SINGLE HSC/TIPPING THREAD (Previously "Why are gratuities not included in Fares?")

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#1
Newport,TN
277 Posts
Joined Feb 2009
I am an intelligent person, but my mind cannot comprehend why cruise lines do not incorporate the "service charge" into their fares. I understand that the fare prices look better without them, but it is actually part of the cruise price.

I get frustrated when people remove the charges when they get onto the ship.

I was on a cruise last summer, and while sitting with individuals in the smoking area, spoke to numerous people that had already removed their charges. One couple was from Australia, who said they do not tip in their country. Tried to explain that the charge was for the crew, and I was told "then it should be included in the fare". My reply? "Maybe Australian quotes should have them built in. See how cheap your fares are then."

Later, we spoke to someone else that removed their gratuities. This guy was American, and what he said kinda made sense, however not enough to screw the crew. As he said, when I check into a Motel 6, I do not tip the maid, unless I trash the room, and additional work is required of them. Their job is to clean my room, and change my linens. Same as a cabin steward. If you do not request ice, or anything out of the norm, they have done their job, so why pay extra. He eats at lido, so no one waits on him.

I understand the additional daily charge, but maybe it should be part of the base fare. If a passenger gets bad service, then guest services should be able to "solve" any problems, or adjust $$$ if a problem is not solved. Crew should not suffer because of one's culture or thoughts on tipping.

Thanks for letting me vent.
#2
Cape Coral FL
3,363 Posts
Joined Apr 2003
I totally agree with you. I have said for a long time that I wish the cruise lines would include the fare in the price of the cruise, or at least give the passenger the ability to prepay it as part of the fare. I think its crazy that it is added to your on board account each day.

I can't for the life of me understand the cruise lines thinking on this.
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#3
Indianapolis, IN USA
1,215 Posts
Joined Jul 2015
I didn't mean to get personal, but there are multiple pages on different threads on this topic. And I did provide an answer...it's optional on HAL cruises. It's obviously not a surprise to CC posters, so how hard is it to build the service fee into your budget and pay it on day one if you don't want it in your final bill?
#4
New Jersey
8,722 Posts
Joined May 2007
Not ANOTHER tipping thread!

This is the fourth tipping thread to start recently. If you go to the next page, you'll see at least one of them. Here's a link to page 8 of that thread, which discusses the commission crew pay on wages but not tips.

http://boards.cruisecritic.com/showt...2263270&page=8
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Kathy
The THIRD generation in my family to sail on a Cunarder
28 QE2 - including 2 Midnight Sun, 2 Panama Canal, 6 TAs, 4 Canada/New England, and various Caribbean, Bermuda, Europe itineraries
9 QM2 - 5TAs, Caribbean, Royal Circumnavigation of Australia, Canada
1 Caronia - Baltic
10 HAL
1 Princess
2 RCCL
5 NCL - including 2 on SS Norway (RIP)
1 Uniworld River Cruise (Tulips and Windmills)
1 American Cruise Line - Queen of the West, Columbia & Snake Rivers
#5
NYC
3,566 Posts
Joined Mar 2011
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.
#6
Fort Lauderdale, FL
9,792 Posts
Joined Jan 2012
I've never been to a hotel or resort in the USA where the HSC or Resort Fee was built into the rate. We are currently staying in Walt Disney World and there's a $22 fee added onto our folio. It posts daily - and it's neither negotiable nor removable. When we reserved the hotel, the quoted rates showed taxes, but not the daily service charge.

It's not that unusual for the service charge to be handled this way. It really isn't.
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#7
London, UK
1,498 Posts
Joined Apr 2010
Its interesting that the luxury cruise lines offering all-inclusive include tips. It has never stopped passengers from giving additional gratuities where warranted. When Crystal move this this system a few years ago, they had to adjust crew wages.

It is the mass travel cruise lines still have a tipping policy. By the way, Cunard is owned by Carnival, which is why the Queen Mary II is not all inclusive even at the luxury end.

Is it purely to allow the cruise lines to advertise the cheapest fare possible, then charge passengers for extras. I suppose it is no different to flying low cost airlines where passengers are very price sensitive.

I do wonder if cruise passengers are very price sensitive since the offering by each ship and cruise line is essentially different. It is very different to flying from point A to point B.
#8
Central FL
8,433 Posts
Joined Sep 2006
Originally posted by 3rdGenCunarder
Not ANOTHER tipping thread!
Maybe we should have a single thread for all HSC/tipping discussion like the one for smoking!
#9
Bermuda
2,591 Posts
Joined Jun 2009
TAXES!!!!!!!!


US Govt taxes the wages that is paid to the crew. They do business in the USA and they are taxable... the corporate wage bill. The crews are working outside the US, but that tax is taken in the USA. None of that does any help for crews. So.... pay the crew the minimal wage.... and US will pay that tax. And that money comes through passenger tickets. The money is made IN the US. Instead they can add the HSC. That money is made OUTSIDE the US. This way the crew can be paid... as they should do... and HAL can make happy crew and they can their corporate tax.

The HSC is paid by passengers outside the US. It is 'optional'. Otherwise it goes back to Seattle and is back on the corporate wage bill... and is taxable by US Govt.

If HAL can reduce their taxes, they can also reduce the cost of their passenger tickets... yes, and profits too. The less that passengers pay for they pay for their ticket they would be happier. Sure. So.... adding the HSC is actually helping EVERYONE... including passengers.

If you want to be happy with lower ticket prices... this is they way they can do it. Don't blame HAL.... all cruises lines are doing it this way. Nothing special by this with HAL.

There is more to all this. Crews from abroad pay taxes in their own countries. The vast bulk of their wages.... partly from Seattle and part from their ships account is sent abroad.

It is complicated but this is the way the cruise lines and the best way for them to drive their bottom line. Makes a better price for our cruise ticket too! It is not as easy as saying..."Add it onto the ticket." The cost of your ticket would go HIGHER.

I just wish some passengers could wrap this concept around their heads.... thinking they can save money by screw*ing the crew. It doesn't help anything to say that standards might slip if we can reduce tips. It won't make standard go higher if the HSC is added to the ticket. Better idea, don't complain about removing $2 for a steward HSC.... instead... speak to the Supervisor or Maitr'd or Front Office... SOLVE THE PROBLEM. Do you want to save $2 or would you rather offer a comp glass of wine!
#10
New Brunswick
40,150 Posts
Joined Jan 2009
Originally posted by JohnKen3
Its interesting that the luxury cruise lines offering all-inclusive include tips. It has never stopped passengers from giving additional gratuities where warranted. When Crystal move this this system a few years ago, they had to adjust crew wages.

It is the mass travel cruise lines still have a tipping policy. By the way, Cunard is owned by Carnival, which is why the Queen Mary II is not all inclusive even at the luxury end.

Is it purely to allow the cruise lines to advertise the cheapest fare possible, then charge passengers for extras. I suppose it is no different to flying low cost airlines where passengers are very price sensitive.

I do wonder if cruise passengers are very price sensitive since the offering by each ship and cruise line is essentially different. It is very different to flying from point A to point B.
Isn't Seabourn still owned by Carnival Corp? tipping is included on that luxury cruise line I am quite sure?
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#12
Palm City, Fl
3,861 Posts
Joined Dec 2002
Originally posted by BlueRiband
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!
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#13
Bermuda
2,591 Posts
Joined Jun 2009
Originally posted by cruiseing marly
They do have offers that include the tip . Maybe they should let any one that wants to prepay tips at final payment. Would that be better ?


Go back to the earlier posting. It SAVES money on your ticket. What difference does it make to passengers? It has to pay before or after... one way or the other. It is do you with your own accounting methods... paying in advance or paying later.
#14
Bermuda
2,591 Posts
Joined Jun 2009
Originally posted by kazu
Isn't Seabourn still owned by Carnival Corp? tipping is included on that luxury cruise line I am quite sure?

Yes. And the cost of your ticket price is a lot higher than HAL, Costa, Princess, Cunard, Carnival etc.

Do you want to have it included on your ticket they could... and used to... even at HAL. You want a higher ticket price just to be able to say it is 'included'?
#15
New Jersey
8,722 Posts
Joined May 2007
Originally posted by cruiseing marly
They do have offers that include the tip . Maybe they should let any one that wants to prepay tips at final payment. Would that be better ?
Reread what the OP said. He/she is suggesting the inclusion of tips as a way to stop people from removing tips. His complaint is not that HE has the tips on his bill. It's that other people remove the tip, which hurts the crew.

I understand the reasons why it isn't to anyone's advantage to fold the tip cost into the wages. But I do wish there was a way to make it harder for the people who don't want to tip to remove the HSC. Is there a reason why it can't be compulsory as it is in hotels? Would that make it not a tip and thus subject to all the tax issues?
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Kathy
The THIRD generation in my family to sail on a Cunarder
28 QE2 - including 2 Midnight Sun, 2 Panama Canal, 6 TAs, 4 Canada/New England, and various Caribbean, Bermuda, Europe itineraries
9 QM2 - 5TAs, Caribbean, Royal Circumnavigation of Australia, Canada
1 Caronia - Baltic
10 HAL
1 Princess
2 RCCL
5 NCL - including 2 on SS Norway (RIP)
1 Uniworld River Cruise (Tulips and Windmills)
1 American Cruise Line - Queen of the West, Columbia & Snake Rivers
#16
Canada's Capital
5,745 Posts
Joined Oct 2009
Originally posted by 3rdGenCunarder
Is there a reason why it can't be compulsory as it is in hotels? Would that make it not a tip and thus subject to all the tax issues?
My understanding is that the courts are still looking at this very issue: if it's mandatory, it's no longer a tip, and if it's no longer a tip, it must be taxable income.
#17
Calgary
374 Posts
Joined Feb 2008
Originally posted by Topsham
Go back to the earlier posting. It SAVES money on your ticket. What difference does it make to passengers? It has to pay before or after... one way or the other. It is do you with your own accounting methods... paying in advance or paying later.

I personally find if you don't buy my tickets based on perks but on price . No perks seems to be a better deal !
#18
San Diego, CA
1,662 Posts
Joined Dec 2009
You answered your own question.

igraf


Originally posted by wannagonow123
..I understand that the fare prices look better without them, but it is actually part of the cruise price. ...
#19
Indianapolis, IN USA
1,215 Posts
Joined Jul 2015
I don't know why the IRS would treat taxes on cruise line employees any different than servers in your favorite restaurant. Servers get taxed on tips collected by their employers via credit cards, and I think if it's an all cash business, the IRS has a formula to collect on tips regardless of how they're paid.
I do think advertising of low fares is a factor, but many cruisers who want to tip appreciate the convenience of the service charge. To keep the rest of their more Scrooge-like customers happy, HAL made it optional.
#20
Canada's Capital
5,745 Posts
Joined Oct 2009
Originally posted by blizzardboy
I don't know why the IRS would treat taxes on cruise line employees any different than servers in your favorite restaurant. Servers get taxed on tips collected by their employers via credit cards, and I think if it's an all cash business, the IRS has a formula to collect on tips regardless of how they're paid.
I do think advertising of low fares is a factor, but many cruisers who want to tip appreciate the convenience of the service charge. To keep the rest of their more Scrooge-like customers happy, HAL made it optional.
The majority of cruise ship employees are neither American citizens nor taxable in the USA. The IRS has no jurisdiction.