Prepaid gratuities/service charge

[Maraprince]

Several things:

 

1. Over the years some passengers (not specifically from the UK) tended to spend no money on board for anything and took to bragging about it very openly. In their minds, they paid the cruise fare and would not spend any additional monies for anything once on the cruise (no shore excursions, photos, etc.) If it wasn't "free", they would not pay for it.
   
2. Many of these non-tip paying customers, who were repeat passengers, were entitled to OBCs in some pretty substantial amounts. Last day of the cruise, they would go to the on-board shops and use up their credits buying watches, jewelry, etc.
   
3. In response to this growing trend, DSC were automatically added each day to the passenger's account. To have them removed, passengers needed to go and ask for them to be remove. I guess IMO, NCL felt this process would "shame" some passengers from removing the tips.
   
4. NCL asks passengers to report any less than ideal service to them immediately so the problem can be resolved while on the sailing thus eliminating one reason to remove the daily tips
   
5. Next step was to offer "free drink/extra charge dining" packages where "service charges" would be prepaid before the sailing thereby becoming part of the total cost of the cruise.
   

 

From a sales point, if you only charge for the sailing without all the extras, it makes the pricing look lower.

 

 

The main issue with moving to an all-inclusive price happens with non alcohol drinkers who feel that they are paying to subsidize the passengers who drink. Food in the no extra charge venues is of sufficient quality that dining in pay extra restaurants is purely a passenger's personal choice.

 

 

No way to keep everyone happy unless NCL allows the passenger to choose whether they want all inclusive or not and adjust the pricing accordingly.

 

 

MARAPRINCE

[fshagan]

It's shame we are then labelled as mean. If these service charges were included in the fares, at least for ex UK cruises, this would lead to less confusion and more certainty for the service staff. And as the US cruisers all say they always leave the service charge on, no difference to them. Unless some do actually want to reduce or remove the charges and that is why they insist on having the choice?

 

It's an interesting problem for the companies that want your business. This sentiment comes up a lot, yet when I checked (and mentioned earlier in this thread) the lines that cater to the UK market like Fred Olsen and P&O have nearly identical gratuities / service charges assessed. So it's not only American based companies that have it, but also companies based in the EU that cater to the home crowd. It is traditional on cruise lines for crew in service positions to receive tips.

[fshagan]

All cruise lines should pay their staff a minimum wage and add it in to the price if need be they make million and can afford to do so.

 

They do pay a minimum wage. In fact, they pay more than a "living wage" for the people who work on board.

 

Any cruise ship that is covered by a ITF agreement pays at least a minimum wage of $614 per month, as established by the ITF Seafarers, an international trade union. My understanding is the exact salary on cruise lines is determined by the agreement between the union in the seafarers home country and the company, so I don't know how many that $614 applies to.

 

The surveys done by glassdoor.com show that cabin stewards earn about $1,000 per month, more than twice what the average worker earns in the Philippines. They earn the same as aircraft mechanics, "junior" engineers and paralegals.

 

We often look at the world as rich white western people, and don't realize the average monthly wage in the Philippines is about $167 less than that $614. We even read news stories by journalists that work "undercover" on a cruise ship and are shocked at how little they are paid and how many hours per day they have to work. We are spoiled, rich people.

 

Compared to almost any job they can get at home, the cruise ship work ... as hard as it is ... is very rewarding because their hard work is rewarded with pay more than double the average salary at home.

 

The old pay model was like the restaurant servers in some states here in the US, where they were paid nothing or very little and tips from individual cruisers made up the majority of their pay. Now I believe that the "tip pool" is probably given to them on a separate line item on their paycheck, in addition to whatever the wages are, to make up for the loss of the old tipping system.

 

I think this is done because it is the most advantageous for the workers, as most come from countries that do not tax tip income (the Philippines does not, for example). Now if they simply raised their wages when the "personal-tips-from-individual-cruisers" were eliminated then the result would be a much higher tax bracket ... they would be among the top 10% of paid workers, and pay punishing taxes. It would be, in effect, a huge reduction in wages.

 

I don't think removing the DSC directly affects the worker's pay on that cruise. I do believe it will affect the overall pay of the crew at some point. because from what we can tell it is a pooled incentive program. But month to month, I believe they are paid for the hours worked, on an agreed to contracted amount. But, I don't know for sure ... and no one here does.

[grapau27]

They do pay a minimum wage. In fact, they pay more than a "living wage" for the people who work on board.

 

Any cruise ship that is covered by a ITF agreement pays at least a minimum wage of $614 per month, as established by the ITF Seafarers, an international trade union. My understanding is the exact salary on cruise lines is determined by the agreement between the union in the seafarers home country and the company, so I don't know how many that $614 applies to.

 

The surveys done by glassdoor.com show that cabin stewards earn about $1,000 per month, more than twice what the average worker earns in the Philippines. They earn the same as aircraft mechanics, "junior" engineers and paralegals.

 

We often look at the world as rich white western people, and don't realize the average monthly wage in the Philippines is about $167 less than that $614. We even read news stories by journalists that work "undercover" on a cruise ship and are shocked at how little they are paid and how many hours per day they have to work. We are spoiled, rich people.

 

Compared to almost any job they can get at home, the cruise ship work ... as hard as it is ... is very rewarding because their hard work is rewarded with pay more than double the average salary at home.

 

The old pay model was like the restaurant servers in some states here in the US, where they were paid nothing or very little and tips from individual cruisers made up the majority of their pay. Now I believe that the "tip pool" is probably given to them on a separate line item on their paycheck, in addition to whatever the wages are, to make up for the loss of the old tipping system.

 

I think this is done because it is the most advantageous for the workers, as most come from countries that do not tax tip income (the Philippines does not, for example). Now if they simply raised their wages when the "personal-tips-from-individual-cruisers" were eliminated then the result would be a much higher tax bracket ... they would be among the top 10% of paid workers, and pay punishing taxes. It would be, in effect, a huge reduction in wages.

 

I don't think removing the DSC directly affects the worker's pay on that cruise. I do believe it will affect the overall pay of the crew at some point. because from what we can tell it is a pooled incentive program. But month to month, I believe they are paid for the hours worked, on an agreed to contracted amount. But, I don't know for sure ... and no one here does.

Good points and if that is the case i can see why they would rather it was called tips for their tax.

If it was extra on cruise price or autotips we would go for the best option for the crew.

 

43 cruises and counting.

[Ergates The Ant]

Last time I looked, P and O cruise line is owned by Carnival, and virtually all the cruise ships I can think of are registered under flags of convenience.

 

I think that the percentage of passengers on a ship who are readers of Cruise Critic are probably in a minority. There must be many non US passengers who are not aware of the impact of tipping, as per the US definition. If they see the word, tip, or 'discretionary' service charge, why would they not assume that this means what it does in the UK and many other countries?

The cruise lines do not help either. The wording relating to rewarding service staff would be better replaced with, paying the staff their wages because the cruise line haven't! Or by stating that they think the passengers are too stupid to compare the prices of cruises without taking into account the additional charges. I have been on recent cruises where the port guides delivered to passengers cruising in Europe blithely state that tips of 20% are expected ashore, which is rubbish and misleading to US passengers, who may end up paying twice for their service.

And UK passengers who haven't read as much as I have, having seen this on the port guides in Europe, may assume that the US advice from the cruise line is similarly inaccurate.

When I first visited the US many years ago, before the days of the internet and the amount of information available on sites like this, I assumed that a tip meant an extra bonus. Nowhere on the bill (check) did it say that it wasn't a tip, but was actually the staff pay. And I could hardly believe it when I found out! It seemed both barbaric and exploitative.

When I cruise, where possible I pay the ''service staff pay" in advance so that I know that has been taken care of. I shall continue to make my disgust at this practice known. If I don't speak out, cruise lines might think I am happy with the status quo.

And I'm not comfortable with the excuse that this practice has been set up to facilitate tax evasion!

Thank heaven for those cruise lines which are starting to include staff pay into the cruise fare. I shall be happy to book the new All inclusive rates from the UK, although I do think this is unfair on non drinkers.

[MagicCat7]

 

And I'm not comfortable with the excuse that this practice has been set up to facilitate tax evasion!

Thank heaven for those cruise lines which are starting to include staff pay into the cruise fare. I shall be happy to book the new All inclusive rates from the UK, although I do think this is unfair on non drinkers.

 

They could always include good coffee, bottled water and juice of some sort as an alternative to liquor. I don't drink sodas or the sugary drinks but I bet other folks would. I Love the black coffee with deep rich flavors ground fresh like Norwegian has with the fresh coffee machine. So there are all kind of alternatives fitting for peoples different choices. Liquor is very cheap outside of the USA. So look at the markup they get with charging $10.00 per drink.

 

The practice of flagging under other countries is done to not pay people a living wage so the cruise industry is being cheap. They can create their own narrative, which they do. We sat in a seminar with the cruise staff on the Norwegian, which are always interesting. The cruise director was talking about how he had a choice of the military or a cruise ship. I was thinking I would not recommend a job on a cruise ship or military. The military is in the practice of human experimentation on their own troops and family members without consent in addition to human experimentation on foreign population. The cruise lines won't pay people a living wage. I don't agree with treating service workers as slaves and servants. We all need work to live in this world and people should be paid a living wage no matter where they live. Corporations are simply being cheap!!! Henry Ford said his employees should be able to afford to buy his products. I wonder how many cruise employees would be able to afford to buy a cruise.

[ExpatBride]

Liquor is very cheap outside of the USA.

 

Not in Northern Europe and the UK.

[Ergates The Ant]

They could always include good coffee, bottled water and juice of some sort as an alternative to liquor. I don't drink sodas or the sugary drinks but I bet other folks would. I Love the black coffee with deep rich flavors ground fresh like Norwegian has with the fresh coffee machine. So there are all kind of alternatives fitting for peoples different choices. Liquor is very cheap outside of the USA. =quote]

 

 

I agree, it seems daft providing lots of alcohol but just one bottle of water in the cabin, and coffee only in the dining rooms and not in the coffee bar.

The Celebrity drinks package includes coffees, teas and bottled waters.

 

Your description of the fresh ground coffee on Norwegian is making my mouth water! Are you referring to the coffee bar in the atrium? What is the coffee in the buffet like?

Hang on, I'm way off topic and had better start another thread.

 

A heads up though to anyone sailing to Scandinavia, especially Norway and Sweden, alcoholic drinks are eye-wateringly expensive, by UK and USA standards.

[MagicCat7]

Not in Northern Europe and the UK.

 

If you have been on a cruise through the Caribbean, you will see the prices on the ship and in the ports are cheaper by 50% to 75%. The bottles are larger too. When I say on the ship, I am talking about the liquor that you buy in a bottle that they won't let you drink until you get off the ship. Not the ships expensive over priced drinks. Liquor is very expensive in America with all the excessive taxes that are imposed.

[MagicCat7]

I agree, it seems daft providing lots of alcohol but just one bottle of water in the cabin, and coffee only in the dining rooms and not in the coffee bar.

The Celebrity drinks package includes coffees, teas and bottled waters.

 

Your description of the fresh ground coffee on Norwegian is making my mouth water! Are you referring to the coffee bar in the atrium? What is the coffee in the buffet like?

Hang on, I'm way off topic and had better start another thread.

 

A heads up though to anyone sailing to Scandinavia, especially Norway and Sweden, alcoholic drinks are eye-wateringly expensive, by UK and USA standards.

 

Actually the fresh ground coffee machine towards the back of the buffet is really good and very strong. I didn't know they had a coffee bar in the atrium of the norwegian cruise.

[quickrate]

We were on the Pearl last week and received a notice that there was a problem with our on board account. I had swiped our credit card for me and my husband as we were checking in the day before. Customer service said they needed a signature from me to add my husband. I was thinking why does it matter because most likely he won't be buying anything anyway. Then I realized it was for the daily gratuities. So when I went to customer service, I asked them to removed the daily gratuities for both me and my husband since they needed my signature. They said I could not remove the gratuities until the last day of the cruise because that is when they add them to the bill. They told me they are open 24 hours a day. So I went to customer service at around 6:00am the last day and the woman said I need to come back after 9:00am because that is when they have the forms to remove gratuities. I felt like it was a run around & intentionally done as a way to discourage people from removing gratuities. Just because they can add $280 to my bill for gratuities as a back end fee, include it in the ticket contract doesn't mean I want to pay it. I think it's poor customer service to expect gratuities for service that has not been rendered and for someone doing their job. The cruise industry is consistently raising the gratuities. Is this simply a way for them to pay investors and for CEOs to live in their cushy over priced mansions? How do I even know the staff is receiving the gratuities? I don't care who calls me cheap!!! The whole reason the ships are not flagged in America is because the cruise industry is being cheap and doesn't want to pay their staff a living wage. When I was a waitress, I received minimum wage of $3.25 an hour back in 1980. Tips were an extra bonus for good service. Now it seems like companies expect the customers to pay the salary of their employees. I'm not feeling sorry for a corporation that doesn't care about customer service. If I want to pay a tip, I will tip the person myself. I always think it's funny the cruise industry encourages the customers to tip staff above and beyond the auto gratuities.

Well, aren't you a Georgia Peach. If you were at waitress, as I would for years, you would understand how important the gratuity is to the staff who wait on you on the ship. while you are hurting the staff, you aren't affecting the CEO one bit.

Pat

[grapau27]

We were on the Pearl last week and received a notice that there was a problem with our on board account. I had swiped our credit card for me and my husband as we were checking in the day before. Customer service said they needed a signature from me to add my husband. I was thinking why does it matter because most likely he won't be buying anything anyway. Then I realized it was for the daily gratuities. So when I went to customer service, I asked them to removed the daily gratuities for both me and my husband since they needed my signature. They said I could not remove the gratuities until the last day of the cruise because that is when they add them to the bill. They told me they are open 24 hours a day. So I went to customer service at around 6:00am the last day and the woman said I need to come back after 9:00am because that is when they have the forms to remove gratuities. I felt like it was a run around & intentionally done as a way to discourage people from removing gratuities. Just because they can add $280 to my bill for gratuities as a back end fee, include it in the ticket contract doesn't mean I want to pay it. I think it's poor customer service to expect gratuities for service that has not been rendered and for someone doing their job. The cruise industry is consistently raising the gratuities. Is this simply a way for them to pay investors and for CEOs to live in their cushy over priced mansions? How do I even know the staff is receiving the gratuities? I don't care who calls me cheap!!! The whole reason the ships are not flagged in America is because the cruise industry is being cheap and doesn't want to pay their staff a living wage. When I was a waitress, I received minimum wage of $3.25 an hour back in 1980. Tips were an extra bonus for good service. Now it seems like companies expect the customers to pay the salary of their employees. I'm not feeling sorry for a corporation that doesn't care about customer service. If I want to pay a tip, I will tip the person myself. I always think it's funny the cruise industry encourages the customers to tip staff above and beyond the auto gratuities.

TBH cruise companies and some service employers have got some cheek taking profits for their products and expecting their customers to pay their employees wages.

I always tip for the service not

To save a cheapskate employer from paying a living wage to their employees.

 

43 cruises and counting.

[grapau27]

Isn't that always the case?:confused:

Only because they have been allowed to get away with it.

 

43 cruises and counting.

[MagicCat7]

Well, aren't you a Georgia Peach. If you were at waitress, as I would for years, you would understand how important the gratuity is to the staff who wait on you on the ship. while you are hurting the staff, you aren't affecting the CEO one bit.

Pat

 

I was a waitress during the late 1970s at a time when companies paid people minimum wage that was somewhat decent. If I had to rely on tips, there would have been no point in working as a waitress. In 1980, minimum wage was $3.25 an hour and waitressing was my after school job. Georgia minimum wage is $5.00 an hour in 2017. So 37 years later, minimum wage at a federal level is $7.25 an hour? What happened to cost of living raises? The problem is corporations treating employees as slaves from where I see it. It's clear we can't trust corporations to pay people a living wage so we need the checks and balances of government to nudge them along. I get that there are a lot of old retired people who remember the booming 1970s. The problem is the rest of us didn't experience that and don't have pensions and benefits like the retired people do in America and Europe. When things get so expensive, people will just stop cruising. We are paying attention to the fine print. I bet the CEO will be affected if the cruise industry collapses. This is one of the reasons Savannah would not put in a terminal is because they are thinking the industry might collapse.

[fshagan]

And I'm not comfortable with the excuse that this practice has been set up to facilitate tax evasion!

 

Just a point of order here, in the third world countries where tips are not considered income this is done on purpose by the government to enable their unskilled citizens to take service jobs abroad and send money home. It is not tax evasion at all. It is the desired outcome.

 

As an example, If I win at the poker tables during my cruise around England next year I will pay US income tax on my winnings. My understanding is that you won't pay any income tax if you win big at poker while cruising Alaska. Your laws are different than ours. You are committing the crime of tax evasion; your government has chosen not to tax poker winnings, but mine has.

[Mike A]

I have been a member of Cruise Critic since inception. I do not post often but felt the need to join the conversation. My wife and I always pay the DSC and tip more for exemplary service.

I do wish to point out however that many people either do not know or forget that until the early 2000's the Room Steward, Assistant Steward (some cruise lines) Waiter, Assistant Waiter and Dining Room Captain (Head Waiter) were tipped at discretion. On the last day of the cruise, tip envelopes were left in your stateroom and the cruise line provided suggested (expected) gratuity amounts based on job title. The key word was discretion. I was a waiter years ago and my daughter is a restaurant manager on Long Island. Therefore I traditionally am a large tipper. However that being said I miss being able to decide what amount I tip. In July 1999 we were on the Maiden Voyage of the Carnival Triumph. Our Dining Room Waiter was awful but the assistant was great. As a result we gave the Assistant Waiter the Waiters tip and the Waiter the Assistant's tip. In fact we gave the assistant more than the suggested Waiter amount.

Around 2002 the cruise lines decided to automatically bill the gratuities to the room account with the option to waive out similar to today. My understanding is this was done to ensure all service Ee's received the recommended amount. On NCL with freestyle dining I can somewhat understand as you do not have a set Dining crew for the length of the cruise. Therefore if you do choose to cut or eliminate the DSC you may well hurt those who served you well such as those in the buffet who share in the DSC. Frankly there is no right or wrong to this topic. Tipping is in my opinion a very personal choice. My goal here was to bring some perspective to the conversation. Hopefully I did.

Happy Cruising !!!

 

 

Sent from my iPhone using Forums

[fshagan]

The practice of flagging under other countries is done to not pay people a living wage so the cruise industry is being cheap. They can create their own narrative, which they do. We sat in a seminar with the cruise staff on the Norwegian, which are always interesting. The cruise director was talking about how he had a choice of the military or a cruise ship. I was thinking I would not recommend a job on a cruise ship or military. The military is in the practice of human experimentation on their own troops and family members without consent in addition to human experimentation on foreign population. The cruise lines won't pay people a living wage. I don't agree with treating service workers as slaves and servants. We all need work to live in this world and people should be paid a living wage no matter where they live. Corporations are simply being cheap!!! Henry Ford said his employees should be able to afford to buy his products. I wonder how many cruise employees would be able to afford to buy a cruise.

 

A couple points: one reason the cruise lines use foreign flagged ships is that they pay no US corporate income tax on any ship-based operations using a foreign flagged vessel, including passenger fares, on-board revenue from drinks, excursions, etc. You'll see this noted in the "risks" section of the annual reports, because a risk shareholders have to be aware of is that tax reform could change this treatment, and they could have a much larger tax bill on the balance sheet.

 

The Pride of America is a US flagged vessel and has to pay their workers minimum wage (9.25, I think). But many of the positions are close to that anyway, even without considering the free food and lodging.

 

The cruise lines do pay a "living wage", all things considered. The median annual income for someone 25+ with a high school education in the US is $38,000. But in the Philippines, where NCL recruits a lot of crew, the average annual income is about $5,400.

 

Look up the salaries for cruise line workers on glassdoor.com and you'll see that NCL, RCL and Celebrity all have reported wages of about a $1,000 a month for cabin stewards and servers. They are earning more than double what they would at home. Would you call a high school graduate living in America and earning double what the median is ... $76,000 a year .... being "exploited"?

 

Bartenders earn about $3,600 per month. Youth counselors $1,600. Photographers $1,100. The last two are comparable to what they earn here in the US.

 

Here's a couple of screen shots from glassdoor.com for NCL: and then Celebrity (which doesn't have a US flagged ship):

 

The reason this is important to me is that I would not choose to cruise if I really thought the workers were exploited.

[MagicCat7]

The reason this is important to me is that I would not choose to cruise if I really thought the workers were exploited.

 

I had a Carnival employee tell me in 2015 they are not paid well. The NCL customer service agent was telling me that tips go to all the people behind the scenes that we don't see like the people who do the laundry and cook the food. If the rhetoric is to guilt customers in to paying tips for services that have not been done for them, then maybe I do need to find another vacation. Because a tip is for service above and beyond what the employee is paid to do.

[njhorseman]

Because a tip is for service above and beyond what the employee is paid to do.

 

I guess you've never eaten in a restaurant in the US? In many states wait staff is paid well below minimum wage...as little as $2.13 per hour, including in your state, Georgia. Yes, that's right... $2.13 per hour in Georgia.Their tips are not just for service "above and beyond", they are to bring their earnings up to a minimum wage level.

[NLH Arizona]

I had a Carnival employee tell me in 2015 they are not paid well.

Talk about guilting someone to give them a tip.

[Faulkh]

I am a bit hestitant to ask this question, but since there are quite a few experienced cruisers on here I figured I would get the correct answer. I am new to NCL 1st cruise coming in Aug (only 2 others) so my question concerns the UBP. I see that 18% gratuity is added to all drinks, since we got the UBP as one of the promotions how is the 18% gratuity applied, at every drink with the swipe of the card even though there is no charge? Or do I tip in cash. I want to make sure I have enough cash and small bills. Please advise how I tip the bar tenders while using UBP. Also if I get the Soda package for my son and his friend will the tip just get added to my on board account. TIA

[GUT2407]

I am a bit hestitant to ask this question, but since there are quite a few experienced cruisers on here I figured I would get the correct answer. I am new to NCL 1st cruise coming in Aug (only 2 others) so my question concerns the UBP. I see that 18% gratuity is added to all drinks, since we got the UBP as one of the promotions how is the 18% gratuity applied, at every drink with the swipe of the card even though there is no charge? Or do I tip in cash. I want to make sure I have enough cash and small bills. Please advise how I tip the bar tenders while using UBP. Also if I get the Soda package for my son and his friend will the tip just get added to my on board account. TIA

It's 18% on the price of the package, so package is normally $79 a day 18% is $15 something a day.

[LMaxwell]

I am a bit hestitant to ask this question, but since there are quite a few experienced cruisers on here I figured I would get the correct answer. I am new to NCL 1st cruise coming in Aug (only 2 others) so my question concerns the UBP. I see that 18% gratuity is added to all drinks, since we got the UBP as one of the promotions how is the 18% gratuity applied, at every drink with the swipe of the card even though there is no charge? Or do I tip in cash. I want to make sure I have enough cash and small bills. Please advise how I tip the bar tenders while using UBP. Also if I get the Soda package for my son and his friend will the tip just get added to my on board account. TIA

 

18% of the package price was charged to you with your final payment; the drink gratuity is already paid for.

[MagicCat7]

I guess you've never eaten in a restaurant in the US? In many states wait staff is paid well below minimum wage...as little as $2.13 per hour, including in your state, Georgia. Yes, that's right... $2.13 per hour in Georgia.Their tips are not just for service "above and beyond", they are to bring their earnings up to a minimum wage level.

 

 

It's not my fault the service industry is being cheap and chooses to NOT to pay their staff a living wage. How about they use the stock market to pay their staff instead of using it for over priced CEOs & executives.

 

 

Frank J. Del RioBase Pay $1,837,500Bonus + Incentive Comp $1,903,799Total Cash Compensation $3,741,299Stock Award Value $10,276,315Option Award Value $17,752,083Total Equity $28,028,398Total Other $140,651Total Compensation $31,910,348

[njhorseman]

It's not my fault the service industry is being cheap and chooses to NOT to pay their staff a living wage. How about they use the stock market to pay their staff instead of using it for over priced CEOs & executives.

 

 

Frank J. Del RioBase Pay $1,837,500Bonus + Incentive Comp $1,903,799Total Cash Compensation $3,741,299Stock Award Value $10,276,315Option Award Value $17,752,083Total Equity $28,028,398Total Other $140,651Total Compensation $31,910,348

 

You're apparently unable to comprehend that if service staff were paid more it would be you who would pay for it, not the company. When restaurants eliminate tipping and pay their wait staff a higher wage they raise the menu prices to pay for the higher wage. A cruise line that eliminates tipping would do the same. In fact for a variety of reasons including tax considerations that you've either chosen to ignore or don't understand, raising the base pay will cause prices to increase more than the wage increase.