruises, Princess is planning a special 14-day Diamond Anniversary voyage departing December 6 from the Port of Los Angeles, with two overnight stays in Cabo San Lucas and Puerto Vallarta and visits to other popular destinations such as Loreto, Manzanillo, and Mazatlán.
Tariff concerns cast a pall over the cruise industry in Mexico
However, along with the celebration 2025 is also a year of concern, not only for Cabo San Lucas but other popular cruise ports in Mexico. That’s because of a new tariff expected to take effect on July 1 (after being delayed from an initial start date in December 2024). No, this one isn’t courtesy of the U.S. President but rather the Mexican Senate, and if it is enacted as expected it will impose a US $42 tax on every person who takes a Mexican cruise. Even those who don’t get off the ship to enjoy port visits.
Most of the money raised from this measure (66%) is earmarked for the Mexican military, not to fund improvements in port facilities. But even if it were, the cruise industry and tourism officials in Mexico would likely have the same response. Namely, criticism and pushback due to the expected deleterious effects this charge — one of the highest by any country — is likely to have.
The tariff’s effect on Mexican ports of call
In a letter to Mexican President Claudia Sheinbaum, the CEO of the Florida-Caribbean Cruise Association, Michele Paige, stressed the negative impacts this tariff she believes this tariff will have, particularly in Mexico, and pointed out it would make the country 213% more expensive than the average port of call destination in the Caribbean, and thus not competitive.
“The Government’s plan to eliminate the ‘in-transit’ exemption status that has been in place for cruise passengers for over a decade impacts the livelihoods of tens of thousands of Mexican citizens, countless small businesses, and communities along Mexico’s coastlines that depend on cruise tourism.”
The concern is understandable, given that cruising is worth US $500 million to Mexican port economies annually. Octavio de la Torre, president of CONCANACO (the National Confederation of Commerce, Service, and Tourism Chambers), put it more bluntly, per The Associated Press: “This could result in a significant decrease in visitors.”
What might the tariff mean for Cabo San Lucas?
Paige specifically pointed out the impacts in Quintana Roo, home to Cozumel, the country’s most popular cruise port destination, and where cruising accounts for 40% of the GDP statewide. But Cabo San Lucas, which sees around half a million cruise ship visitors annually, could also be hard hit in manifold ways, including reduced cruise traffic from cruise ships and altered itineraries that omit Cabo San Lucas and other Mexican ports of call, leading to lost jobs and lost revenue for local businesses.
Another possibility is reduced investment in port infrastructure. It’s unlikely that this tariff will affect the 688 million pesos already allotted for infrastructure improvements between 2024 and 2029 via the Secretaría de Marina’s Programa Maestro de Desarrollo. However, if Cabo San Lucas and Ensenada, the two most important Mexico Riviera cruise ports, see a significant decline in visitors moving forward, this could impede investments from other sources.
What could pushback look like when the tariff goes into effect?
Do you think tariffs aren’t taken seriously by the cruise industry? Just look at what recently happened in Iceland, where a modest $18 tariff was imposed in January 2025. Cruise ships immediately began canceling visits. Tourism officials, as in Mexico, had cautioned the Icelandic government that such a tariff would have negative impacts, but to no avail.
A well-placed local source confirms cruise lines are up in arms over the Mexican tariff and that reduced visits are a real possibility. In the meantime, all new itineraries to Mexico are on hold pending some sort of agreement. But that’s only half the equation. Consumers may also rethink the Mexican Riviera since these are typically more budget-friendly cruises; thus, the high tariff represents a much greater percentage of the total cost.
Tawnee Sons, co-owner of Florida’s cruise-focused World2Sea, notes that taxes and fees have doubled in recent years so this latest tariff could trigger a tipping point for Mexico at a time when its ports are already seeing slightly less interest.
“The trend is now shifting toward destination-based travel, further diminishing demand for Mexican ports of call,” she explained, via Travel Weekly. “Given this decline in interest, a substantial (uptick) in fees could make these itineraries even less appealing, particularly for families and affinity groups, who often choose cruising as a value-oriented vacation option.”
How important cruise ship visits are to Cabo San Lucas?
Cabo San Lucas welcomed over 540,000 visitors thanks to cruise ship visits in 2022, and over 735,000, a record number, in 2023. Meanwhile, that number dropped to 448,000 in 2024. This decrease was expected due to the number of ships rerouted to the destination post-pandemic when other popular locales had yet to welcome back cruise traffic.
The real math that determines good from great years is rather simple. On average, each passenger now leaves about US $100 in local coffers per port visit. Thus, half a million people annually could mean as much as $50 million deposited in various pockets in Cabo San Lucas.
Nearly two decades ago, in 2007, an impact analysis of the cruise industry in Mexico noted US $38 million in cruise-related expenditures in Cabo San Lucas during that single year and the creation of 1,100 local jobs. About the same number of passengers (450,000) visited then as in 2024, so the cruise industry has remained a remarkably consistent source of revenue and employment.
But Cabo San Lucas and its cruise industry are now entering uncharted waters.
With reports from Travel Weekly, F-CCA and Luz Noticias
