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

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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.

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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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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?

Edited by blizzardboy

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Not ANOTHER tipping thread! :eek: :eek: :eek:

 

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/showthread.php?t=2263270&page=8

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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.

Edited by BlueRiband

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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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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.

Edited by JohnKen3

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Not ANOTHER tipping thread! :eek: :eek: :eek:
Maybe we should have a single thread for all HSC/tipping discussion like the one for smoking! :D

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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!

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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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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! :cool:

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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.

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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'?

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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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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.

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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 !

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You answered your own question.

 

igraf

 

 

..I understand that the fare prices look better without them, but it is actually part of the cruise price. ...

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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.

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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.

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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.

 

I agree that the service charge is an excellent convenience. With all the open-dining options, including the lido, direct tipping is really only feasible for your cabin steward and a fixed dining waiter. The result would be that only some of the waitstaff would get tips, and that would be bad for morale.

 

As for your last sentence, it's very sad, but true. :(

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I don't know why the IRS would treat taxes on cruise line employees any different than servers in your favorite restaurant.

 

Crew line employees are only subject to the US IRS if:

a) they are US citizens which the majority are not

b) are employed in the US, which they are not. These ships operate in international waters not in the US

 

In fact they are unlikely to be employed by a US company even though most passengers would regard Carnival or HAL as US operations. Why do you think most ships fly a foreign flag as oppose to a US flag. HAL ships are mainly registered in the Netherlands.

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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'?

 

I have NEVER said I wanted the HSC included - it makes no difference to me on HAL. I was simply pointing out that CCL does have a cruise line with gratuities included. Of course the ticket price is higher on Seabourn. There is a LOT more included than just the gratuities.

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Good points. Carnival Corp was incorporated in Panama which adds credence to your remarks. I had assumed they were a US company. Dumb assumption!

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Good points. Carnival Corp was incorporated in Panama which adds credence to your remarks. I had assumed they were a US company. Dumb assumption!

 

I think where the ships are registered ("flagged") makes a difference, too.

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Carnival Corp (is)was incorporated in Panama

 

And you can be sure this was by design....followed by a lot of lawyers and bean counters.

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My compliments to the OP. While I don't agree with including gratuities in the basic fare, I do compliment you on your concerns for the crew and your desire to make it much more difficult to stiff the crew.

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I have NEVER said I wanted the HSC included - it makes no difference to me on HAL. I was simply pointing out that CCL does have a cruise line with gratuities included. Of course the ticket price is higher on Seabourn. There is a LOT more included than just the gratuities.

 

Personally I wouldn't mind if the HSC was included in the fare but I treat the HSC as a personal "must fund/pay" part of the cruise. I guess I'm ambivalent about the HSC presently being optional and that potentially I could remove or reduce the HSC. While I understand it's possible I've never had service so bad that I have considered doing that. If I get bad service then I address it at the point in time with the appropriate manager. Removing the HSC at the end of the cruise because of real or perceived bad service accomplishes little in my mind as management is pretty well lost as to what or how to fix. Now granted recently Mrs. K and I have been cruising on another line, a line by the way that supposedly pays their crew and staff higher wages and discourages tipping, and I know I pay a higher fare but as Jacqui points out there is a lot more included in that higher fare than just what might be considered comparable to an HSC.

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If gratuities were included in the fare of mass market cruises it would need to be an industry standard IMO, in order for prices to stay competitive. If only one did it their prices would suddenly look higher, and some consumers would look elsewhere. This would be a big risk to take for the first line that did this.

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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.

 

Regent includes all charges in their fare.

 

That's pretty much it - "luxury lines" are not pricing their product to people looking for the cheapest fares. The moment mass market cruise line Y adjusts their fares to include crew salaries they immediately look more expensive than mass market cruise line Z.

 

Logistically, it could take years to negotiate an entirely new system of compensation with all of the different maritime unions that comprise a ship's crew today. (Luxury lines have smaller ships and therefore fewer unions to deal with.) Then you're back to the old argument in how to offer incentive for good performance if the crew member gets paid the same regardless of how well or poorly they do their job.

 

Not too long ago a thread called for HAL to "stop the perks and stop the fare increases" or something to that effect. If HAL switched to an all inclusive system we would immediately see complaints of astronomical fare increases.

Edited by BlueRiband

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After reading thousands of posts about tipping and removing of tips on HAL ships, I've reached the point it is not my concern and no longer my interest what anyone else is doing with regard to tipping hard working crew.

 

If someone is inclined to book a cruise, full well know what is expected of them in regards to tipping, plan before they ever step foot on the ship to remove that tip because they would rather save that sum of money, nothing I say is going to make them more responsible in terms of meeting their commitment they agreed to when they booked the cruise.

 

I worry about what I will tip, how much extra I plan to provide to who and let those who say in my country we don't tip use that excuse to enable themselves to look in the mirror.

 

To ask why the cruise line does not change the policy is not the approach that makes any sense to me. It has been explained here in in probably dozens of other threads why they don't.

 

Don't worry why they don't include it; do the responsible thing and don't remove it from your OB Account.

 

Speech over.

 

Edited by sail7seas

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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.

 

 

Not like that at all. That is sent through disbursements to banks overseas. It does save the tax and that save onto passengers.... and then also makes for the company.

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Crew line employees are only subject to the US IRS if:

a) they are US citizens which the majority are not

b) are employed in the US, which they are not. These ships operate in international waters not in the US

 

In fact they are unlikely to be employed by a US company even though most passengers would regard Carnival or HAL as US operations. Why do you think most ships fly a foreign flag as oppose to a US flag. HAL ships are mainly registered in the Netherlands.

 

 

 

 

We are not taking about INCOME TAX on the crew wages. We are talking about the PAYROLL TAX and HAL has to pay that if the money is done through Seattle. This is why they can eliminate some of the tax... and so the crew are paid by HSC.

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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.

 

 

We cruise mostly HAL (200+ days so far) but have also cruised Oceania and Princess. We are aware of the HSC and are fine with that because we know about it ahead of time. We also tip individuals to show our appreciation.

An interesting anecdote... We recently booked a Celebrity Cruise for January 2016 to sail with friends (their choice). When we chose Select Dining on Celebrity we had to pre pay gratuities at the time of booking.

Jim

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All the ins and outs of the system could be worked out if there was the will to do so; other lines include gratuities.

 

It doesn't matter terribly to me, but if asked, my preference would be to have the charge included in the fare. It is simple, ensures an appropriate level of remuneration, and it is aboveboard and transparent -- not all this dithering around about not paying money where it is likely due. (I'm talking about the taxes).

 

It will likely take some sort of decision across all lines to make it happen, since cruising is apparently so cost sensitive....

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If gratuities were included in the fare of mass market cruises it would need to be an industry standard IMO, in order for prices to stay competitive. If only one did it their prices would suddenly look higher, and some consumers would look elsewhere. This would be a big risk to take for the first line that did this.

 

Precisely. The ones who would "look elsewhere" would be the ones who plan on saving a few bucks by stiffing the crew. They would say, why should I cruise XXX when I can sail YYY, eliminate the gratuities, and save all that money. I do not buy for a minute any of the excuses for removing gratuities. Those are just excuses to justify saving a few bucks.

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After reading thousands of posts about tipping and removing of tips on HAL ships, I've reached the point it is not my concern and no longer my interest what anyone else is doing with regard to tipping hard working crew.

 

If someone is inclined to book a cruise, full well know what is expected of them in regards to tipping, plan before they ever step foot on the ship to remove that tip because they would rather save that sum of money, nothing I say is going to make them more responsible in terms of meeting their commitment they agreed to when they booked the cruise.

 

I worry about what I will tip, how much extra I plan to provide to who and let those who say in my country we don't tip use that excuse to enable themselves to look in the mirror.

 

To ask why the cruise line does not change the policy is not the approach that makes any sense to me. It has been explained here in in probably dozens of other threads why they don't.

 

Don't worry why they don't include it; do the responsible thing and don't remove it from your OB Account.

 

Speech over.

 

 

Anyone from a non tipping environment is not going to worry about "looking in the mirror". It simply will not occur to them that they are depriving the crew of their salary. Tipping to them will mean a payment over and above their wages.

 

Unless they read CC they will not know how badly paid the crew are - I certainly didn't.

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Anyone from a non tipping environment is not going to worry about "looking in the mirror". It simply will not occur to them that they are depriving the crew of their salary. Tipping to them will mean a payment over and above their wages.

 

Unless they read CC they will not know how badly paid the crew are - I certainly didn't.

 

Did you not know about Hotel Service Charge being posted to your On Board Account when you booked? Did you not see it on their website? Did you research any information about your cruise/cruise line?

If you used a TA, did they not mention it? Did you ask about tipping?

 

I don't mean this as an attack on you but a generic set of questions for all who live in a country where tipping is not common but book HAL cruises. Surely world travelers 'learn along the way', don't they?

 

Edited by sail7seas

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If gratuities were included in the fare of mass market cruises it would need to be an industry standard IMO, in order for prices to stay competitive. If only one did it their prices would suddenly look higher, and some consumers would look elsewhere. This would be a big risk to take for the first line that did this.

 

A couple of years ago Princess did this with Port Fees and Taxes. They said "You pay the price you see" or something to that effect.

 

It didn't last long. Everyone else continued the existing format so Princess looked high.

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