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

[RDC1]

Fouremco

My understanding is that the courts are still looking at this very issue: if it's mandatory' date=' it's no longer a tip, and if it's no longer a tip, it must be taxable income.[/quote']

 

One of the three main rules, along with must be fully distributed to employees, is that it must not be mandatory.

 

That does not mean that one has to be able to easily modify it, only that it can be modified in some fashion.

 

At this point all we have is some removal of language concerning how it has be modified in the past. No proof that it is not modifiable.

[Hlitner]

I will start by saying that we have never reduced our auto tips on any HAL cruise and usually hand (personally) extra tips to crew members who give us wonderful direct service. However, count me as one who is very unhappy about the HAL auto tipping scheme! Why? The concept is fine. But I want to know where my money goes? Specifically! When we used to tip with envelopes we knew what we were giving our cabin stewards, waiters, etc. If they were exceptional, we gave them exceptional tips. If they were sub standard...they got sub standard tips. But with the HAL scheme a lousy steward is likely getting the same as the best steward. And with this we have a problem. And since HAL does not divulge the formula they use to divide up gratuities (they are not gratuities when mandatory) we have no way to judge whether certain crew deserves more.

 

Hank

[navybankerteacher]

I will start by saying that we have never reduced our auto tips on any HAL cruise and usually hand (personally) extra tips to crew members who give us wonderful direct service. However, count me as one who is very unhappy about the HAL auto tipping scheme! Why? The concept is fine. But I want to know where my money goes? Specifically! When we used to tip with envelopes we knew what we were giving our cabin stewards, waiters, etc. If they were exceptional, we gave them exceptional tips. If they were sub standard...they got sub standard tips. But with the HAL scheme a lousy steward is likely getting the same as the best steward. And with this we have a problem. And since HAL does not divulge the formula they use to divide up gratuities (they are not gratuities when mandatory) we have no way to judge whether certain crew deserves more.

 

Hank

 

Assuming that HAL does, in fact, request an explanation from someone removing/reducing the gratuities, such explanation would involve identifying the crew member whose unsatisfactory performance warranted such removal/reduction. The "lousy steward" would either not be renewed or not considered for promotion.

 

Because they can be removed (for cause), it is not appropriate to call them "mandatory". And, because they are part of the rewards system the line employs to compensate the crew -- the formula for which, is, in fact, fairly well disclosed -- as long as I am willing to sail HAL, it seems appropriate that I accept HAL's business model.

 

Finally, with the vast expansion of the market for cruising -- from an activity largely reserved for the well-to-do who apparently could be trusted to "play the game", to a mass market activity which attracted many budget-minded passengers (who increasingly skipped MDR dinner on the last night) -- there was less "voluntary tipping" - which spurred the lines to make it an add-on -- in order to maintain crew compensation without increasing basic fares.

[Jimbo59]

About 17 years ago when tips were still given in cash, most cruise lines listed tipping suggestions:

 

Waiter $3.50 per day per person

Assistant $2.00

Head Waiter $1.00

Room steward $3.50

Total $10.00 per person per day

 

 

Now, $13.50 per person per day doesn't seem unreasonable.

 

 

Inflation in 17 years is probably more than 35 percent.

[Jimbo59]

Assuming that HAL does, in fact, request an explanation from someone removing/reducing the gratuities, such explanation would involve identifying the crew member whose unsatisfactory performance warranted such removal/reduction. The "lousy steward" would either not be renewed or not considered for promotion.

 

Because they can be removed (for cause), it is not appropriate to call them "mandatory". And, because they are part of the rewards system the line employs to compensate the crew -- the formula for which, is, in fact, fairly well disclosed -- as long as I am willing to sail HAL, it seems appropriate that I accept HAL's business model.

 

Finally, with the vast expansion of the market for cruising -- from an activity largely reserved for the well-to-do who apparently could be trusted to "play the game", to a mass market activity which attracted many budget-minded passengers (who increasingly skipped MDR dinner on the last night) -- there was less "voluntary tipping" - which spurred the lines to make it an add-on -- in order to maintain crew compensation without increasing basic fares.

 

Most crew members now will request that you give them excellent ratings on the survey document you receive. This is because their share of the service charge depends on their rating.

[navybankerteacher]

Most crew members now will request that you give them excellent ratings on the survey document you receive. This is because their share of the service charge depends on their rating.

 

I believe that you are mistaken: I have the clear understanding that the shares of the service charge are broken down by position. The excellant ratings impact whether the staff members are asked to renew their contracts (believe it or not- there is competition for those positions in the home countries which provide staff); the ratings also impact promotions.

[RocketMan275]

I said if the payments get directed towards paying employee compensation, there's really no fraud.

 

I don't know how they structure the revenue, either do any of you. You are making assumptions in the cruiseline's favor. You may do so, but I am not required to.

 

I believe if I pay $50 or $500 or $1500 in hotel service charges, it does NOT add the equivalent amount collectively to what the crew would have otherwise received. I concede it's possible, I just don't believe it.

 

I'm sure if I pay someone $50 in cash, it adds $50 to his/her income.

Well, actually it doesn't because it has been demonstrated repeatedly that funds given directly to an employee must be turned into the tipping pool.

 

 

Not sure why you still call it a 'tip', even HAL has moved away from that. It's a service charge. A tip is discretionary, not obligatory.

 

Actually, that isn't the case either. If you look at the link (provided repeatedly), you'll notice this on the HAL website: "Is There A Hotel Service Charge (Gratuity/Tip)?" So, actually, HAL uses those terms interchangeably.

 

Not angry at any of you. But seems there's not much tolerance for contrary opinions here.

 

There is plenty of "tolerance for contrary opinions" when those "contrary opinions" have the basis in reality/facts that yours so clearly do not.

[Flamencacha]

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.

 

 

 

Australians are charged tips as part of their cruise fare as long as they book in Australia. No they don't tip, it is not their custom.

 

Mr Motel 6 is way off. You cannot compare the two Since hotels chamber service is paid a full wage and your steward is not. The additional tip,cash in hand, would be a better comparison.

Many premier lines include service fees

In their fare.

 

It would make it easier for all, years ago they would give you envelopes and suggest the minimum to tip.

 

A buddy of mine always removes tips, and last time on X he was given suggested guidelines. He took good care of his people though and didn't need it.

 

And yes another tipping thread, but I am with you. Add it to the base fare, and if you want to add something extra do so. I have only not given that additional once. My steward did nothing for me.

[Randyk47]

I'm sure if I pay someone $50 in cash, it adds $50 to his/her income.

Well, actually it doesn't because it has been demonstrated repeatedly that funds given directly to an employee must be turned into the tipping pool.

 

The caveat is that is true only in cases where the passenger has reduced or removed the standard HSC. If the passenger increases or leaves the HSC intact then the employee is allowed to keep the cash tip and is not required to turn the cash in for sharing in the tipping pool. Sharing cash tips say amongst bar staff is a completely different situation and appears to be an agreement reached amongst the bar staff and not a requirement.

[RuthC]

And yes another tipping thread, but I am with you. Add it to the base fare, and if you want to add something extra do so.

However, as has been explained in detail several times, adding the same $13.50/$15 per person, per day, results in the recipients getting a lot less than the quoted amounts.

Not only does the cruise line have to charge the fares as income/expense to their own accounts, but the recipients have to pay taxes on the higher wages in their own country---taxes that are not due when the money is considered a gratuity.

[Flamencacha]

However, as has been explained in detail several times, adding the same $13.50/$15 per person, per day, results in the recipients getting a lot less than the quoted amounts.

 

 

 

Not only does the cruise line have to charge the fares as income/expense to their own accounts, but the recipients have to pay taxes on the higher wages in their own country---taxes that are not due when the money is considered a gratuity.

 

 

 

Good point, but explain that to those that don't tip. On my last cruise I was asked how much I thought was appropriate as an additional extra. Our servers, waiter/ assistant and sommelier were fantastic. It was a 12 day cruise over the holidays. I said it wasn't necessary it was up to them. They weren't used to tipping (Aussies). So they insisted. When I told them what I was giving as an additional, they verbally slapped me in the face and said I must be rich. Ouch. And folks trust me it wasn't that much I cruise SOLO. I guess that's why I just wish they would put service fees as mandatory and as part of the cruise fare.

 

 

 

 

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[RuthC]

Good point, but explain that to those that don't tip.

Let's be sure we're using the same language here. "People who don't tip" are those who remove the Hotel Service Charge. They may or may not give additional cash tips, but they are still tipping in full.

People who don't tip won't be swayed by any discussion of how tips should be paid out, as their motivation for not tipping has nothing to do with the principle of how tips should be collected and distributed. It has to do with not wanting to shell out the money at all.

It is not necessary for anyone to pay cash tips in addition to the Hotel Service Charge, nor should there be any pressure to do so. The HSC has been agreed to by HAL, the recipients, and the union that represents them.

To pay out additional cash tips, and if so in what amounts, should be totally up to the passenger.

[Flamencacha]

Let's be sure we're using the same language here. "People who don't tip" are those who remove the Hotel Service Charge. They may or may not give additional cash tips, but they are still tipping in full.

 

People who don't tip won't be swayed by any discussion of how tips should be paid out, as their motivation for not tipping has nothing to do with the principle of how tips should be collected and distributed. It has to do with not wanting to shell out the money at all.

 

 

 

It is not necessary for anyone to pay cash tips in addition to the Hotel Service Charge, nor should there be any pressure to do so. The HSC has been agreed to by HAL, the recipients, and the union that represents them.

 

To pay out additional cash tips, and if so in what amounts, should be totally up to the passenger.

 

 

 

Completely agree

 

 

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[cbr663]

Most crew members now will request that you give them excellent ratings on the survey document you receive. This is because their share of the service charge depends on their rating.

 

Yes, that is my understanding also. The HAL employee handbook stated that the hotel service charges were pooled (after deducting credit card fees and a reallocation for ships that were expected to generate smaller amounts) and awarded on a point system.

 

There are several problems that I have with this. I generally tip when I want and when I feel it is warranted in response to the service that I have received. By pooling the HSC charges and re-allocating them to other ships, HAL is making the decision on who and when tips are paid - not me. I am merely contributing to a general fund. It doesn't feel right that my HSC is being used to reward crews on another ship.

 

The other is the lack of transparency with the point system. It would seem natural that points are awarded based on position. It would also seem to me that points are awarded based on passenger feedback and I think that this places the crew member and the passenger in the uncomfortable position of having to seek out and provide written feedback.

[bUU]

I agree that for folks who feel that way those are all good reasons to avoid cruising on cruise lines that operate that way.

[GUT2407]

Well, actually it doesn't because it has been demonstrated repeatedly that funds given directly to an employee must be turned into the tipping pool.

 

The caveat is that is true only in cases where the passenger has reduced or removed the standard HSC. If the passenger increases or leaves the HSC intact then the employee is allowed to keep the cash tip and is not required to turn the cash in for sharing in the tipping pool. Sharing cash tips say amongst bar staff is a completely different situation and appears to be an agreement reached amongst the bar staff and not a requirement.

 

 

Well the contract actually says nothing about what happens to it after it's turned into the pool.

 

It also says ALL cash tips have to go into the pool.

 

Everything else is gossip and/or speculation.

[Randyk47]

Copied and pasted directly from the HAL_Crew_Service_Directories

TIPPING NOT REQUIRED POLICY

All ships have the Rewards for Excellence (RfE) Plan which consists of Hotel Service Charges and Beverage Service Charges. If a guest chooses to adjust out of the RfE Plan and instead provide cash tips to an employee, the employee is required to turn in this cash to their Department Head so the money can be added to the RfE plan. Any "tips" received above and beyond the guests standard amount may be kept by the crewmember.

 

The caveat is that is true only in cases where the passenger has reduced or removed the standard HSC. If the passenger increases or leaves the HSC intact then the employee is allowed to keep the cash tip and is not required to turn the cash in for sharing in the tipping pool. Sharing cash tips say amongst bar staff is a completely different situation and appears to be an agreement reached amongst the bar staff and not a requirement.

 

 

Well the contract actually says nothing about what happens to it after it's turned into the pool.

 

It also says ALL cash tips have to go into the pool.

 

Everything else is gossip and/or speculation.

 

I'm not sure the contract requires additional cash tips to be turned in if given above and beyond the HSC. If there was a blanket requirement then the quoted crew manual is in error or doesn't make sense.

[Nang]

Looking at HAL's website today I notice automatic service charges are increasing for cruises departing after May 1 2017. Also notice, though it is only obvious by comparing the new policy to the old, that daily hotel service charges per person CAN NO LONGER BE ADJUSTED.

 

 

 

I have just read the money matters on the HAL website and it clearly states you can adjust the HSC as copied below directly from the "Is there a HSC (Gratuity/Tip)?" answer. This is stated in the paragraph following the table of current and new charges.

 

If our service exceeds or fails to meet your expectations, you are free to adjust this amount at the end of each segment and/or voyage. The Hotel Service Charge is paid entirely to Holland America Line crew members, and represents an important part of their compensation.

[GUT2407]

 

I'm not sure the contract requires additional cash tips to be turned in if given above and beyond the HSC. If there was a blanket requirement then the quoted crew manual is in error or doesn't make sense.

 

 

I have seen contracts from three lines, all produced in response to subpoena to cruise lines, all require all cash tips to be handed in to the pool. None say what happens with them after that.

[Randyk47]

I have seen contracts from three lines, all produced in response to subpoena to cruise lines, all require all cash tips to be handed in to the pool. None say what happens with them after that.

 

I'll go with Holland America's published manual.

[bUU]

I'll go with Holland America's published manual.

Over court filings?

 

Really?

[Randyk47]

Over court filings?

 

Really?

 

Yes really. Was it a Holland America contract? Link to the filing?

[POA1]

 

It also says ALL cash tips have to go into the pool.

 

 

No. The text you quoted says that if a guest opts out of the regular hotel service charge plan, the cash tips have to be turned in.

[Randyk47]

By the way the quote function is working a bit strange. For instance I never said/typed the quote POA1 posted but I had quoted that statement from another post by another member. Apparently when POA1 quoted that post it attributed the statement to me. Not complaining just noting the quote function is not quite right.

[catl331]

Actually, that isn't the case either. If you look at the link (provided repeatedly), you'll notice this on the HAL website: "Is There A Hotel Service Charge (Gratuity/Tip)?" So, actually, HAL uses those terms interchangeably.

HAL does not use HSC interchangeably with tip or gratuity. The line you quoted is a section title in the FAQs. FAQs would not be very useful if they did not contain key words that someone may be looking for. The only other place that the words tip or gratuity are used is in the last line: "In terminals, airports, ports of call and on shore excursions, we suggest that you extend gratuities consistent with customary local practices." Edited April 24, 2017 by catl331