Daily Service Charge

[FLAHAM]

1 hour ago, PTC DAWG said:

They gladly take tips…

Not in my experience.  I have had Silversea staff uniformly decline to accept a tip.

[MCMC100]

On 1/2/2023 at 11:10 PM, ldtr said:

 

It would be a service charge  and considered to be wages if it did not comply with  Rev Rul. 29-252 which was affirmed  in IRS bulletin  2012-26  in Rev Rul. 2012-18.  However if it does then it would be considered to be  tips and not considered to be wages.

 

The key difference is that the daily amount is not mandatory, along with having to meet some other rules.

 

Also according to FASB Codification 605-4545, if they were not considered to be a tip and were in fact considered to be a service charge they would have to be included as part of the companies gross revenue.  Yet 10Q and 10K filing do not reflect that for any of the major cruise holding companies and the size of the amount collected would certainly be material to those filings.

Interesting.  That’s informative.

I’ve never really understood how this works. Are the “gratuities/tips” we pay on the specialty dining and FAS drink package treated differently?  Could you ask that they be removed?  They seem like part of the cruise fare when paying. 
I’ve always just viewed it all as fungible and the true cost of the cruise is buried in various charges, fees, taxes, tariffs, requests, demands, hopes and dreams. If the bottom number is ok, I book the cruise.

The crew is working much harder than I am onboard and I have no intention of trying to beat the bartender out of a $2 tip for my Manhattan.  

[fshagan]

4 hours ago, MCMC100 said:

Interesting.  That’s informative.

I’ve never really understood how this works. Are the “gratuities/tips” we pay on the specialty dining and FAS drink package treated differently?  Could you ask that they be removed?  They seem like part of the cruise fare when paying. 
I’ve always just viewed it all as fungible and the true cost of the cruise is buried in various charges, fees, taxes, tariffs, requests, demands, hopes and dreams. If the bottom number is ok, I book the cruise.

The crew is working much harder than I am onboard and I have no intention of trying to beat the bartender out of a $2 tip for my Manhattan.  

 

I agree with you on the total cost of the cruise being all the costs; it doesn't bother me to pay gratuities separately as long as I know what they are up front, and the cruise lines have made that easy with the daily charges. But, they do hide it from you during booking, so it is bad that new cruisers unfamiliar with the custom are surprised by the fees.

 

As far as I know, the tip added for drinks and specialty dining would be called "service charges" here in the US, as you cannot remove them. They are not a discretionary amount given to the bartender or server like when you tip extra in cash (or on land, when you tip a bartender or server in a restaurant).

 

NCL uses the gratuities in part to encourage the team to "work together" for your satisfaction. It reminds of the "group project" you had to do in high school where two or three members do all the work, and the other two or three in the group either pull you down or ride on your coattails. I think it's a lousy management style, but it's what NCL has chosen to maintain service levels. While I don't like it, I will say the service from those in the DSC pool that I interact with has always been fantastic on NCL.

[kylenyc]

Instead of removing the daily service charge and risking a black mark on your folio, maybe just bring a bunch of cards to hand out to other passengers and let them do the dirty work for you... "Did you know... You can remove or reduce the discretionary daily service charge if you're unsatisfied with the service on board. Just go to the Guest Service Desk and don't take no for an answer."

I didn't remove the DSC after the last two subpar cruises but I wouldn't mind educating others on how to do it. First time cruises would probably never return to NCL any time soon anyways.

[smillerholmes]

On 12/31/2022 at 2:05 PM, New2cruise2022 said:

@RocketMan275  @ChiefMateJRK Yes, dress code. Another winner. 

I cannot lie - a good water thread *really* does it for me.  I'll dig right in whether it's about ship vs. botttled vs. boxed/price/bring your own/filling directly from the buffet/1L vs 1.5L/latitude level/was it delivered to the room.  I'm here for those!

[farringtonb]

to remove the DSC upfront, day 1, are the rules for those from the UK and those from elsewhere different?

 

I cruised in May, I had prepaid the DSC's, and tipped as we went along too. I ask, as I was surprised to receive a call a few days ago, and the TA actually promoted to me not paying the DSC, and said remove them on day 1 as I am from the UK, and continue to tip as you go along and you will save money.

 

Is this feasible? I have searched the forums but there is so much different information. 

[graphicguy]

Yay….threads like this are always a good time!!!!!!!

 

The major lines add in fees to make their  look less.  Discretionary?  I suppose.  I know the first cruise I took back in the ‘80s it seems I tipped everyone for everything all the time.  So, I (sort of) like having the DSC as a way of alleviating that.  

 

I had sailed Celebrity right after the restart.  Haven’t looked at them for a while, but they were “including” everything fares, where tips, internet and drinks were included.  But, the fares were much higher than their competitors as a result.  Some actually complained they didn’t want to include drinks, internet and tips.  Not sure if they’re still doing that or not.

 

The alleged “luxury” lines for the most part are “all inclusive”.  But, their fares are much, much higher as a result.  And, they aren’t “discretionary”, they’re mandatory.

 

So, one way or the other, you’re paying the DSC on all cruise lines.  Sometimes it’s baked into the higher fares.  

Edited July 28, 2023 by graphicguy

[RocketMan275]

3 hours ago, farringtonb said:

to remove the DSC upfront, day 1, are the rules for those from the UK and those from elsewhere different?

 

I cruised in May, I had prepaid the DSC's, and tipped as we went along too. I ask, as I was surprised to receive a call a few days ago, and the TA actually promoted to me not paying the DSC, and said remove them on day 1 as I am from the UK, and continue to tip as you go along and you will save money.

 

Is this feasible? I have searched the forums but there is so much different information. 

Is it your intention to save money by tipping less than the DSC as you go along?

The DSC covers persons you won't have personal contact with, persons who clean the ship, do your laundry.  How would  you tip them as  you go along?

Do you intend to tip as you go along in the buffet? 

Personally, advice from a TA such as that would be  red flag and I would find another TA.

[farringtonb]

3 hours ago, RocketMan275 said:

Is it your intention to save money by tipping less than the DSC as you go along?

The DSC covers persons you won't have personal contact with, persons who clean the ship, do your laundry.  How would  you tip them as  you go along?

Do you intend to tip as you go along in the buffet? 

Personally, advice from a TA such as that would be  red flag and I would find another TA.

They brought it up to me. An NCL PCC. They said a lot of customers from the UK remove them on day 1 and they get envelopes to tip along the way. I was intrigued as to why UK customers only do this but I didn't probe it.

 

Honestly, yes I would save money. The DSC is £435 I believe for 2 adults and a child for an 11 day cruise (the same cruise length we did in May). With the additional tips we provided it was effectively another cruise fare we paid on top.

[zqvol]

19 minutes ago, farringtonb said:

They brought it up to me. An NCL PCC. They said a lot of customers from the UK remove them on day 1 and they get envelopes to tip along the way. I was intrigued as to why UK customers only do this but I didn't probe it.

 

Honestly, yes I would save money. The DSC is £435 I believe for 2 adults and a child for an 11 day cruise (the same cruise length we did in May). With the additional tips we provided it was effectively another cruise fare we paid on top.

but why additional tips,  the DSC covers all the tips you need to leave

[insidecabin]

21 minutes ago, farringtonb said:

They brought it up to me. An NCL PCC. They said a lot of customers from the UK remove them on day 1 and they get envelopes to tip along the way. I was intrigued as to why UK customers only do this but I didn't probe it.

 

Honestly, yes I would save money. The DSC is £435 I believe for 2 adults and a child for an 11 day cruise (the same cruise length we did in May). With the additional tips we provided it was effectively another cruise fare we paid on top.

Culturual UK tipping is a lot lower than US and the main UK cruise market is tips included.

 

Many will just not prepay and remove the for your convenience.

 

P&O went to the included model as so many people were removing them.

Prices did not go up.

 

MSC went included to sell into the UK market

 

Some just like to tip twice.

[RocketMan275]

1 hour ago, farringtonb said:

Honestly, yes I would save money. The DSC is £435 I believe for 2 adults and a child for an 11 day cruise (the same cruise length we did in May). With the additional tips we provided it was effectively another cruise fare we paid on top.

So, would you be providing 435 pounds in tips as  you go?

BTW, I would report an NCL PCC who suggested this.  

[bjlaac]

On 7/28/2023 at 11:46 AM, RocketMan275 said:

Is it your intention to save money by tipping less than the DSC as you go along?

The DSC covers persons you won't have personal contact with, persons who clean the ship, do your laundry.  How would  you tip them as  you go along?

Do you intend to tip as you go along in the buffet? 

Personally, advice from a TA such as that would be  red flag and I would find another TA.

This is where a lot of folks disagree with the whole concept of the gratuity system on cruise lines. No where in the world do you tip the person doing dishes, working in a buffet or washing linen and other non server functions yet we are brainwashed by NCL, RCL, Carnival and many more that its absolutely the correct thing to do.  I would really like to know from any of you that vacation other than on a cruise, if you always leave $80 per night (family of 4) on a 7 night vacation.  Do you just leave $560 on the night stand in the hotel when you leave?  Do you split it and give half to the maid or perhaps give it to the hotel desk manager for the laundry room, waiters and busboys?

 

I'm serious in the question as I've never seen, let alone even heard of, a family leaving nearly $600 for gratuities.  Yet the cruise lines somehow think this is normal and the customer needs to folk over this cash for what exactly?  Are they not paying minimum wage?  Are they subsidizing their costs on the back of its customers?

 

Somewhere in the last 20 years it became a money grab and until I know exactly where the $20 goes each night I reserve the right to modify the amount either up or down.  Don't like it, make it mandatory but my guess is there are many reasons they won't. 

 

After all, it is discretionary.

[BirdTravels]

7 minutes ago, bjlaac said:

This is where a lot of folks disagree with the whole concept of the gratuity system on cruise lines. No where in the world do you tip the person doing dishes, working in a buffet or washing linen and other non server functions yet we are brainwashed by NCL, RCL, Carnival and many more that its absolutely the correct thing to do.  I would really like to know from any of you that vacation other than on a cruise, if you always leave $80 per night (family of 4) on a 7 night vacation.  Do you just leave $560 on the night stand in the hotel when you leave?  Do you split it and give half to the maid or perhaps give it to the hotel desk manager for the laundry room, waiters and busboys?

 

I'm serious in the question as I've never seen, let alone even heard of, a family leaving nearly $600 for gratuities.  Yet the cruise lines somehow think this is normal and the customer needs to folk over this cash for what exactly?  Are they not paying minimum wage?  Are they subsidizing their costs on the back of its customers?

 

Somewhere in the last 20 years it became a money grab and until I know exactly where the $20 goes each night I reserve the right to modify the amount either up or down.  Don't like it, make it mandatory but my guess is there are many reasons they won't. 

 

After all, it is discretionary.

That’s where you are 100% wrong. 
 

When I worked as a bus person and a cook, I received tips shared by the waiters. In fact, at one point, the IRS was writing me because they said that as a bus person, I should be reporting more tips than I did. So,,, there is a regulatory expectation that back of the house people share in tips. 
 

I certainly hope that you tip at buffet and not stuff the hard working staff there. We were just at a $80/pp buffet in Vegas and you are expected to tip between 18% and 22% on the $80 per person. We

were in a larger group, so there was a mandatory 18% tip for the buffet. 
 

Daily service charges go to the crew. That should be good enough for you. Some as cash to get them up to their minimum contract value. Some as additional tip. Some as perks and benefits (a free beer at the crew party or more bicycles to use to get around ports). 
 

In my home town, minimum wage is $15/hr. But if I am in a position that gets tips (like a waiter or cook) I can be paid as little as $5/hr with the expectation that the first $10 per hour in tips will go to getting me up to minimum wage. Which is hard when people believe tipping is discretionary and they are willing to stuff me. 
 

The Daily Service Charge is mandatory unless you have a dispute. It is itemized because the US is requiring more “fees” to be explicitly disclosed and not rolled into the bottom line price of the cruise. You will see more of that in the future. 

[tony s]

Here we go again…..

[RocketMan275]

49 minutes ago, bjlaac said:

This is where a lot of folks disagree with the whole concept of the gratuity system on cruise lines.

 Yes, it is discretionary.  If  you don't like the system, feel free to spend  your travel dollars elsewhere.