Posted October 4th, 2015, 09:41 AM
This is a well beaten topic here. Long responses are seldom read but here is an explanation from a member here how was worked on ships for over 30 years:
"Originally Posted by BruceMuzz :
...This entire concept of tipping in lieu of regular wages started on the White Star Line in Britain over 100 years ago. Although it has gone through many permutations, the original concept is still basically there; great service staff will receive plenty tips and be happy to stay on the job; poor service staff will not receive very much in the way of tips and be quite happy to leave.
But now it is much more complicated than it was a century ago.
Most of the tipped crew are not from Britain, but from all over the planet. Each one of the sometimes hundreds of nationalities represented in a ships crew has a different set of tax laws that apply to his or her earnings. In most of those countries, gratuities are not taxed, but earnings are. If passenger fares are increased to cover the gratuities, the total earnings of the service staff will all be taxable - in effect further reducing their salaries.
Currently most cruise lines pay tipped employees around US$1 per day plus tips. The staff's official salary is very low, meaning they have little or no tax liability in their home countries. If we change to a salaried system, many countries would not only require the crew to pay income taxes on all those earnings, but would also require the cruise lines to pay local payroll taxes on those total earnings. The cruise lines would be forced to increase your cruise fares much higher to cover the substantial financial losses by the crew and the cruise line companies.
Each one of the sometimes hundreds of nationalities represented in a ships crew is a member of a national maritime union - often from their home country. Each union has negotiated a contract with the cruise line, specifying benefits and earnings (including tips).
If the cruise lines change the system of paying their service staff, all the labor contracts with all the unions would have to be renegotiated, which could take decades...
And if the tipping concept is removed, we are haunted by an age-old argument from our passengers. If the incentive of tipping is removed, and everyone has a guaranteed salary instead, where is the incentive to do a great job?...
I still agree with you that some sort of change is desperately needed. But nobody seems to be able to come up with a change that will make the situation better - unless you and I are able to convince your fellow cruisers to pay a 100% surcharge on their cruise fare."
In the case of your fellow passengers from Australia, it's a huge problem for cruise lines since over 90% of Australians and New Zealanders remove all gratuities for the reason they told you - they don't tip in those countries. With numbers so great the cruise line has to subsidize the gratuity pool on those sailings or the crew would strike or quit. Since this adds up to hundreds of thousands or dollars per sailing the profitability of these itineraries is removed. BruceMuzz claimed that at least two cruise lines are considering pulling out of the Australia/New Zealand markets for that reason.
Bruce's comments are reinforced when you look at pricing thru Carnival Australia. (Carnival, Princess, P&O, etc)
Prices are much higher than US prices and there is no daily "gratuity" added. My take is that Carnival Australia has priced the gratuity into the cruise fare for Australian guests because tipping in Australia is NOT the custom.
The increase likely also covers the added taxes that would be assessed from the higher wages.
You have to pay the crew or you won't have a crew!