Tips??? why dont they include them in fare...

[only1deejay]

So....here's a thought....since I gotta pay cruise fare and port taxes and all this before I board...why can't they include the daily tips also...so when I board I'm fully obligated to enjoy my cruise and only pay for the mini bar???

 

thanks.:) newbie.

[billco]

So....here's a thought....since I gotta pay cruise fare and port taxes and all this before I board...why can't they include the daily tips also...so when I board I'm fully obligated to enjoy my cruise and only pay for the mini bar???

 

thanks.:) newbie.

 

Why don't you just calculate the hotel charge and add it to your account up front. On the other hand, maybe it would be a good idea to have it included, then maybe people wouldn't weasel out of it.

[Cruisin' Chick]

If it really bugs you not to have the tips included, why not consider going on one of the premium lines? Some of those include the tips automatically.

 

I believe that there are some valid reasons why the mass market lines don't include them in their fare, but I'm not an accountant so I'm not completely sure. (travel agent commissions, income taxes for the crew, taxes for the cruiselines????)

[Putterdude]

I think the OP has raised and excellent question and indeed this is done with some cruises originating from countries where tipping is not the norm. In North America tipping is part of our culture and at least with the auto-tip you have the option to accept it, reduce it or increase it....regardless it is out there for us to see. IMO that I like to see it and know that, or at least hope, that the cruiseline is not in some way skimming what is going to the staff.

[donaldsc]

So....here's a thought....since I gotta pay cruise fare and port taxes and all this before I board...why can't they include the daily tips also...so when I board I'm fully obligated to enjoy my cruise and only pay for the mini bar???

 

thanks.:) newbie.

 

Because it would make the cruise appear more expensive that it will really cost. How often do you see an item priced at $99.97 instead of $100?

 

The cruise lines go on the correct assumption that you can fool some people some of the time and some people all the time.

 

DON

[njhorseman]

The single most important reason the US-based mass market cruise lines don't include tips/service charges in their fare is for marketing purposes. Excluding the tips allow the lines to advertise extremely low lead-in fares, in the hopes of attracting customers.

 

Other reasons that often cited here by and large aren't important. Travel agent commissions wouldn't have to be paid because the cruise line can just include the tip/service charge as past of the non-commissionable fare.

 

cruise line income taxes aren't an issue because corporate income taxes are paid on profits, not gross revenues. If you take in $100 for tips/service charge as part of the fare and then pay that $100 out to the crew as salary, it adds zero profit to the cruise line's balance sheet so incurs no corporate income tax liability.

 

The crew generally pays no US income taxes because they are for the most part not US citizens or residents and by law are considered to work in the country in which the ship is flagged, not the US. (The sole exception among major cruise lies is NCLA's Pride of America, which is flagged in the US, employs primarily US citizens, and sails solely within US waters in Hawaii.)

[John Bull]

IMHO, Don & NJ have hit the nail on the head.

 

I've heard all sorts of reasons (excluded from T/A commission - wow what a huge difference that would make :rolleyes:, cruise-lines don't have to pay crew wages for empty cabins, employment law, cruise-line & crew taxation, cost avoided if cruiser cancels, etc ad infinitum).

And IMHO they're all BS.

 

The krunch is keeping the headline ticket price artificially low.

If all cruise-lines included basic wages - sorry, basic tips - in the ticket price then it would not give one an unfair advantage over another.

And yes, billco, it would thwart the tightwads.

 

If adding wages (sorry, there I go again).... if adding tips on top of the ticket price goes down badly for an OP in Vegas, you can imagine the grief it causes for newbies on our side of the Pond who are used to service staff being paid a living wage & tips earned solely on merit, and especially for cruisers from down-under who have no tipping culture at all.

 

But I fear that pricing is actually going the other way, with non-US lines actually shifting toward auto-tips, some entertainment now at extra cost, more & more premium dining options.

How long before the included dining is just bread & cheese? :rolleyes::D

 

Good to see another thread on the subject, I was getting withdrawal symptoms cos the last thread was at least a week ago :D

 

JB :)

[DanJ]

You can just pre-pay the tips when you pay for the cruise and not have to worry about it later.

[Loonbeam]

Some factors for it in favor -

 

1> If the tips are added on ON Board (as Princess does), it means I don't have to spend that money until end of cruise as opposed to on final payment.

 

2> It doesn't count for trip insurance amounts since its refundable till day of cruise.

 

3> If the workers have employment contracts that base their fees on salary, its not necessarily counted.

[gerryl12]

The main reason cruise lines don't include gratuity charges in the price is the same reason airlines don't advertise airfares with fuel surcharges etc., IT SOUND LESS EXPENSIVE. It's called smart? marketing.

Also the cruise lines do not pay commission on the extra fees to the travel agents.

Also if a ship is not full or the gratuities are cut by some passengers then the staff gets paid less thereby keeping the costs down.

[irukandjisting]

Princess and P n O out of Australia do not have auto tips - you just tip at the end - normally your waiter if you dined in restaurant and cabin steward - and along the way - if you choose to you do.... but since we just hand over a cruise card to the waiter - Im not sure if that happens too much

 

Everyone seems to like to tip their waiter/s and cabin person on the last day... seems to be the norm...I can remember my father tipping same when I was small... how its always been here in Australia...

 

Easy as...

 

~~Iru~~

[antsp]

Just a thought, do you think sevice levels may fall from the crew if they knew there tips/hotel charge where already paid. Im not sure it would, but it may

[boogs]

 

It doesn't count for trip insurance amounts since its refundable till day of cruise.

 

 

If tips were included in the published price of the cruise, we'd pay for more that just the tips. As Loonbeam suggested, the cost of travel insurance would be higher because the cruise price would be higher. Plus, the taxes and fees would also be higher for the same reason. That $300 for tips added to the cruise fare could end up costing us as much as $350 - an additional $50 - just to cover those higher insurance costs and higher taxes and fees. This would be even more pronounced on longer cruises.

 

We'd get exactly the same end product, and wind up paying more for the privilege. Seems like we'd just end up throwing money away for nothiing.

[John Bull]

Just a thought, do you think sevice levels may fall from the crew if they knew there tips/hotel charge where already paid. Im not sure it would, but it may

 

 

I can understand your logic, antsp.

But we've sailed three UK-based cruise-lines with "tips included" ticket prices, and the standard of service has been excellent.

Perhaps because most folk, like us, also put their hands in their pockets for staff who go the extra mile - which most of them do.

 

I know it adds up to the same but on a US ship, when I pay tips as an add-on I resist putting my hand in my pocket again to reward excellence.

 

JB :)

[John Bull]

As Loonbeam suggested, the cost of travel insurance would be higher because the cruise price would be higher. Plus, the taxes and fees would also be higher for the same reason. That $300 for tips added to the cruise fare could end up costing us as much as $350 - an additional $50 - just to cover those higher insurance costs and higher taxes and fees. This would be even more pronounced on longer cruises.

 

 

Something seriously wrong with your maths there, boogs.:p

 

I just checked out a random travel insurance premium for a US couple. That premium increases for each $1000 price-band by around $20.

So including that $300 has a two-in-three chance of costing nothing extra, and a one-in-three chance of costing an extra twenty.

 

Remember, inclusive tips -and taxes/port fees - would only affect the cancellation & interruption elements of the travel insurance, not the other elements such as the most expensive part of insurance cover, emergency medical cover.

 

JB ;)

[paul929207]

So....here's a thought....since I gotta pay cruise fare and port taxes and all this before I board...why can't they include the daily tips also...so when I board I'm fully obligated to enjoy my cruise and only pay for the mini bar???

 

thanks.:) newbie.

Fine by me

[smeyer418]

fine with me too...

 

but it will cost you more to do so.

 

While its true that the cruise lines don't pay income taxes in the US there is a small gross tax(like a value added tax of 1/4 of 1%) and some countries Spain etc have started to collect value added taxes on cruise fares under certain conditions.

The way things work is that there is always a mark up to get money to the ship.

Public companies show profit margins on total income, a true pass through will decrease this slightly( the profit on 100 dollars of 10 dollars is a lower profit margin than 110 with 10 dollars profit)

finally as for commission, there is a very old agreement on what is commissionable or not. The cruise lines for a number of reasons don't want to reopen that agreement for new discussions....

and whether its in the fare or added later its you who pay it anyway. If it was in the fare how would you adjust it for bad service?

BTW as someone points out elsewhere there is NO evidence that either having it included in the fare(like Azamara among others do) has any real effect on service. Good service is more of a function of training, supervision and the individuals ethos anyway.

and if it was included in the fare do you really think that no tips would be expected?

[silentbob007]

I always fine sane, logical-based tipping threads interesting, especially with international perspectives. I agree that the low "entry" price is the key. I have to believe that there is some factor, though, about the "American" idea of tipping versus other ideas.

 

I had this discussion when visiting Australia and found it quite an interesting lesson in perspective. I would argue for tips not being included so that they would be based on merit ... an incentive to service with nothing taken for granted and an opportunity for increased (as well as decreased) tips based upon actual experience. The Australians would argue proudly that at least their workers were paid a "living" wage up front, with of course opportunity for more to be given as gratuity for exceptional service.

[navybankerteacher]

Just a thought, do you think sevice levels may fall from the crew if they knew there tips/hotel charge where already paid. Im not sure it would, but it may

 

This is certainly one reason. The concept of incentive pay makes sense particularly in a service, as opposed to production, environment. Cruisers pay for service -- having the right to adjust downward if service is poor, or upward by leaving extra tips, makes sense. Paying a "decent wage" regardless of quality of service would leave the lines much less room to control the quality of the "product" (service) which many of their customers seek.

[njhorseman]

fine with me too...

 

but it will cost you more to do so.

 

While its true that the cruise lines don't pay income taxes in the US there is a small gross tax(like a value added tax of 1/4 of 1%) and some countries Spain etc have started to collect value added taxes on cruise fares under certain conditions.

The way things work is that there is always a mark up to get money to the ship.

Public companies show profit margins on total income, a true pass through will decrease this slightly( the profit on 100 dollars of 10 dollars is a lower profit margin than 110 with 10 dollars profit)

finally as for commission, there is a very old agreement on what is commissionable or not. The cruise lines for a number of reasons don't want to reopen that agreement for new discussions....

and whether its in the fare or added later its you who pay it anyway. If it was in the fare how would you adjust it for bad service?

BTW as someone points out elsewhere there is NO evidence that either having it included in the fare(like Azamara among others do) has any real effect on service. Good service is more of a function of training, supervision and the individuals ethos anyway.

and if it was included in the fare do you really think that no tips would be expected?

 

A tax of 1/4 of 1% results in a grand total of 25 cents additional tax on a $100 increase in fare...utterly trivial.

 

Having owned a travel agency, I have no idea of what this mysterious agreement is covering what is commissionable. There have to be at least two parties to an agreement. Who do the cruise lines have this agreement with? There's no union or trade association of travel agents that negotiates commission agreements on their behalf. The cruise lines change commission structures all the time. If for some reason they couldn't include the service charge in the non-commissionable fare, they could offset it by a small decrease in overall commission rates.

[John Bull]

//.... Some countries spain etc have started to collect value added taxes on cruise fares under certain conditions...//

there's no vat on cruise fares or included extras, even in spain - under certain circumstances the spanish collect vat on drinks, spa treatments, shop purchases.

 

//... Public companies show profit margins on total income, a true pass through will decrease this slightly ....//

agreed there'd be a small decrease in the percentage np, due to the consequently-higher turnover. But profit is all about $, not %.

 

//... If it was in the fare how would you adjust it for bad service? ...//

i've seen folk flamed on this forum for removing/adjusting tips on account of bad service. The advice i've seen is always to complain / comment, rather than interfere with the tips which penalises the whole crew.

 

jb :)

[smeyer418]

A tax of 1/4 of 1% results in a grand total of 25 cents additional tax on a $100 increase in fare...utterly trivial.

 

Having owned a travel agency, I have no idea of what this mysterious agreement is covering what is commissionable. There have to be at least two parties to an agreement. Who do the cruise lines have this agreement with? There's no union or trade association of travel agents that negotiates commission agreements on their behalf. The cruise lines change commission structures all the time. If for some reason they couldn't include the service charge in the non-commissionable fare, they could offset it by a small decrease in overall commission rates.

the agreement is eons old. It was between a TA trade association and the travel industry in general. It would be if renegoitated an anti trust violation(its an agreement between parties on a money issue)...any change would open that up for government intervention. I don't even know if the trade association still exists.

People have been reporting that certain cruise lines for some European travel HAVE added VAT.

 

while the 1/4 of 1 % is small it does in fact add up witness that the cruise lines have been up to the US Supreme Court on how its calculated at least once...

[firefly333]

Because it would make the cruise appear more expensive that it will really cost. How often do you see an item priced at $99.97 instead of $100?

 

The cruise lines go on the correct assumption that you can fool some people some of the time and some people all the time.

 

DON

 

bingo

 

If one cruiseline did this, then their cruises in comparison to all the others that do not include tips would also appear more expensive.

[DanJ]

bingo

 

If one cruiseline did this, then their cruises in comparison to all the others that do not include tips would also appear more expensive.

 

One would think that Richard and Micky could get together and agree to this, since they basically control the cruising industry.

[LHT28]

Just a thought, do you think sevice levels may fall from the crew if they knew there tips/hotel charge where already paid. Im not sure it would, but it may

 

Back in the old days of HAL they had "NO TIPS REQUIRED" policy the service was just fine ...maybe better than when it was Carnivalized