Tips included in cruise fare, and reasons why not?

[davecttr]

I don't know the details about financial issues behind the scenes but I do know that including tipping in the fare works. I have cruises with 2 lines, 18 cruises each, P&O and Thomson. P&O have a daily gratuity charge which can be changed or removed and Thomson include the tips in the fare. Neither can be considered a luxury line and the essential difference is Thomson have smaller older ships.

 

Does including tips in the fare impact on the passenger experience? As far as I am concerned no. I don't notice any significant difference in the fares, if anything Thomson are lower. The onboard experience is just as good and the crews are happy, efficient and friendly. Any issues you might have with an individual crew member are sorted out by the management procedures that are in place, just like any organisation that does not have tipping. The crew have good reason to be happy, they get their guaranteed salary and they get to keep any money given by passengers.

 

Cultural differences play a part. Here in the UK we have less of a tipping culture so it comes as a shock to some passengers. there are also attempts to move away from having 'hidden extras' in the cost of items and the up front total price should be what you pay. The cruise lines of course think having to increase the headline price is bad for business but obviously not for Thomson who are expanding their fleet.

 

ps - The 'tips' on Thomson are not itemised on the bill and there is no way of knowing what they are!.

[sparks1093]

I had a thought when I was responding to your poll and I don't know if it's been discussed but I know for me personally I probably would not tip extra if the tips were included (which I will now if the service warrants it), so with the tips not included in the fare the crew has the opportunity at least to receive extra tips when people add them (which may be why they are happy with the status quo).

[BruceMuzz]

So along the lines of tipping being included, does anyone know how things operate on the NCL Pride of America for the tipped crew working on a US registered ship?

 

Presumably the crew cannot hide their tips from their tax return as the cruise ship will have a record of them?

 

NCL's one ship also has to abide by US labor laws and pay. The ship is obviously still profitable, I'm sure not as profitable as their other ships, and they manage to meet these requirements.

 

ex techie

 

Short story: The American crew must be paid a minimum wage, and they receive tips on top of that. They must pay income taxes on both.

 

The payroll for Pride of America is approximately 1000% higher than an international cruise ship with a similar size crew.

Obviously still profitable ??? You must be kidding.

There are many very creative ways to calculate profit or loss. If you erase the $3 Billion that Star Cruises / Genting / NCL invested in the ill-conceived NCL America project, yes, they are making a profit.

 

One quick example on cruise ship employee salaries and tips............

Filipino cruise ship employees must be legally hired ONLY in the Philippines. This is a requirement of the Philippine government. The hiring MUST be through an officially sanctioned and licensed recruiting agency (read big payoffs to government officials). Potential Filipino seamen are required to pay a number of substantial "fees" to the recruiting agency for safety training and administrative procedures.

When the Filipino seaman is "hired", that is, presented to the cruise line, he/she is required to sign a union contract, negotiated between the maritime Union, recruiter, Phillipine government, and the cruise line.

If the seaman is a service employee (receiving tips, service charge, whatever), the daily salary is around US$ 1.00 per day plus tips.

Every month, the Philippine government requires the cruise line to wire a large percentage of the seafarer's salary back to the Philippines, through the recruiter. This allows 2 things to happen: 1) The Philippine government gets to tax those earnings - but only after the recruiter has fiddled with the exchange rate a bit, and deducted some "administrative fees".

 

If the gratuities/tips/service charges are considered as part of the seaman's salary, the recruiter has the opportunity to fiddle with these funds, and then the Phillipine government takes their cut.

 

If the gratuities/tips/service charges are not considered part of the seaman's salary, the recruiter and Phillipine government cannot get their hands on most of this money.

 

One might argue that it is a good thing to have the government see ALL the earnings of the seaman - instead of just a small percentage.

 

One can also argue that if the recruiter and government are allowed to take a large cut of the seaman's salary, he will need a larger salary to cover his losses to taxes and other manipulations of the money he earns. This requires the cruise lines to pay higher salaries to remain competitive. Higher salaries translate to higher cruise fares for you.

 

Since I do not have to pay for cruises, I vote that we include gratuities/tips/service charges in the overall fares and increase them to the same levels that NCL charges for Pride of America.

Are you with me?

[Nic6318]

 

The new tipping schemes are even more outrageous when one considers that the cruise lines now add "tips" to your onboard account....but refuse to discuss how (or where) that money is distributed. So these days, the worst waiter or cabin steward will get the same distribution as the best. This totally goes against the real meaning of tipping.

 

When I started cruising (in the early 70s) my tipping was always very generous and far above so-called guidelines. But now that the cruise lines have adopted auto tipping schemes (and also played the guilt game by adding "additional tips" to some tabs) we have simply gone along with their scheme. We used to even tip over and above the auto tips, but recently adopted an attitude that if the cruise lines want to play the "auto tip" game then we will not tip one additional penny. While it can be difficult to overcome our "North American tipping guilt" we work at it :).

 

 

Hank

Hank

 

Hi there

 

I believe the only reason the automatic gratuities started being added came about because of the customers. Just too many of them saw how they could make an inexpensive vacation even cheaper by not being fair to the crew and give nothing in those "envelopes".

 

The unfortunate part is that they can still do the same. Maybe just a little more effort and possibly more uncomfortable for them but the cruise lines will still allow them to stiff the crew.

 

If you look at vacation packages such as all inclusive resorts, you would have always seen that gratuities were included. It didn't take long to understand that if you wanted service you did have to pay extra. This is because as Hank pointed out even if everyone got a decent wage there would always be enough people who felt they could "buy" better service. This was always the case and for sure if you gave extra you could get a better product or not have to wait. You don't have to go far away, you can see the same at home. The reason service isn't compromised on the cruise lines as they might be at some resorts is that they have a international population to draw from for their staff.

 

I also agree we end up playing this "game" as Hank says. It is hard not to give just a little more to the people who deserve it when we have received great service, even though we understand that we have already tipped. Not much you can do.

 

I just try and enjoy my vacation

[chengkp75]

So along the lines of tipping being included, does anyone know how things operate on the NCL Pride of America for the tipped crew working on a US registered ship?

 

Presumably the crew cannot hide their tips from their tax return as the cruise ship will have a record of them?

 

NCL's one ship also has to abide by US labor laws and pay. The ship is obviously still profitable, I'm sure not as profitable as their other ships, and they manage to meet these requirements.

 

ex techie

 

Well, Bruce has more experience than I do with international crews, though I did work with them some at NCL, but I will disagree with some of his facts. While his description of the hiring practices and wage/taxation is mostly correct from what I remember, I will disagree with the "$1/day plus tips", but that is neither here nor there. The engineers were not service crew, so not tipped, but they were still required to have their base salary sent home as Bruce describes. However, their overtime was not sent home, and was put into their shipboard account, that was paid out when they left the ship.

 

POA's payroll "1000%" higher? That means 10 times as high. No. The payroll is about 2-3 times as high. There are far more expensive things to having a US flag ship than wages. Because the crew are not covered by "Workman's Comp", but by the Merchant Marine Act of 1936, the liabilities to the company are far greater than in other industries in the US. (One of the major way that the maritime unions have "gamed" the system to the point where the merchant marine is in the sorry state it is now)

 

The current minimum wage in Hawaii is $8.50, and many of the crew receive this amount. Hawaii allows for tipped personnel to be paid less than this, if the tips make up the difference at least. Crew do receive overtime for excess of 40 hours/week which may be 1.25 times the base wage at a minimum. International crew, under MLC 2006, also receive overtime for excess of 40 hours, but if it is required work (mandatory overtime), then it can be calculated into a "blended" wage so that every hour is paid the same (base hours higher, overtime lower).

 

POA is profitable, as Bruce says, if you discount the millions lost when the project started, but contrary to popular belief, this is why a 7 day POA cruise costs the same as a 14 day foreign flag cruise from the West Coast to Hawaii, even considering the vast difference in fuel cost. They do not return the same as international ships, but they do return a profit.

[CapeCodCruiser]

I'll never really understand this obsession folks have with tipping. Add to the fare , pre-pay, add it ship account daily or pay them directly - it's all the same.

 

Where I come from we call that cutting the blanket off one end and sewing it on the other!

 

When booking there is the ability to prepay gratuities - this is the easiest way to "add it in the cruise fare" - then it's done and you never have to worry about it again.

 

:cool:

[NLH Arizona]

 

If the gratuities/tips/service charges are not considered part of the seaman's salary, the recruiter and Phillipine government cannot get their hands on most of this money.

 

Since I do not have to pay for cruises, I vote that we include gratuities/tips/service charges in the overall fares and increase them to the same levels that NCL charges for Pride of America.

Are you with me?

Thank you Bruce. How is the determination made whether the gratuities are salary or not?

 

I wonder how many folks would agree to pay the same rates for their Caribbean cruise, that folks are paying to cruise on the Pride of America, just to have the gratuities/service charge included?

[ducklite]

When we look at a cruise, we look at the entire cost, including transportation to/from (inc airport parking, cabs, etc), pet sitting, hotels, alcohol bill, tips, shore excursions, travel insurance, spa, meals on shore, the whole lot gets figured into a spread sheet. If we can afford it, we go. If not, we stay home or look at other options. All-inclusive just makes it easier to figure, although in our one a-I cruise we still discreetly handed out cash tips to two servers who really took exceptional care of us. That was also figured into the budget, and we made sure we had enough local currency to do so.

 

It doesn't matter to us if it is included or not. Same budget either way.

Edited August 13, 2016 by ducklite

[NLH Arizona]

I'm not real convinced that there is a difference to foreign governments as to whether the income is salary or gratuities. Since the introduction of the MLC 2006, there has been a minimum wage mandated, and the cruise lines use a combination of wage and DSC (I refuse to call it gratuities, it's not) to make up this minimum wage. I have always felt, and from my experience, that the companies do this for two reasons. One, as Hank has said, is to make the advertised fare lower. The second is to make a portion of the wage an incentive, without the company being actively involved. If passengers remove DSC because of perceived poor service, then the company can say "you guys need to do better, but don't blame us for reducing your pay check, it was the passengers." This carrot and stick, while avoiding blame for the stick, is pretty old school HR, but the cruise lines hold onto it because they feel the need to have excellent customer service without having to pay for the incentives to get it.

 

As to your other question, it doesn't make any difference to the crew who pays the DSC, it only matters whether it is all there at the end of the cruise.

Maybe I'm confused, but what does the MLC 2006 have to do with crew paying taxes? ex techie said you said in 2006 there were changes to if taxes were paid. I didn't read it that way, but ex techie is adamant that you said that in this post. Did you say that or not?

 

Here was my post saying she should ask you and below is her response to me:

 

Quote:

Originally Posted by NLH Arizona View Post

Unfortunately, all you will get is opinions, unless someone like Chengkap75 were to answer the question, since he worked for cruise lines.

here is his response to me:

He did.

Looks like the tax thing is a myth since 2006.

 

ex techie

Edited August 13, 2016 by NLH Arizona

[davecttr]

Thank you Bruce. How is the determination made whether the gratuities are salary or not?

 

I wonder how many folks would agree to pay the same rates for their Caribbean cruise, that folks are paying to cruise on the Pride of America, just to have the gratuities/service charge included?

 

Nobody of course ;)

 

Having service charges included would be about the current cruise price plus an additional amount to cover the daily service charge.

 

Having service charges included does not double the fare. For example Costa Cruises have a mandatory service charge and their prices are in line with other mid market cruise lines.

[lefy]

I guess only someone who is privy to the actual cruise line internal workings would really know the answer to the question but my guess is that it doesn't matter. It was different In the days when you actually handed cash envelopes to each of the crew you were tipping.

Now I don't see why it would make a difference pre paying or adding it to your tab at the end of the cruise.

[NLH Arizona]

Nobody of course ;)

 

Having service charges included would be about the current cruise price plus an additional amount to cover the daily service charge.

 

Having service charges included does not double the fare. For example Costa Cruises have a mandatory service charge and their prices are in line with other mid market cruise lines.

Actually, according to Costa's site, they are not included in the fare, they are added to the shipboard account, so we would not see them in the fare pricing:

 

For all hotel services provided on board, a mandatory service charge is added daily to the Guest's account. The actual payment will be at the end of the cruise and depends on the duration of the cruise. The predetermined daily amount depends on the currency in use on board and the date of the cruise as follows:

 

http://www.costacruise.com/B2C/USA/Before_you_go/general/GeneralInfo.htm

Edited August 13, 2016 by NLH Arizona

[pinkpanther52]

Speaking from a British point of view I would LOVE tips to be included in the fare.

 

But I take it as a necessary evil of cruising American line.

 

Strong words you may think but I despise (hate is not strong enough word) the North American tipping system.

 

It offends my Moral sensibilities that employers can avoid obligations to pay a living wage and TBH leads to overbearing service, although this is more apparent in US land based restaurants.

 

Yes I will leave a SMALL tip in the UK or Europe if I receive good service but culturally when tipping in the US it just feels like you are being fleeced.

 

So yes if I had the choice I would prefer tips to be included.

 

Flame away 🙄

[NLH Arizona]

Speaking from a British point of view I would LOVE tips to be included in the fare.

 

But I take it as a necessary evil of cruising American line.

 

Strong words you may think but I despise (hate is not strong enough word) the North American tipping system.

 

It offends my Moral sensibilities that employers can avoid obligations to pay a living wage and TBH leads to overbearing service, although this is more apparent in US land based restaurants.

 

Yes I will leave a SMALL tip in the UK or Europe if I receive good service but culturally when tipping in the US it just feels like you are being fleeced.

 

So yes if I had the choice I would prefer tips to be included.

 

Flame away 🙄

It is so different in different countries. When I go to Europe, I don't understand a service charge added to some of my restaurant bills (talk about being fleeced, I can't even determine the amount), because that doesn't happen here to many restaurants. When I was in Egypt, they charged me for toilet paper in some of the sights and then having to pay to use a toilet in some countries.

 

Before I travel, I thoroughly research the country, so I know the customs with regard to pretty much everything I might experience, but even though I read about some of these things, it is still a shock when you encounter them, so I understand where you are coming from.

[chengkp75]

Maybe I'm confused, but what does the MLC 2006 have to do with crew paying taxes? ex techie said you said in 2006 there were changes to if taxes were paid. I didn't read it that way, but ex techie is adamant that you said that in this post. Did you say that or not?

 

Here was my post saying she should ask you and below is her response to me:

 

Quote:

Originally Posted by NLH Arizona View Post

Unfortunately, all you will get is opinions, unless someone like Chengkap75 were to answer the question, since he worked for cruise lines.

here is his response to me:

He did.

Looks like the tax thing is a myth since 2006.

 

ex techie

 

Sorry, I didn't mean to imply that MLC 2006 had anything to do with taxes in various countries. What it does have is a minimum wage, so those countries know that the crew is paid at least this amount, whether it is made up of base wage or DSC.

[NLH Arizona]

Sorry, I didn't mean to imply that MLC 2006 had anything to do with taxes in various countries. What it does have is a minimum wage, so those countries know that the crew is paid at least this amount, whether it is made up of base wage or DSC.

I understood 1000% what you said and knew that MLC 2006 didn't have anything to do with taxes, but ex techie was adamant that you said it did. Thanks for clearing this up. And BTW, I thoroughly enjoy your input into these threads, because you are posting actual facts, when we see so many opinions, it is nice to know the real skinny.

[SheriAZ]

Maybe this has been answered and I didn't see it....

As it is, if you cancel your cruise and don't qualify for a refund, you are not paying tips. If tips are part of the price wouldn't the total loss be more? That would be my only concern.

[pinkpanther52]

It is so different in different countries. When I go to Europe, I don't understand a service charge added to some of my restaurant bills (talk about being fleeced, I can't even determine the amount), because that doesn't happen here to many restaurants. When I was in Egypt, they charged me for toilet paper in some of the sights and then having to pay to use a toilet in some countries.

 

Before I travel, I thoroughly research the country, so I know the customs with regard to pretty much everything I might experience, but even though I read about some of these things, it is still a shock when you encounter them, so I understand where you are coming from.

 

Agreed 😀

 

FYI that service charge is NOT compulsory! At least in the UK

 

The place that use it do appear to be either A) Chain Restaurants or B) Tourist traps, although quite a few places do add it if you are a big group and they have a set menu and that's the only time I would patronise a place that has a service charge 😉 As t does make splitting the bill easier.

[ducklite]

Agreed [emoji3]

 

 

 

FYI that service charge is NOT compulsory! At least in the UK

 

 

 

The place that use it do appear to be either A) Chain Restaurants or B) Tourist traps, although quite a few places do add it if you are a big group and they have a set menu and that's the only time I would patronise a place that has a service charge [emoji6] As t does make splitting the bill easier.

 

 

 

I live in Orlando and many restaurants automatically include a gratuity because of all of the foreigners who refuse to tip because that isn't how it is done in their country. Of course they are the same people who become enraged at Americans visiting their nation and not conforming to local norms. They want it both ways. I'd rather they just stayed home if they are too cheap and ignorant to accept cultural differences and act accordingly.

[NLH Arizona]

Agreed 😀

 

FYI that service charge is NOT compulsory! At least in the UK

 

The place that use it do appear to be either A) Chain Restaurants or B) Tourist traps, although quite a few places do add it if you are a big group and they have a set menu and that's the only time I would patronise a place that has a service charge 😉 As t does make splitting the bill easier.

I wish they would have told us the service charge was not compulsory when we asked, but at least now I know, so if the service is bad, I can ask them to take it off.

[pinkpanther52]

I live in Orlando and many restaurants automatically include a gratuity because of all of the foreigners who refuse to tip because that isn't how it is done in their country. Of course they are the same people who become enraged at Americans visiting their nation and not conforming to local norms. They want it both ways. I'd rather they just stayed home if they are too cheap and ignorant to accept cultural differences and act accordingly.

 

I agree with you I really do BUT it hat does not stop the feeling that a) you are being fleeced and b) you are being hounded and pestered by the wait staff when eating out in the US.

 

Guess it is just a cultural difference but I would feel SO much better if the American cruise line just advertised the REAL price when selling in the UK.

[davecttr]

Actually, according to Costa's site, they are not included in the fare, they are added to the shipboard account, so we would not see them in the fare pricing:

 

For all hotel services provided on board, a mandatory service charge is added daily to the Guest's account. The actual payment will be at the end of the cruise and depends on the duration of the cruise. The predetermined daily amount depends on the currency in use on board and the date of the cruise as follows:

 

http://www.costacruise.com/B2C/USA/Before_you_go/general/GeneralInfo.htm

The important thing about the Costa service charge is it is compulsory, you can't avoid paying it. I think it would be better if it was included in the headline price but Costa are as adverse to revealing the true cost of the cruise as most of the cruise industry

[davecttr]

I agree with you I really do BUT it hat does not stop the feeling that a) you are being fleeced and b) you are being hounded and pestered by the wait staff when eating out in the US.

 

Guess it is just a cultural difference but I would feel SO much better if the American cruise line just advertised the REAL price when selling in the UK.[/QUOTE]

 

They can't be forced to do that if the service charge is discretionary. :(

[lefy]

I'm assuming the reason for the tipping charges being automatically added to the bill or being prepaid is simple. Not everyone was tipping the staff what the cruise lines figured they should. No different than when you go to a restaurant with a large party & the 18% or whatever is automatically charged to the bill. The staff is guaranteed a decent tip. That also brings with it problems because the incentive for good service is not as much either. I think service has dropped off on cruise lines a little since automatic tipping has been in place.

[NLH Arizona]

I agree with you I really do BUT it hat does not stop the feeling that a) you are being fleeced and b) you are being hounded and pestered by the wait staff when eating out in the US.

 

Guess it is just a cultural difference but I would feel SO much better if the American cruise line just advertised the REAL price when selling in the UK.

Not sure how you feel you are being fleeced. If the United States followed the English way, they would raise the price now being paid for the food, because they would raise the salaries of the servers, and then if service was bad, you wouldn't have any recourse. The way we do it, the food is less expensive, because we don't incorporate all of the servers wages in it, and we tip based on service. I usually tip 20% for good service, but have tipped less and none for bad service, but under your system I would be stuck paying the whole thing if the service is lousy.

 

Also, if you are ever pestered or hounded to leave a tip, don't leave a tip and let the Manager know that you are not leaving a tip because you were pestered about it.

 

There was a chain here, Joe's Crab Shack, that did a non-tipping test in 18 of their restaurants (they have over 130 locations), where they raised the menu prices 12% to 15%. They raised their server's wages to $12-$14 an hour versus what they received when they got tips, which I think was $2-$3 an hour. At the end of the test 60% of their customers disliked the non-tipping policy (they lost some customers in those stores, I think I read 8% to 10%) and they went back to the old "tipping" system in 14 of the 18 locations (BTW none of Florida's 13 locations were included in the test).