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Cruising permit fees triple in British Virgin Islands

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By Carol Bareuther

It just became costlier to charter in the British Virgin Islands.

New cruising fees, effective Aug. 1, triple the rate for home-based vessels from $2 per person per day in season (Dec. 1 to April 30) and 75 cents off-season (May 1 to Nov. 30) to $6 per person per day year-round.

Foreign-based vessels now pay nearly three times more, or $16 per person per day year-round, up from $6. This is the first increase in the British territory’s cruising fees since 1990, a move customs officials say will pump about $2 million into the local economy, and pay for services and facilities such as customs clearances, immigration, anchor buoys and docks.

“The fee increase is going to affect smaller yachts with tighter budgets and those that operate in an all-inclusive format more so than larger yachts, for which the fee increase is only a fraction of the charter costs and on the guests themselves rather than the yacht,” said Matt Neidlinger, who over the past decade has captained yachts up to 140 feet in the Mediterranean, New England and the Caribbean. Capt. Neidlinger picks up passengers in St. Thomas because of better airlift on the U.S. Virgin Island, but he spends most of the time on charter in the BVI. Because his boss has a BVI trade license, the vessel he charters is considered home-based even though it is foreign-flagged.

A home-based charter yacht, according to this new legislation, is defined as a boat operated in the BVI, generally maintained in the BVI and managed by a company or any other legal entity incorporated, registered or licensed in the BVI for a period of five months or more in any 12-month period. Conversely, a foreign-based charter boat is any boat other than a home-based charter boat.

“I don’t see a $16 per person per day tax on charter guests changing the economics of a megayacht,” said Kathleen Mullen, a yacht and charter broker at Regency Yacht Vacations Ltd., of Tortola, BVI. “It’s a dramatic jump, but the reality is that other destinations, like Anguilla, the Bahamas and the Med, for example, have taxes of one sort or another.”

However, there may be a subtler effect of this cruising fee increase on megayachts, according to Oriel Blake, executive director of the Virgin Islands Professional Charter Association (VIPCA): “Potentially fewer visiting yacht charters in the BVIs could mean less spent ashore on souvenirs, food and drinks. Small BVI businesses catering to yacht charter tourism could be hit by a decline in sales, jobs could be lost and businesses closed, and consequently there will be less of a ‘yachting atmosphere’ for the megayachts to enjoy. The BVIs could lose its buzz while competing cruising grounds benefit as the charter market trend redirects elsewhere.”

Carol Bareuther is a freelance writer in St. Thomas. Comments on this story are welcome below.

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