Courts blocked green fee for cruises. This company is still charging it

Norwegian Cruise Lines Charges Hawaii’s Green Fee Despite Court Injunction

Norwegian Cruise Lines has begun charging passengers Hawaii’s transient accommodations tax (TAT) and the new environmental “green fee,” despite a court order preventing state officials from collecting these taxes from cruise operators, creating confusion and controversy among travelers.

Dallas resident Don Yonce, currently aboard Norwegian’s Pride of America, reported receiving an invoice during his interisland voyage that included a $1,035 TAT charge based on his family’s cabin suite cost. Yonce expressed surprise at seeing the charge, saying, “We were under the impression that the injunction stopped this.” According to Yonce, ship staff acknowledged the injunction but told passengers they “were told by corporate to charge it anyway.”

Norwegian representatives have stated the company will refund passengers if the cruise industry ultimately prevails in its ongoing legal battle against the tax. The company first notified customers like Yonce via email in October that their cruises would include Hawaii’s 14% state and county TAT for time spent in port.

The situation has created inconsistent practices across the industry. Oceania Cruises confirmed it isn’t attaching the taxes to its upcoming Hawaii cruises scheduled for October, while Royal Caribbean referred questions to the Cruise Line Industry Association (CLIA). The association, however, distanced itself from making industry-wide recommendations, stating, “Decisions about how to handle potential charges during ongoing litigation are individual commercial decisions made by each cruise line.”

The legal dispute began when federal appellate judges issued an injunction against the tax collections on cruise ships on New Year’s Eve, just hours before they were set to take effect. The cruise industry is challenging portions of Hawaii’s new green fee law that require ships to pay the same transient accommodations tax as hotel and vacation rental owners.

Hawaii’s landmark environmental fee, which increased the TAT by 0.75 percentage points, is expected to generate approximately $100 million annually. These funds are designated to help protect Hawaii’s environment from overtourism, wildfires, natural disasters, and the growing impacts of climate change. Governor Josh Green has indicated that the cruise industry’s portion represents about 10% of the total green fee revenue.

The CLIA’s lawsuit argues that the TAT will substantially increase the costs of Hawaii-bound cruises, harming not only cruise operators but also local businesses that depend on tourism. The next hearing in the case, a scheduling conference, is set for January 26.

For passengers like Yonce, the controversy goes beyond the additional cost. “I also think that Norwegian is hurting their case,” he said. “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. You can’t have it both ways.” Yonce added that this would likely be his family’s last cruise with Norwegian, citing the company’s handling of the tax situation rather than the tax itself as the reason.

The implementation of Hawaii’s green fee represents a significant development in tourism management, as it establishes the nation’s first dedicated environmental fee targeting visitors. The approach reflects growing concerns about sustainable tourism in environmentally sensitive destinations like Hawaii, where balancing economic benefits with environmental protection has become increasingly critical.

As the legal proceedings continue, both cruise operators and passengers are left navigating uncertain waters regarding who should pay these fees and when—creating potential for customer dissatisfaction and market disruption in Hawaii’s valuable tourism industry.