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Gratuity Removal Too Easy?

spj8705

By spj8705,
in Royal Caribbean International

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newcruzer2

newcruzer2

Posted
Posted
It is not a gratuity why does the line keep wanting to call it a gratuity and not a service fee?

 

.

I believe this whole matter could be solved if cruise lines called it a mandatory resort fee like hotels do. I've been to hotels that weren't even close to a resort, just a motel and they still charged a resort fee, because its extra revenue and a way to make the customers pay certain people's wages.

Instead of arguing amongst ourselves , we should be posting stuff on RC social media .

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Ambermark

Ambermark

Posted
Posted

I’d have no problem with it being included in the cruise cost. Being in the UK it would be easier for me to understand to be honest. Tips to me are extras for a great service. If I went out to eat I would expect to pay enough for the meal so the the staff can be paid a decent wage and the owner can make enough profit to continue. The amount of tip I leave is dependant on how good the service we receive is. A ‘tip’ to me is a bonus for good service to the individual who gave the good service.

The way I understand gratuities at the moment are that they are used to top up a low wage, which isn’t really a tip it’s necessary. I would feel more comfortable in paying more fo my cruise, knowing the staff are being paid well, then I can tip individuals as I see fit. I know I can just prepay gratuities and then tip extra (which is what I’m doing) but not everyone will do that so isn’t really of benefit to the staff.

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Luke Dawg

Luke Dawg

Posted
Posted
Just off the Freedom (AMAZING week/cruise) and on the last day we were in line at GS to settle our cash account. They had a very friendly crew member going through the line to help speed it up and get people out of line quicker. The people in front of us told her they wanted grats. removed, she made a quick call on her portable phone, gave whoever answered the stateroom # and said remove grats. for all passengers. That was it, no signing anything, asking if there was a problem, nothing.

 

Of course it's nice that you can have an issue handled with ease, but it just kind of stuck with me all weekend that people can remove them so easily. It also seemed to be a very common need in the line we were in, as multiple were up there just for that purpose. Here's to hoping they had other plans with cash or something?

Just include them in the cabin cost and stop this insanity. They keep going up, they will be $20 before we know it.

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RDC1

RDC1

Posted
Posted
It is not a gratuity why does the line keep wanting to call it a gratuity and not a service fee?

 

Because cruise lines are playing the con game trying to tell guest it is gratuity, shifting large percent of the crews compensation to this pool and in doing so avoid all the fees, costs, and results of just saying it is a service fee. Sorry will not fall for this con act. But you are free to pay them if you want just never try to tell myself and others what we need to do.

 

It is not a con game game and the very fact that it can be removed goes a long way to show that it is not.

 

The major cruise line companies (RCL, CCL, NCLH are listed on the US stock exchange. That means that even though they are not US companies, they do have to follow SEC accounting regulations.

 

The accounting regulations concerning tips/gratuities are very clear and the companies get some benefits by keeping them tips.

 

As long as tips meet certain rules they are kept outside of the companies financials, they are neither income, nor expense. Even though having them in the revenue and expense would not change profit amounts, it would impact reported net margin (the last time I looked at the numbers it would have reduced RCL's net margin by about half a percentage point.) Another benefit of keeping it separate is in the tax status of each employee. Some countries treat tips different from wages. In some cases tips are taxed, in some they are not. In some countries retirement fees are collected against tips, in some they are not. Depending upon the employee's home country it could provide them a tax break (again this varies by country)

 

Now on to the rules. The cruise line only gets the beneficial treatment if certain rules are followed. The two most important of those rules are:

 

1. All of the money collected must be given to the employees. Now when I say all it is the net collected, so if the money is collected via credit card and if there is a fee charged the cruise line for those transactions those can be subtracted from the amount being distributed. The tips may be pooled and distributed, but it must go to the employees.

 

2. The gratuity must be optional. The customer must be able to adjust or remove it. The fact that the cruise lines allow it to be optional is a good indicator that the money received is classified as a tip under US accounting regulations and rule 1 is being followed as well.

 

If the rules are not followed, then the money received would have to be considered as revenue and the payments to employees would have to be reported as wages. Again the fact that they are not listed as being treated so in any of the cruise lines 10Q or 10K filings with the SEC is also a good indicator that the rules are being followed.

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LMaxwell Great Review Rare

LMaxwell

Posted
Posted
It is not a con game game and the very fact that it can be removed goes a long way to show that it is not.

 

The major cruise line companies (RCL, CCL, NCLH are listed on the US stock exchange. That means that even though they are not US companies, they do have to follow SEC accounting regulations.

 

The accounting regulations concerning tips/gratuities are very clear and the companies get some benefits by keeping them tips.

 

As long as tips meet certain rules they are kept outside of the companies financials, they are neither income, nor expense. Even though having them in the revenue and expense would not change profit amounts, it would impact reported net margin (the last time I looked at the numbers it would have reduced RCL's net margin by about half a percentage point.) Another benefit of keeping it separate is in the tax status of each employee. Some countries treat tips different from wages. In some cases tips are taxed, in some they are not. In some countries retirement fees are collected against tips, in some they are not. Depending upon the employee's home country it could provide them a tax break (again this varies by country)

 

Now on to the rules. The cruise line only gets the beneficial treatment if certain rules are followed. The two most important of those rules are:

 

1. All of the money collected must be given to the employees. Now when I say all it is the net collected, so if the money is collected via credit card and if there is a fee charged the cruise line for those transactions those can be subtracted from the amount being distributed. The tips may be pooled and distributed, but it must go to the employees.

 

2. The gratuity must be optional. The customer must be able to adjust or remove it. The fact that the cruise lines allow it to be optional is a good indicator that the money received is classified as a tip under US accounting regulations and rule 1 is being followed as well.

 

If the rules are not followed, then the money received would have to be considered as revenue and the payments to employees would have to be reported as wages. Again the fact that they are not listed as being treated so in any of the cruise lines 10Q or 10K filings with the SEC is also a good indicator that the rules are being followed.

 

If you're paying RCI, sure, but they are just a hotel management and operations company; they can turn over all net proceeds to a ship (company) that can put some monies into a crew welfare fund, measure employee metrics and pay or not pay a "full share" based on those numbers. The gratuity amounts collected far exceed any base contracted rate and as such there is no guaranteed amount.

 

Anyways, interesting information you've posted for others to consider.

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Tommy3putts

Tommy3putts

Posted
Posted
If you are ever bored on the last night, walk by guest services and look at the line. While I really think people should leave the tip in place, if they want to remove it then do so at the start of the cruise. Don't wait until the last night so the people that have waited on you don't find out until after you are off the ship. Just my thoughts on it.

 

 

 

Post 546....”The true test of a man’s character....”

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actuarian

actuarian

Posted
Posted

It really is a service charge, not a gratuity. However, the cruise line has to maintain the fiction that it is gratuitous in order to not be required to include it in the cost of the cruise. If everyone removed the gratuities, then the crew would not earn a living wage. Personally, I do not understand why you should be able to remove the gratuities paid to servers and cabin attendants but not the 18% gratuities included in the cost of drinks and drink packages. Servers and cabin attendants have as much right to a living wage as bartenders do.

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Expat Cruise

Expat Cruise

Posted
Posted
It really is a service charge, not a gratuity. However, the cruise line has to maintain the fiction that it is gratuitous in order to not be required to include it in the cost of the cruise. If everyone removed the gratuities, then the crew would not earn a living wage. Personally, I do not understand why you should be able to remove the gratuities paid to servers and cabin attendants but not the 18% gratuities included in the cost of drinks and drink packages. Servers and cabin attendants have as much right to a living wage as bartenders do.

 

Because purchasing drinks on the ship is a optional choice in addition to your cruise package. The cruise is marketed as a package, so the basic items require for that package is included.

 

The cruise line offers guest, a cabin, food, standard included drinks, transportation, and entertainment. You get all these things for paying for cruise fare, you do not get drinks, outside tours, shopping, upgrade added cost restaurants, etc. All these things are optional and have a added agreed fee.

 

Especially here. Unless you like being otracized to the point of tears and deleting your account. :o

 

Maybe it is just my nature but when anyone attacks, pushes me, want to change my opinion or point of view it only makes me stronger and makes me fight harder for what I believe to be true. In the end we are judge by our principles.

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csnarpy

csnarpy

Posted
Posted

Maybe it is just my nature but when anyone attacks, pushes me, want to change my opinion or point of view it only makes me stronger and makes me fight harder for what I believe to be true. In the end we are judge by our principles.

 

Ya, it was sarcasm, sorry forgot the tags. ;p

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RDC1

RDC1

Posted
Posted
If you're paying RCI, sure, but they are just a hotel management and operations company; they can turn over all xersnet proceeds to a ship (company) that can put some monies into a crew welfare fund, measure employee metrics and pay or not pay a "full share" based on those numbers. The gratuity amounts collected far exceed any base contracted rate and as such there is no guaranteed amount.

 

Anyways, interesting information you've posted for others to consider.

They can be pooled and distributed, but all must be distributed. The company cannot retain any.

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ElaineKeagy

ElaineKeagy

Posted
Posted

I’d love to know the percentage of people that remove the service charge and then go ahead and “tip” an amount equal to or above the amount of the service charge.

I’m guessing it’s low, very low. Under 10%.

 

 

Sent from my iPhone using Forums

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Tprime

Tprime

Posted
Posted
I’d love to know the percentage of people that remove the service charge and then go ahead and “tip” an amount equal to or above the amount of the service charge.

I’m guessing it’s low, very low. Under 10%.

 

 

Sent from my iPhone using Forums

Not sure...we always prepay and still tip cash

 

Sent from my SM-G955U using Forums mobile app

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LMaxwell Great Review Rare

LMaxwell

Posted
Posted
I’d love to know the percentage of people that remove the service charge and then go ahead and “tip” an amount equal to or above the amount of the service charge.

I’m guessing it’s low, very low. Under 10%.

 

 

Sent from my iPhone using Forums

 

Woohoo, I'm a 10%'er

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Redrobo

Redrobo

Posted
Posted
I’d love to know the percentage of people that remove the service charge and then go ahead and “tip” an amount equal to or above the amount of the service charge.

I’m guessing it’s low, very low. Under 10%.

 

 

Sent from my iPhone using Forums

 

Where did you pluck that figure from? What is your assumption based on, any facts?

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Expat Cruise

Expat Cruise

Posted
Posted
Any chance they keep up the fiction b/c it helps corporate out from a tax perspective? That seems the most obvious reason why they keep these as "discretionary"...

 

https://www.irs.gov/newsroom/tips-versus-service-charges-how-to-report

 

Sorry, but your information is a little wrong. Not US Flagged Ships, crews are not subject to US IRS rules. The Corporations do report US Profits but only after running through several management and holding companies.

 

The bottom line is real advantages to the cruise lines to keep the charges exactly as they are.

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Expat Cruise

Expat Cruise

Posted
Posted
.....unless they are US citizens.

 

If US Citizens, and please tell me what ships (Not US Flagged) use US Citizens in these low level jobs? That aside if you can find one he/she is working outside the Untied States and a different set of rules apply.

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