Cruise lines have been lobbying Government to scrap plans to introduce a hefty $20 hike in passenger tax in next month's Budget, The Royal Gazette has learned.

The joint Royal Caribbean International and Celebrity company has warned Government that the planned increase could make cruise passengers decide against travelling to Bermuda.

Bermuda's passenger tax at $60 per head is already the highest in the world, dwarfing that of rival destinations in the Caribbean, and cruise lines are alarmed at the prospect of it being raised to $80 between May and August for ships calling at Hamilton and St. George's.

Passenger tax in the US Virgin Islands are $7.50 per person, Cozumel in Mexico is $3, St. Maarten is $5, San Juan, Puerto Rico, is $10.50, and the Bahamas is $15.

Executives from the Royal Caribbean International and Celebrity company met Finance Minister Eugene Cox and Tourism Minister David Allen at the end of last year to press for the tax to be frozen at $60 or reduced. It is understood that Celebrity Cruises has also urged Government not to confirm the tax hike in February's budget.

The Florida Caribbean Cruise Association and individual companies have been pressing governments throughout the Caribbean to reduce passenger taxes to help an industry that has been crippled since September 11. Puerto Rico is reducing taxes by 25 percent, as are publicly owned ports in Mexico, and Costa Rica has also reduced the passenger tax. Bermuda-based shipping agents John S. Darrell and Meyer Shipping have backed the call by the cruise lines for the planned increases to be scrapped and fees to be reduced.Mike Ronan, associate vice president destination development at Royal Caribbean International and Celebrity, told The Royal Gazette: "We've made our position clear to your government and had a very good meeting and shared with them information that's not for public knowledge about the state of the industry and asking the government to seriously consider the position coming up to the Budget about the proposed increase of $20.

"As partners with Bermuda, and as an industry, and in keeping with what's going on around the world, we've asked them to reconsider any increases, and to consider reductions.

"The message we've sent out to individual countries, and in public forums through the Florida Caribbean Cruise Association, is that we are asking for any assistance in keeping costs down, or bringing them (taxes) down in 2002."

Asked what the reaction would be if Government presses on with the taxes, he said: "It would be something we would need to sit down with the Government and understand what their thought process was and the effect it could have on traffic to Bermuda.

"The tax has to come out of something and whether it is our revenues or the passenger, it could affect the saleability of the product.

"Any fees that add to the cost of travel can be a barrier regardless of where you are in the world, because the economics are not good.

"Every destination is trying to work with the parties to try to attract business and a lot of that is based on price. If we have to reduce prices to attract business and we are faced with taxation that we can't control, that may affect passengers' decisions.

"We're not looking for conflict. It is a business relationship and it needs to be good for both sides and we are continuing to strive to do that."

John S. Darrell president Donald MacPherson said: "I would urge Government to revise these taxes downwards, in particular under the circumstances where the cruise lines are taking such a beating, that its all the more reason to look at reducing them.

"Several of the islands to the south of us have taken advantage. This (tax reduction) would show the cruise lines that we're cognisant of the problems they are going through.

"I think we are the highest anywhere in the world and the fact of the matter is we need to get together with the cruise line industry and try to stop this sort of attitude where the cruise line industry is `over there' and it seems we're not really interested in them."

Mr. MacPherson, whose company handles the Pacific Princess and Royal Caribbean's Nordic Empress, said it was also unfair that the passenger tax is applied regardless of how long a ship is on the island.

QE 2 passengers who stay for less than a day would pay the same tax as tourists on other ships that stay for several days.

Captain John Moore of Meyer Shipping, said: "After September 11, and given the state of the economy, it would be a retrograde step for Government to go ahead and do this.

"The figures are down from last year (2000) and so are the airline passengers. The feeling is that the passenger tax should be held at where it is now or even look at lowering it. I'm sure a cut would bolster arrival figures.

"I don't think the principals (owners of the ships) will be too happy if it is increased as their revenues have been greatly affected by September 11."

Hotels have been urging Government to limit the number of cruise passengers because they spend much less on the Island than hotel guests.

Bermuda Hotel Association President William (Billy) Griffith refused to be drawn on the level of passenger tax, saying it was a matter for the cruise lines and Government.

"If it needs to be re-examined in light of September 11 then it should be re-examined. We would not be upset or happy one way or the other," he said.

Finance Minister Eugene Cox said in a statement to The Royal Gazette that the issues will be dealt with in the Budget.

Tourism Minister David Allen said: "It's the Finance Ministry's call. The intention is to put it up, that's been announced. Whether that has been reviewed in light of the representation, I don't know."