People often say that “if you don’t use it, you lose it” when referring to practicing a skill. According to the Panama Government, this logic also applies to cruise tourism incentives.
In 2019, Panama launched Executive Decree No. 35 to encourage the cruise lines to use Panama as a homeport in exchange for reimbursements of Panama Canal transit tolls.
At the time, Colón was already serving cruise ships on the Atlantic side of Panama and the new Panama Cruise Terminal was just about to open near Panama City on the Pacific side.
But while brands like Royal Caribbean and Norwegian Cruise Line have been known to homeport in Panama on occasion, the practice hasn’t exactly been widespread.
According to local media outlet La Prensa, a detailed analysis ultimately showed that the incentive did not significantly increase cruise traffic.
In addition to increased cruise tourism, officials were anticipating stronger revenues from hotel bookings and spending from passengers embarking and disembarking from sailings.
With the return on investment lower than expected, the government opted to end the program as of June 30, 2025.
Under the now nixed policy, cruise ships that homeported in Panama and could prove that at least 80% of the cruise guests embarking on sailings in Panama were international would have their Panama Canal transit tolls refunded.
The incentive allowed for a 100% reimbursement of tolls from November 2020 to December 2021, and decreased by 10% each year. This means that 90% of tolls could be reimbursed in 2022, 80% in 2023, and so forth.
Panama Canal transit tolls vary based on factors like passenger capacity and gross tonnage, but can cost anywhere from hundreds of thousands of dollars to even over a million dollars per sailing.
Therefore, even a partial reimbursement would ease the burden for the cruise lines, and potentially even lead to lower prices for cruise passengers who would likely eat the cost across their cumulative bookings.
What Do the Numbers Say?
While tourism officials have found that the incentive isn’t boosting cruise tourism enough, the real issue might be that the increase isn’t coming fast enough.
When looking at the year-over-year numbers, there are more cruise guests embarking on voyages through the Panama Canal.
An estimated 225 ship transits were expected during the 2024-2025 season, which runs from October 2024 to May 2025 and only just ended.
This translates to an estimated 324,000 cruisers visiting Panama as a port of call, and 145,600 guests coming to Panama because their cruise ship was homeporting there.
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“An increase in transits is expected this fiscal year due to the continued demand for vacation experiences, which still shows no signs of slowing down,” said Albano G. Aguilar, market analysis and forecasting specialist at the Panama Canal Authority, when the season first began.
The final numbers for the most recent season have not been confirmed just yet, but the numbers will likely grow compared to the 2023-2024 season.
The previous year saw 201 transits through the Canal, which put the total number of cruise guests somewhere in the range of 300,000 to 400,000.
Many of the mainstream brands continue to offer Panama Canal itineraries, including Princess Cruises, Holland America Line, Celebrity Cruises, Norwegian Cruise Line, Royal Caribbean, Carnival Cruise Line, and Viking Cruises.
