Questions for recent Princess cruisers

[TRLD]

On 2/27/2024 at 12:16 AM, Titanfan22 said:

A few excerpts:

”Discretionary Hotel and Dining Charge Pool”

“Company makes no promise, guarantee, or commitment, and crew member he/she does not expect or anticipate payment by the Company of any compensation beyond the minimum wage guarantee”

”Each and every crew member also agrees to deliver any such volunteer passenger contribution he or she receives from any passenger under any circumstances into the pool immediately upon receipt of the contribution from the passenger”

”Each crew member agrees that the company reserves and has the exclusive right to determine, in it’s sole discretion, the eligibility and number of total crew members entitled to share in the pool”

These excerpts even more state that Princess has the “sole discretion” to run the program any way they want and reward or not reward employees at their discretion.  Also, please note, those cash gratuities are not going directly to the chosen employee (unless you can do it discreetly in private) without them having fear of reprisal.  
 

These, I’m sure, are very good jobs for most of these employees compared to what’s available in their home countries, however, they have no say in how this pool is administered or distributed.  There is no guarantee, per this contract, that all of the Crew Appreciation - automatic charge or cash - is going directly back to the employees as others have previously stated in this thread.

 

Thank you TRLD for sharing.  

First and most important point. The same reason that the option to remove exists is the same reason that one can know that all of the daily gratuity goes to the crew because it is one of the rules in the accounting regulations that allows it to be handled outside of the companies books and be neither revenue or expense. The two main rules as written by the FASB  are it must be adjustable by the customer AND it must be fully distributed to the crew members that are part of the pool. That is why one be certain that the daily gratuity goes to employees.

 

Not the same for 18% service charges. They are not adjustable. And as such are not considered gratuities under the regulations. Princess states that service charges also go into the pool, but that is outside of the regulation. Their distribution is normally under labor relations law, not accounting.

 

That is the language that must be there for the company to be able to meet the requirement under the accounting  regulations.

 

As far as the program management, pretty sure a lot of you have had employment contracts have seen similar language that is included to make sure that one can not sue because an employee did not like their bonus, or the payout. It also provides flexibility for the company to adjust to changes in business without having to change each contract.

 

The key point it what you extracted is that the amount from the pool is not salary, and the company does not make up shortfalls in the pool.

 

 

One should also read  

 

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.princess.com/html/global/disclaimers/crew-appreciation/&ved=2ahUKEwi1lOOIu8uEAxWhHUQIHbshBY8QFnoECAUQAQ&usg=AOvVaw2daQa1M6Cmchs82xH-awbR

 

Which is the customer facing description of the policy.

 

Especially the second paragraph.

 

They include the removal option because they have to. They, as they should, make that clear to their employees.

 

In the customer facing description they also make it clear that the cruise lines expectations are that there are other avenues to address service deficiencies first and that if one is still dissatisfied with service the option is adjust is there.

 

[TRLD]

On 2/27/2024 at 1:05 AM, dockman said:

page after page concerning amout of tips paid or not paid and why or why not and on and on and on....for the record i never opt out of auto tips and always give a few extra $$ here and there to those who go the extra mile to take care of me...

 

but rarely ever even a passing mention of how high port taxes have gotten in many ports around the world....and on many cruises it is more than the amount of the tips paid out...don't think you are allowed to opt out of port fees even if port gives lousy service they still get paid full amount with no options at all and often zero or very limited explanation of how the port fees are determined....do cruise lines keep any of the port fees or does the port get 100% of whatever is paid?

My understanding is that all port fees are pass through. From what I have seen anything charged as port fee/taxes by Princess is refunded if that amount is reduced. Have often gotten such credits added as on board credit. Have not seen any occasion where Princess has charged more after booking if fees have increased.

 

 

[TRLD]

On 2/26/2024 at 11:29 PM, Titanfan22 said:

One thing I noticed in the article:

 

”We will continue to allow people to remove gratuities if they wish. We know (because we ask the crew) how many tip in cash instead of the pre-paid amounts. I understand why many wish to do this,” he said. “It is important to remember that lots of people who do remove gratuities tip the same amount in cash or more even and that is wonderful.”

 

Seems like this would be pretty intimidating to employees from 3rd world countries that are desperate for work?

Including the language about lots of people who remove the gratuity tip in cash is a lot more public relations talk that saying that many that remove it  do so  to keep the money in their pocket and just still the crew. 

 

An employee speaking on behalf of the cruise line can think the later but certainly can not say it.

[TRLD]

Kind of surprising, though actually not, with the quotes of some sections of document of legalese boiler plate and the definition of gratuities, that certain elements such as the standard 70 hour work week was not mentioned. Or the articles indicating a total income of both salary and pool allocation in the area of 2000 per month or around $7 per hour. 

 

 

Edited February 27 by TRLD

[Bgwest]

12 hours ago, TRLD said:

Here are links to 2 examples of Princess employee contract language and terms and conditions.

The paragraph 4 e reference is selected from the first. In the second it is discussed in paragraph 5 I believe.

 

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=http://www.inozemstvo-posao.com/forumattachments/02-Terms_%26_Conditions_of_Employment.pdf&ved=2ahUKEwjGvKuGu8qEAxX0_8kDHeWqBbA4ChAWegQIChAB&usg=AOvVaw2e9vhhTZF1pD1E0mXIwTr-

 

https://docplayer-net.cdn.ampproject.org/v/s/docplayer.net/amp/44218718-Employment-contract-princess-cruise-lines-ltd.html?amp_gsa=1&amp_js_v=a9&usqp=mq331AQIUAKwASCAAgM%3D#amp_tf=From %1%24s&aoh=17089993325557&referrer=https%3A%2F%2Fwww.google.com&ampshare=https%3A%2F%2Fdocplayer.net%2F44218718-Employment-contract-princess-cruise-lines-ltd.html

Well done, Sir. Nevertheless, none of this alters the basic premise that cruise lines have concocted a scheme (some would call it a scam) whereby they are (some would call it cleverly) moving what is their responsibility to pay their own employees a living wage over to their customers under the guise of "crew appreciation".

Good grief, just pay your people a decent wage (like I do with my employees) and fold the remainder of your obligation into the basic cruise fare.

Enough with the smoke and mirrors. 

[Bgwest]

I clearly let my typing fingers get ahead of my brain and erred in my earlier question. For clarity, I've edited that question. 

Has anyone else noticed that suddenly everyone has become an expert in US accounting standards and how they relate to cruise lines operating both in and out of US waters?

SMH

 

[Bgwest]

13 hours ago, TRLD said:

Here are links to 2 examples of Princess employee contract language and terms and conditions.

The paragraph 4 e reference is selected from the first. In the second it is discussed in paragraph 5 I believe.

 

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=http://www.inozemstvo-posao.com/forumattachments/02-Terms_%26_Conditions_of_Employment.pdf&ved=2ahUKEwjGvKuGu8qEAxX0_8kDHeWqBbA4ChAWegQIChAB&usg=AOvVaw2e9vhhTZF1pD1E0mXIwTr-

 

https://docplayer-net.cdn.ampproject.org/v/s/docplayer.net/amp/44218718-Employment-contract-princess-cruise-lines-ltd.html?amp_gsa=1&amp_js_v=a9&usqp=mq331AQIUAKwASCAAgM%3D#amp_tf=From %1%24s&aoh=17089993325557&referrer=https%3A%2F%2Fwww.google.com&ampshare=https%3A%2F%2Fdocplayer.net%2F44218718-Employment-contract-princess-cruise-lines-ltd.html

Also, I failed to ask earliler, can you point us to the publication dates of these documents. Try as I may I just cannot determine the age of this information as I read through it. It may very well just be a case of my old tired eyes failing me. If that is the case, I apologize for my visual shortcomings. 

[TRLD]

On 2/27/2024 at 11:31 AM, Bgwest said:

Also, I failed to ask earliler, can you point us to the publication dates of these documents. Try as I may I just cannot determine the age of this information as I read through it. It may very well just be a case of my old tired eyes failing me. If that is the case, I apologize for my visual shortcomings. 

Based upon the language both are within the last 7 years. The second appears to be within the last 3. I included the first because it is easier to read and for all practical not much as changed.

 

The only way to get an actual publication date is to get a hold of the signature page of the contract which is usually not included for privacy purposes. I have seen one a couple of times during past searches with the names blacked out. Will see if I can find one of those.

[TRLD]

On 2/27/2024 at 11:14 AM, Bgwest said:

Well done, Sir. Nevertheless, none of this alters the basic premise that cruise lines have concocted a scheme (some would call it a scam) whereby they are (some would call it cleverly) moving what is their responsibility to pay their own employees a living wage over to their customers under the guise of "crew appreciation".

Good grief, just pay your people a decent wage (like I do with my employees) and fold the remainder of your obligation into the basic cruise fare.

Enough with the smoke and mirrors. 

If I was home using my home computer it would take me about 2 minutes to put together the numbers on difference to passengers. Being on board it will take me about 30 minutes if I get the chance.

 

Rolling the gratuity into the fares would cost passengers more money with all other things being equal than the current system.   Somewhere between 2 to 4% based upon calculations I have done in the past if the company were to maintain the same margin on operations under a no daily charge system. The other major benefit (keep in mind that either way the customer pays either directly in the fare before the cruise or indirectly at the end of the cruise in the daily charge) is that it makes some of the normally fixed costs into variable costs. Providing some risk reduction in case of a period with lower occupancy)

 

The impact on crew would require looking at each country tax and retirement systems. Some would have little impact some would result in more taxes (income and/or retirement) based upon their country of residence.

 

Since the recruiting firms often base their fees as a percentage of the guaranteed wage some crew might face additional costs there.

 

Probably the biggest hurdle is competition. Not only with other cruise lines, but other travel options as well  For one NA focused mass market cruise line to make a change one would need all of their competitors to make a similar change, and get rid of resort fees land based resorts.

[pennib]

Hi from the UK. We are doing our first Princess cruise later this year and are really interested in the comments made by people from across the pond. Someone mentioned Marella. We like them. They include all tips even in their entry level package. We are happy about this and always give extra tips at the end of the cruise to people who have “gone the extra mile “. We in the Uk have a different attitude to those of you across the pond. Someone else mentioned MSC. We have done several trips with them but once you have been in the Yacht Club you won’t want to go ordinary unless you like Italians and screaming Italian kids!!

we are looking forward to Princess and the cruise is coming in less than Marella!!

[MacMadame]

6 hours ago, Bgwest said:

Has anyone else noticed that suddenly everyone has become an expert in US accounting standards and how they relate to cruise lines operating both in and out of US waters?

SMH

Not everyone, just one person. And, based on the Accounting class I took when I was working on an MBA, they are correct.

[TRLD]

Took a look at the last 10k. The difference drops a bit with the recent year compared the previous year. There were 91.4 million passengers on all CCL Using that to determine the various values per passenger per day across the lines. While not all lines are following the gratuity model. I do have data at home that does break down revenue market share, but do not have time to track that down while on a cruise.

 

Current values PP PD

Ticket Revenue 153.90

On board and other revenue 82.34

Total revenue 236.24

 

Total gratuity contribution (ignoring higher level for suites)

1,462,400,000. Of course this would be across all CCL lines, the real number is lower by the percentage of passenger days that are in lines not under the gratuity system. Probably about 20% making the real number more like 1.170 billion.

 

The following are not part of this debate but I am including them because they are interesting on a per person per day basis that some might find interesting.

 

Fuel expense  22.39

Food  14.61

Payroll  25.96

 

Payroll is interesting in that it includes all personnel, far more than those on the hotel side that are part of the pool.

 

The operating margin under the current system is 9%. If one increases revenue by 16 per day and expense by the same amount operating margin drops to 8.5%. To get it back to 9% revenue would need to increase by 1 dollar more.

 

That means after converting to a no gratuity system the numbers would be 

 

Fare  170.90

on board 82.34

total per passenger revenue 253.24

 

Payroll 41.96 per passenger per day

 

Since this is now required in advance of the cruise  there is also an impact on the cost of travel insurance. Using the lower value of the normal 5 - 6% of trip costs that would be an increase of about 85 cents per day of the fare. Also since payment of the additional amount is required atleast 90 days in advance there is an opportunity cost of the 3 months of about 34 cents per day. Resulting is a total increased cost of about $2.19 per day over the 16 dollar gratuity cost. Now the exact impact on any one passenger as a percentage would vary quite a bit by cabin category.

 

Not a huge increase , but still more than what one pays today if everything else was equal.

 

 

Edited February 28 by TRLD

[Titanfan22]

12 hours ago, TRLD said:

First and most important point. The same reason that the option to remove exists is the same reason that one can know that all of the daily gratuity goes to the crew because it is one of the rules in the accounting regulations that allows it to be handled outside of the companies books and be neither revenue or expense. The two main rules as written by the FASB  are it must be adjustable by the customer AND it must be fully distributed to the crew members that are part of the pool. That is why one be certain that the daily gratuity goes to employees.

 

Not the same for 18% service charges. They are not adjustable. And as such are not considered gratuities under the regulations. Princess states that service charges also go into the pool, but that is outside of the regulation. Their distribution is normally under labor relations law, not accounting.

 

That is the language that must be there for the company to be able to meet the requirement under the accounting  regulations.

 

As far as the program management, pretty sure a lot of you have had employment contracts have seen similar language that is included to make sure that one can not sue because an employee did not like their bonus, or the payout. It also provides flexibility for the company to adjust to changes in business without having to change each contract.

 

The key point it what you extracted is that the amount from the pool is not salary, and the company does not make up shortfalls in the pool.

 

 

One should also read  

 

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.princess.com/html/global/disclaimers/crew-appreciation/&ved=2ahUKEwi1lOOIu8uEAxWhHUQIHbshBY8QFnoECAUQAQ&usg=AOvVaw2daQa1M6Cmchs82xH-awbR

 

Which is the customer facing description of the policy.

 

Especially the second paragraph.

 

They include the removal option because they have to. They, as they should, make that clear to their employees.

 

In the customer facing description they also make it clear that the cruise lines expectations are that there are other avenues to address service deficiencies first and that if one is still dissatisfied with service the option is adjust is there.

 

Thank you for the summary.  While it must be distributed to the employees, it certainly states they can give or not give to certain employees at their discretion?

[TRLD]

On 2/27/2024 at 9:22 PM, Titanfan22 said:

Thank you for the summary.  While it must be distributed to the employees, it certainly states they can give or not give to certain employees at their discretion?

Your interpretation is looking at one extreme. Boiler plate often says that a company to do lots of things to protect the company. In reality is usually much simpler. Out of the total collected in the gratuity pool most goes out in consistent payments based upon position. As Princess states a percentage is used for bonuses for members in that same pool. While clearly not all would get the same bonus. The compensation payment are not applied to or withheld at the individual levels. After all if it were it is rather unlikely that any of those employees would remain with the cruise or for that matter any company.

 

Pretty much the same as the boiler plate indicates that the cruise line has the right to do all kinds of things concerning the passengers without recourse.

Edited February 28 by TRLD

[Titanfan22]

3 minutes ago, TRLD said:

Boiler plate often says that a company to do lots of things to protect the company. In reality is usually much simpler. Out of the total collected in the gratuity pool most goes out in consistent payments based upon position. As Princess states a percentage is used for bonuses for members in that same pool. While clearly not all would get the same bonus. The compensation payment are not applied to or withheld at the individual levels. After all if it were it is rather unlikely that any of those employees would remain with the cruise or for that matter any company.

 

 

I appreciate your contribution to the conversation. You are very knowledgeable and have either worked for the cruise lines or have been associated with them for some time.  Or, you have way, way too much free time on your hands!

[Titanfan22]

12 hours ago, TRLD said:

Kind of surprising, though actually not, with the quotes of some sections of document of legalese boiler plate and the definition of gratuities, that certain elements such as the standard 70 hour work week was not mentioned. Or the articles indicating a total income of both salary and pool allocation in the area of 2000 per month or around $7 per hour. 

 

 

This is a shame but I’m sure common for the industry.  A 70 hour work week, with I’m sure splits shifts for a lot of them, for average of $7 per hour with the generous tips from the passengers included.  
 

Maybe this guy and some of his other executives should consider revenue sharing with the poor people.  The gratuity supplements the wages as these fat cats score big:

 

Carnival Corporation & Management

Management criteria checks 3/4

 

 

 

 

Carnival &'s CEO is Josh Weinstein, appointed in Aug 2022, has a tenure of 1.5 years. total yearly compensation is $13.81M, comprised of 9.1% salary and 90.9% bonuses, including company stock and options. directly owns 0.012% of the company’s shares, worth $2.29M. The average tenure of the management team and the board of directors is 6.5 years and 7.6 years respectively.

Key information

 

Josh Weinstein

Chief executive officer

 

US$13.8m

Total compensation

ceo salary percentage	9.1%
ceo tenure	1.5yrs
ceo ownership	0.01%
management average tenure	6.5yrs
board average tenure	7.6yrs

Recent management updates

Carnival Corporation & plc, Annual General Meeting, Apr 05, 2024

Feb 25

Carnival Corporation & plc, Annual General Meeting, Apr 05, 2024

Feb 24

CFO & Chief Accounting Officer recently sold US$2.4m worth of stock

Feb 21

CFO & Chief Accounting Officer notifies of intention to sell stock

Feb 15

Board Member recently bought US$1.2m worth of stock

Oct 25

Carnival Corporation & plc Appoints Paul Ludlow as President Carnival UK

May 31

 

Show all updates

[TRLD]

On 2/27/2024 at 9:41 PM, Titanfan22 said:

I appreciate your contribution to the conversation. You are very knowledgeable and have either worked for the cruise lines or have been associated with them for some time.  Or, you have way, way too much free time on your hands!

Nope have never worked for cruise lines, but have worked at the senior VP level at the fortune 500 level of companies. 

 

Looking into why a company does what it does is fun.