Tips removed while onboard

[GUT2407]

If this spreads I wonder how long till the "Tip police" start accusing people of stiffing the crew for not tipping extra again.

 

Probably not long.

[Mparis184]

I leave the tips on my account and always tip additional cash at the end of the cruise,

 

Marion

[grandgeezer]

I never understand why people get so worked up over the "tip vs gratuity vs service charge" vocabulary.

 

Does it matter if you pay:

1. $2000 cruise fare
   
2. $1800 fare + $200 gratuity = $2000
   
3. $1800 fare + $200 tip = $2000
   
4. $1800 fare + $200 service charge = $2000
   

 

Is the concern simply the extra use of printer toner needed to print out the itemization of the charges? 'Cause that's really the only thing I can see different from the pricing displayed above.

 

However in reality, option #1 would become $2100 rather than $2000, costing us $100 more, if they included the amount in the fare, as they would have additional costs to consider internally and taxes to be paid on the revenue in some jurisdictions that wouldn't be due if the Gratuity is itemized out as a separate charge, that can be sheltered from Gross Revenue tax schemes.

 

Everyone basically says the same thing, pay staff appropriately, (and again what do we care if the ship pays them $10 an hour and no tips or $50 a month plus the tips - to the staff it is the same end of the day) I don't remove tips etc. So what does it matter if the pricing is just displayed using different vocabulary words that are essentially synonyms these days?

 

For a large business entity, "variable costs" and "variable revenues" you can have versus fixed pricing schemes help make business decisions be simpler, budgets and forecast more accurate etc. So keeping tips as an add-on itemization, lets them operate their business far more smoothly in times of ebb and flow of occupancy, and changing labor standards.

 

Why don't they call a spade a spade? I can find nowhere where their practice of collecting a pre determined amount amount of money even resembles the definition of tip or gratuity. When you are told how much, and prepay it if you have Select dining, it's a service charge. It doesn't make a difference in total price but they should be honest on what it is.

Tips, gratuities and service charge are in no way synonyms of each other, by definition.

[Chazteach1]

I think some people think the crew gets paid amply. I am still shocked by a woman who told me that she ate at the buffet every night because she didn't pay tips!:eek: Who did she think served at the buffet?

 

We pay gratuities up front on every cruise, and then it is done with. We give more at the end as others have said, for great service. These people on cruise ships work hard far away from their families and pay a huge personal price for their jobs.

 

I agree that Celebrity should just make it part of the cruise fare and document it as such.

 

 

I agree.

 

It's as simple as being appreciated. I'm a teacher and just yesterday I had a student come up to me at a restaurant and say hello, gave me a hug and he graduated from the elementary school 10 years ago and remembered me. I work for these kinds of tips. Crew on cruise ships want appreciation in the form of cash!

 

Leave the grats on and tip well for great service!

[LabGuy64]

If no one can cancel the tips....what incentive is there to provide good service? other than possibly the worry that they won't get the additional tips so many feel obliged to give

 

 

 

Good move NCL. Cheap skates won't like this, but if you don't want to tip accordingly cruising is not for you.

[LabGuy64]

Curt....if they took the money....then said NO more tipping was allowed...then yes i would agree with you. but, as tipping is so ingrained into American culture it makes some feel very uncomfortable to not tip in a situation that they normally would....even if there has been money paid upfront to handle gratuities.

 

 

Why don't they call a spade a spade? I can find nowhere where their practice of collecting a pre determined amount amount of money even resembles the definition of tip or gratuity. When you are told how much, and prepay it if you have Select dining, it's a service charge. It doesn't make a difference in total price but they should be honest on what it is.

Tips, gratuities and service charge are in no way synonyms of each other, by definition.

[RDC1]

Isn't that also an argument for including them in the fare.

 

Or are people o stupid to do those sums?

 

The difference is that if it is added into the fare then it also becomes part of the calculation for travel insurance meaning that the travel insurance will go up by a percentage of the amount.

 

From the cruise lines point of view they then become part of the cruise lines finances and potentially impact the amount of taxes/fees paid.

 

Depending upon the contract with recruiters it could also raise the cost of that services.

 

I would expect that if you added into the cost of the fare, the fare would not just go up by X (X being the total of service charges) but more likely by 1.10X to 1.15X assuming that one purchases travel insurance.

 

That doesn't even get into the use of the funds in performance programs and potential impact on quality of service.

Edited September 16, 2015 by RDC1

[julia]

I have never asked to have tips removed' date=' and I never will. IMO, the crew bend over backwards to give me a wonderful vacation, and I tip them! That being said, some others feel differently.

 

This thread is not meant to be a debate about tipping. There has been plenty of that in the past. I simply want to bring a news flash to your attention, which NCL just implemented. We sail on NCL when we embark from New York.

 

 

And yet, that is EXACTLY what it turned into! :eek: :confused:

Sigh.....

[GUT2407]

The difference is that if it is added into the fare then it also becomes part of the calculation for travel insurance meaning that the travel insurance will go up by a percentage of the amount.

 

 

Must be different where you are than here, or we're using different insurers, I have never been asked how much pad, all they want to know is where I'm going and for how long.

 

From the cruise lines point of view they then become part of the cruise lines finances and potentially impact the amount of taxes/fees paid.

 

That's just crazy, they get a deduction for what they pay out, so unless they are pocketing some it should make no difference to their tax position, they still collect the money now anyway, if that argument had any merit the same would apply regardless of them collecting the grats beore, durting or after the cruise.

 

Depending upon the contract with recruiters it could also raise the cost of that services.

 

Well change the contract with the recruiters.

 

I would expect that if you added into the cost of the fare, the fare would not just go up by X (X being the total of service charges) but more likely by 1.10X to 1.15X assuming that one purchases travel insurance.

 

And there is no good reason why that should be the case.

 

 

That doesn't even get into the use of the funds in performance programs and potential impact on quality of service.

 

Why? The line still collects the funds, they can do with it as they will.

[donaldsc]

I basically agree with this although I would prefer that they just pay the crew properly. The one change that I would suggest however is that you can reduce or eliminate tips while on board but you must meet with the Guest Services Manager, discuss your issues and give them a chance to make it right before you are allowed to do it. This would eliminate most of the cheapskate tip reductions as most of these people would not be able to come up with good reasons to avoid the tips.

 

DON

[grandgeezer]

I basically agree with this although I would prefer that they just pay the crew properly. The one change that I would suggest however is that you can reduce or eliminate tips while on board but you must meet with the Guest Services Manager, discuss your issues and give them a chance to make it right before you are allowed to do it. This would eliminate most of the cheapskate tip reductions as most of these people would not be able to come up with good reasons to avoid the tips.

 

DON

 

I disagree. Everybody's definition of acceptable service is different. Unless it is defined, you are going to give the guest Services Manager, who works for the cruise line, the final say? If you decided to lessen or eliminate the service charge (I refuse to call it a tip), the damage has been done. I have no problem talking to the Manager but I should have the final say on what the final outcome is, I'm the one paying. Again, I have never lessened or removed the service charge but I should have the right to do so if I see fit. Add it to the cruise price and this all goes away. They add the entertainment and food cost to it why not this?

[brfan]

If no one can cancel the tips....what incentive is there to provide good service? other than possibly the worry that they won't get the additional tips so many feel obliged to give

 

What's the incentive for the salaried staff (eg. activities, guest services, etc) to provide good service? Why do people assume service people lack any kind of work ethic and need a carrot on a stick (tip) to do a good job, but salaried people can provide good service without that incentive?

 

I believer that the current tipped crew will continue to provide good service because they take pride in their work and want to continue to work so they can support their families. Plus they want to provide good service in order to get a good report on the cruise evaluation so they will be assured of a new contract and possible promotions, better assignments, etc.

 

Will there be bad service at times, of course. They're people not robots, we all have bad days. Plus there will always be a few that may not be suited to a service job, but bad evaluations will quickly weed those out.

[Ontario Cruiser]

It's about time Good for NCL. I am so tired of hearing people say that they took off the tips. Many of them don't even give cash tips of any amount.

Ontario Cruiser

[Iamcruzin]

Tips are an extra payment for good/exceptional service, if you aren't getting it why should you reward someone for not doing their job? Before you get your undies in a bundle, we've have never reduced/removed tips on any of our 39 cruises, but I want the option if it so arises. Add it to the fare and it eliminates the decision. Make it a service charge that is included in the fare and market it as such.

 

Like food and entertainment good or exceptional service is subjective. If gratuity is added to the fare you have no recourse for bad service plus you are now being taxed on the additional cost of the cruise. In reality how many times has anyone had truly bad service? If they have it is usually only from one individual. Why should the rest of the staff suffer. Gratuity has always been a part of cruising even back in 1986 on my first cruise. If people don't want to accept that it's part of cruising then they should find another vacation alternative. I'm not a fan of NCL but in this case I think it's a good move. They have found the loophole for collecting gratuity while still allowing the passengers recourse. Only those who have had really bad service and are truly dissatisfied will make the call after the cruise. It weeds out the cheapskates.

[melsuli]

Coming from the UK I see a chasm of difference between a service/cover charge and tips.

 

One is compulsory the other is not.

[sollan]

A different point, but related I think. There are many Brits who have trouble getting the heads around tipping a minimum of 15% in a restaurant in the US irrespective of service. They don't get that the system is entirely different to that in the UK where wait staff are paid a proper wage and a tip is a discretionary bonus given for good or great service. Having travelled to the US a great deal over nearly 30 years, I know that service is paid for seperately, to what is paid to the restaurant for food and amenities, because the staff are only paid a small retainer to work there. Based on the British model, gratuities for Ship personel would not need to be included in the fare if the personel were paid decent salaries. Either way it would be added onto the cruise fare.

 

Under the current system, I don't think cruisers should have the option of removing or reducing tips because some don't realise how low the salaries are and that tips are relied upon as part of the personal's income. Some of course are just mean and lack compassion. That isn't a good reason to remove them either!

 

There are not only Brits that are confused.... :D

[RDC1]

Must be different where you are than here, or we're using different insurers, I have never been asked how much pad, all they want to know is where I'm going and for how long.

 

 

 

That's just crazy, they get a deduction for what they pay out, so unless they are pocketing some it should make no difference to their tax position, they still collect the money now anyway, if that argument had any merit the same would apply regardless of them collecting the grats beore, durting or after the cruise.

 

 

 

Well change the contract with the recruiters.

 

 

 

And there is no good reason why that should be the case.

 

 

 

 

Why? The line still collects the funds, they can do with it as they will.

 

When you get travel insurance through the cruise lines the prices are a percentage of cruise fare.

 

Every time I have purchase travel insurance, I have always had to specify the amount of coverage.

 

Would like to know where you get travel insurance and the fee is independent of trip cost.

 

As far as costs, it is not quite as simple of everything paid out being a deduction. You can have timing issues with revenue recognition and pay out periods. For example depending upon exactly how the cruise line recognizes revenue when you consider the timing of full payment dates being 75 days before the cruise. You then have the revenue coming about 3 months before the expense. That means when you cross fiscal years you have two to three months of the fees as additional revenue without a corresponding expense and would be additional income. That would less impact in future years with the impact being only the amount of business increase, but still an increase.

 

Also keep in mind that in many countries there are additional taxes tied to payroll payments that are not tied to tips. Using the US as an example payroll is subject to social security which means additional costs to the company (around 7.5% by the company and 7.5% by the employee) While the ship based employees are not subject to US payroll laws many other countries have similar rules. Gratuity payments to employees often do not fall under such requirements. The workers might still have to make payments when they pay whatever national taxes they have to, but the company does not. Would be interesting to find out the rules they are under for processing payroll for ship based workers. That would then allow one to model how much the costs might go up with a change.

 

There are all kinds of reasons why costs are less processing it as qratuities/service charges and not running it through payroll as salary.

 

 

As far as contracts it is still a change that would have to be negotiated and one that would be different from their competition.

 

The bottom line is the current system works for them. It is pretty much the same system their competitors use and it allows them to price competitively with their competition. Very unlikely it will change for one, unless all of their competition changes.

Edited September 16, 2015 by RDC1

[RocketMan275]

I basically agree with this although I would prefer that they just pay the crew properly. The one change that I would suggest however is that you can reduce or eliminate tips while on board but you must meet with the Guest Services Manager, discuss your issues and give them a chance to make it right before you are allowed to do it. This would eliminate most of the cheapskate tip reductions as most of these people would not be able to come up with good reasons to avoid the tips.

 

DON

 

What do you mean by the phrase "pay the crew properly"?

[cle-guy]

 

As far as costs, it is not quite as simple of everything paid out being a deduction. You can have timing issues with revenue recognition and pay out periods. For example depending upon exactly how the cruise line recognizes revenue when you consider the timing of full payment dates being 75 days before the cruise. You then have the revenue coming about 3 months before the expense. That means when you cross fiscal years you have two to three months of the fees as additional revenue without a corresponding expense and would be additional income. That would less impact in future years with the impact being only the amount of business increase, but still an increase.

 

RCL just changed their revenue recognition policy last year.

 

They used to recognize revenue at the end of each cruise for the activities on that cruise, now they recognize it on a daily basis.

 

Until the cruise begins, all payments made remain on the Balance Sheet as an Advanced Billings liability account, and have no impact on the Income Statements or taxable income. So this means there are no issues with crossing fiscal years.

[Priya2]

What do you mean by the phrase "pay the crew properly"?

I'm guessing he means a living wage!

[RDC1]

RCL just changed their revenue recognition policy last year.

 

They used to recognize revenue at the end of each cruise for the activities on that cruise, now they recognize it on a daily basis.

 

Until the cruise begins, all payments made remain on the Balance Sheet as an Advanced Billings liability account, and have no impact on the Income Statements or taxable income. So this means there are no issues with crossing fiscal years.

 

Thanks. I did not have their revenue recognition policy. I was just using that as an example of what kind of complexities a company can encounter. Which is why I qualified my comment indicating that depending upon their revenue recognition policy they could run into something like that. There are other complexities that make it less then a all money paid out is deductable situation. Especially with a large multinational, dealing with different regulations based upon their corporate HQ, their personnel locations, their personnel residency, etc.

 

I suspect a major potential for expense is still the payroll tax issue. For example before anyone comments about my using US as an example. Here is an example using Bermuda.

 

Bermuda does not have an income tax.

Bermuda does have a payroll tax which is actually levied on the

employer. This is a tiered tax that is calculated based on the total

annual remuneration paid out to the employees. It can be as high

as 14 percent for those companies whose total payroll size is

over 1M Bermuda dollars (BMD), and as low as 5.75 percent for

approved schools, colleges and other government and religious

bodies. Payroll taxes are to be paid out annually by the employer at

the *time of tax returns.

 

If they have to deal with individual countries then even the Philippines has a social security system:

 

The Philippines’ Social Security System (SSS) is designed to provide protection against the hazards of disability, sickness, maternity and old age. It is the responsibility of the employer to deduct SSS contributions from the employee’s salary and remit it monthly. Both the employee and employer are required to make contributions based on the employee’s salary, and employees can make voluntary contributions of an additional amount on top of the mandatory contribution.

 

Now it is less clear if they can route payroll through Liberia, and have everyone they pay not be a resident of Liberia. Basically a cruise line incorporated in Liberia, but not doing any other business in Liberia, and has one of more vessels registered in Liberia is considered non-resident for tax purposes. Since they are not doing any other business in Liberia then I would suspect that their payroll is not being processed under Liberian rules.

 

It would interesting to find out exactly under whose rules their payroll is processed.

Edited September 16, 2015 by RDC1

[SantaFeFan]

I disagree. Everybody's definition of acceptable service is different. Unless it is defined, you are going to give the guest Services Manager, who works for the cruise line, the final say? If you decided to lessen or eliminate the service charge (I refuse to call it a tip), the damage has been done. I have no problem talking to the Manager but I should have the final say on what the final outcome is, I'm the one paying. Again, I have never lessened or removed the service charge but I should have the right to do so if I see fit. Add it to the cruise price and this all goes away. They add the entertainment and food cost to it why not this?

 

And how many posts have you read here about the deterioration of entertainment and food quality on these boards? Dozens, if not hundreds. THAT is what will happen if the gratuities are rolled into the fare cost. There are be people who are unhappy now about the food and entertainment, and there will be people who will now be unhappy about the service they "paid" for. The complaints will still come.

 

It is impossible to make everyone happy. The current system of gratuities is satisfactory for the vast majority of people. It is only people from certain demographics that can't make peace with it.

Edited September 16, 2015 by SantaFeFan

[cle-guy]

Thanks. I did not have their revenue recognition policy. I was just using that as an example of what kind of complexities a company can encounter. Which is why I qualified my comment indicating that depending upon their revenue recognition policy they could run into something like that. There are other complexities that make it less then a all money paid out is deductable situation. Especially with a large multinational, dealing with different regulations based upon their corporate HQ, their personnel locations, their personnel residency, etc.

 

I suspect a major potential for expense is still the payroll tax issue. For example before anyone comments about my using US as an example. Here is an example using Bermuda.

 

Bermuda does not have an income tax.

Bermuda does have a payroll tax which is actually levied on the

employer. This is a tiered tax that is calculated based on the total

annual remuneration paid out to the employees. It can be as high

as 14 percent for those companies whose total payroll size is

over 1M Bermuda dollars (BMD), and as low as 5.75 percent for

approved schools, colleges and other government and religious

bodies. Payroll taxes are to be paid out annually by the employer at

the *time of tax returns.

 

If they have to deal with individual countries then even the Philippines has a social security system:

 

The Philippines’ Social Security System (SSS) is designed to provide protection against the hazards of disability, sickness, maternity and old age. It is the responsibility of the employer to deduct SSS contributions from the employee’s salary and remit it monthly. Both the employee and employer are required to make contributions based on the employee’s salary, and employees can make voluntary contributions of an additional amount on top of the mandatory contribution.

 

Now it is less clear if they can route payroll through Liberia, and have everyone they pay not be a resident of Liberia. Basically a cruise line incorporated in Liberia, but not doing any other business in Liberia, and has one of more vessels registered in Liberia is considered non-resident for tax purposes. Since they are not doing any other business in Liberia then I would suspect that their payroll is not being processed under Liberian rules.

 

It would interesting to find out exactly under whose rules their payroll is processed.

 

The other thing that comes into play is the call to pay staff "A living wage". Who decides what this is? Does it mean food clothing and shelter? In that case, no need to pay any cruise ship employee a dime.

 

Do we use the US and its $7.85 minimum wage? Or do we follow Australia and its AUD$15 min wage? Or maybe follow Egyptian pay standards and pay the equivalent of $200 USD a month. Or the UK's GBP 6.70? A lot of staff are Croatian, do we pay them their monthly minimum of $452 USD?

 

And each country has different taxes some higher some lower, how doest that factor in. SO some have high taxes low take home, but the government subsidizes lots for them, so their actual cost of living is lower versus me in the US here I don't get all those subsidies or gas, bread, food etc.

 

All cruise lines can do is put out an offer of employment, and let people know the pay scale, and let people decide if they will accept the pay scale. Looking at where lots of the staff come from, even getting a flat $50 per week and no tips is as good or better than working at home.

 

I think I recall reading along the way that maritime laws have different rules for pay and taxation - for these very reasons - but I can not locate where I got that info from.

Edited September 16, 2015 by cle-guy

[RDC1]

I'm guessing he means a living wage!

 

For most of the countries where the crew are from their base salary is a living wage. Their extra from gratuities make it a great income for their countries.

 

Keep in mind that when it comes to third world countries the numbers are quite low. For example minimum wage in the Philippines is $2 per day (not hour). According to World Bank the GNI per capita was $2577 per year calculated using the Atlas method. The US department of Labor calculates the median salary there being $7,660.8 per year (or $638 per month).

[POA1]

Would like to know where you get travel insurance and the fee is independent of trip cost.

 

Ironically, Carnival. They have flat rate cruise insurance.