Is this a new Gratuities policy?

[TRLD]

13 hours ago, Kineticoh20 said:

Read this on Princess site....

"All of the Crew Appreciation and Service Charge payments made by all guests on all ships in our fleet are pooled, net of credit card transaction fees. The pooled funds are distributed throughout the year in the form of compensation, including bonuses, to crewmembers fleetwide who interact directly with guests and/or behind the scenes throughout every cruise, including those in the Bar, Dining, Entertainment, Housekeeping, Guest Services, Galley and Onboard Revenue areas."

What troubled me was the term compensation as opposed to tip on top of compensation. Is anyone else reading it as it's part of thier regular pay? Throughout the year? That is odd language too.

 

Many of the employees on Princess ships have contracts that state that they also participate in the Employee Appreciation pool.  As such their participation is considered to be part of their compensation.  For many employees this is probably as much as 50% of their total income.

 

Princess used to pool gratuities by ship, then break out gratuities by position.  A number of years ago they went to a fleet wide pool in order to solve a major employee issue.  Whe they were pooling by ship the amount of gratuities received could vary considerably not by performance, but by itinerary.  For example a cruise out of Southampton with a larger number of UK guests could have a substantially lower gratuity participation rate than a US based itinerary.  This resulted in lower crew moral on some assignments. (I remember back then talking with my cabin Steward on a TA and he mentioned that he was not looking forward to the cruises out of the UK because his tips would go down).  As a result Princess shifted to a fleet wide pool to make sure that all crew got similar access to the pool independently of the specific assignment.

 

As I understand it the pool is distributed according to a formula based upon position, with some of the money going to bonuses.  The biggest driver for bonuses is name mentions on the after crew surveys.  These mentions are probably the best way to reward individual crew members since, as I understand it, those mentions are used not only for bonuses, but also promotions, time off and other rewards.

[Torfamm]

8 minutes ago, TRLD said:

 

 

Princess used to pool gratuities by ship, then break out gratuities by position.  A number of years ago they went to a fleet wide pool in order to solve a major employee issue.  Whe they were pooling by ship the amount of gratuities received could vary considerably not by performance, but by itinerary. 

 

As I understand it the pool is distributed according to a formula based upon position, with some of the money going to bonuses.  The biggest driver for bonuses is name mentions on the after crew surveys.  These mentions are probably the best way to reward individual crew members since, as I understand it, those mentions are used not only for bonuses, but also promotions, time off and other rewards.

That makes sense to me. I wonder how this pool is affected by cruises out of Australia and New Zealand where gratuities are included in the fares?  

[TRLD]

5 hours ago, whitecap said:

I believe that most cruisers believe that by paying the gratuities, they are tipping those crew members on their cruise who provided good or exceptional services.  They very well may not be.  The gratuities paid, as stated in the Princess paperwork, go into a pool, controlled by Princess and distributed by Princess throughout the fleet!  Your room steward may never see a dime of the gratuities you paid and the same for those in the dining room who served you so well.  

If I go to a restaurant and the wait staff does an excellent job, I don't hand the owner extra money to be put in his or her pocket, to be distributed, throughout the year to all those who work at the restaurant.  Why should it be any different when cruising.  With the exception of our very first cruise (we are now over 50), we have always removed the gratuities, obtained small envelopes from Customer Service desk, and given tips directly to the persons who went above and beyond to see to it that we enjoyed our cruise.  

Rather funny.

 

If one was to be able to trace all of the money that one contributes to the pool as it goes through all of the electronic steps, then that exact money might not find its way back to that specific employee.  However, that money goes into a pool, and an equivalent amount of money from that pool will find its way to that employee.

 

Just as with land based companies there are accounting  rules on how gratuities are handled.  As long as requirements are met, the main one being that all funds received except for actual credit card handling fees (in the US this typically ranges from 1.5 to 3.5% of the funds processed by CC) must be distributed to employees, just as stated in the Princess policy.  As long as these requirements are met the gratuities amounts are processed outside of the companies books (the money received is not revenue, and the money spent is not expense).   

 

Just as one often sees with some land based restaurants that try and violate the rules there a both legal and civil actions that can result from violation of such accounting rules.

Edited May 29 by TRLD

[TRLD]

1 minute ago, Torfamm said:

That makes sense to me. I wonder how this pool is affected by cruises out of Australia and New Zealand where gratuities are included in the fares?  

My understanding is that just as when the cruise line runs a gratuities included special sale, or now with the fare included drink packages Princess puts the same amount into the pool that would be norm if the passenger was paying them.

 

The funny thing is that by doing this there is actually less variance in the pool contributions then prior to these changes.  After all they cannot be removed from package purchases or if included in fares.  

 

One of the rules that a business must comply with for treatment of the funds under tip rules is that they must be optional.  Not so much a problem with packages since the package purchase is optional.  Not sure how they deal with the cruises based out of Australia, though I suspect the corporate structures would allow them to be processed under Australian accounting rules.

[alwalaska]

8 hours ago, dog said:

Timely post.

My 15 day TA crew appreciable is $21 pp CAD per day.

I’ve been struggling to decide whether we should purchase the Plus package to have CA included or give the $21 pp/ per day directly to crew who we have contact with?

 

Opened a can of worms?

Although Princess has never officially said this, I've been told that removing the crew service fee or whatever they call it from your bill will reflect poorly on your cabin steward, dining attendants, etc.  I would suggest deciding between plus and standard based on whether or not the other benefits are worth the added cost to you and pay the gratuities (included or on your own) and then decide if there are people that you want to pay an "extra" something to. 

I do really wish all of the cruise lines went back to the envelopes at the end of the cruise rather than a mandatory fee, but that does leave out the behind-the-scenes people. Or, just up the cruise price by $21/day or whatever the rate is and do away with these extra "automatic" fees.

[TRLD]

3 hours ago, JimmyVWine said:

Do you really think that the cruise lines have not test-marketed this concept?  Or restaurants for that matter?  I can guarantee you that the system is the way it is because the cruise line knows that if it charges $1,120 up front instead of $1,000 with $17 per day for 7 days added on as gratuities, it will sell fewer cruises.  People seem to think that they know the industry better than the people who actually run it.  When you go to a restaurant and see a steak on the menu for $40, if you order it, you are going to pay $48.  You aren't being cheated, or hoodwinked, or deceived.  And the $8 gratuity that you pay is not a "reward" for the server.  It is part of their pay.  We live with this reality every day.  The system is working.  If it weren't, it would change.  Businesses change to evolve to the better.  If they don't, they fail. We have to trust that the people running multi-billion dollar businesses actually have a grasp on this. 

The problem is rather more than just sale competition.  There are benefits for the cruise line, its employees, and passengers under the current system.

 

Lets start with passengers.  If tips were included in the fares they would have to be paid in advance and they would also be included in the cost calculation for travel insurance.  Since travel insurance tends to run around 5% of trip costs or more that saves passengers around $1 per day.

 

For the crew, gratuity payments are treated differently in many places compared to tips, this, depending upon country of residence, may result in lower taxes paid by crew members, leaving more money in their pockets. It also may impact the amount of fees they have to pay to various recruiting firms.

 

For the cruise line, the current policy allows the money to be processed off the books.  It is not part of revenue, or expense.  This means that the company has a higher net margin for a level of business.  Its biggest impact is in risk management.  Since the Employee Appreciation pool is directly based upon level of business, where as salary is fixed, it automatically adjusts if there is a major drop off of business limiting the cruise lines exposure to changes in market condition.  Removing that cushion would require the cruise lines to adjust their risk management plan and retain more funds for such changes.  That would either require higher charges, or additional cost cutting (potentially lower overall crew compensation).

 

So more is involved than just competition.

[memoak]

6 minutes ago, alwalaska said:

Although Princess has never officially said this, I've been told that removing the crew service fee or whatever they call it from your bill will reflect poorly on your cabin steward, dining attendants, etc.  I would suggest deciding between plus and standard based on whether or not the other benefits are worth the added cost to you and pay the gratuities (included or on your own) and then decide if there are people that you want to pay an "extra" something to. 

I do really wish all of the cruise lines went back to the envelopes at the end of the cruise rather than a mandatory fee, but that does leave out the behind-the-scenes people. Or, just up the cruise price by $21/day or whatever the rate is and do away with these extra "automatic" fees.

Under the envelope method many people just avoided their dining room and bar on the last evening to avoid paying and looking cheap

[dreaminofcruisin]

5 hours ago, cruising.mark.uk said:

We're on a Princess cruise at the moment.  There is a separate 'gratuities' line entry on every food / beverage / service bill (typically 18 per cent, but adjustable).  That is the equivalent of what you are referring to in terms of land-based restaurants, not the crew appreciation / service charge that this thread was about originally.   

 

We have met many many fantastic staff on this 4-week cruise.  And most of the ones with whom we have interacted tell us they have been with Princess for multiple contracts over years and years.  Clearly, they are happy with what and how they are paid by Princess.  I know that we have contributed to them receiving a salary with which they are happy by paying our daily service charge as part of our package and the additional 18 per cent on goods and services not covered by that.  For us, it is just part of the cruise fare in the same way that when we go to a restaurant at home, an element of our food bill pays staff wages across the whole company and an element of our supermarket bill pays staff wages across the whole supermarket chain.  Those who wish to provide an additional gratuity to individual named staff members are welcome to do so.

 

Really curious what ship and what location of the world you are now sailing?

I haven't seen a service bill where one would be able to add a gratuity since before covid, especially not in bars, but also in specialty restaurants.....

Where are you seeing this?

 

[TRLD]

17 minutes ago, alwalaska said:

Although Princess has never officially said this, I've been told that removing the crew service fee or whatever they call it from your bill will reflect poorly on your cabin steward, dining attendants, etc.  I would suggest deciding between plus and standard based on whether or not the other benefits are worth the added cost to you and pay the gratuities (included or on your own) and then decide if there are people that you want to pay an "extra" something to. 

I do really wish all of the cruise lines went back to the envelopes at the end of the cruise rather than a mandatory fee, but that does leave out the behind-the-scenes people. Or, just up the cruise price by $21/day or whatever the rate is and do away with these extra "automatic" fees.

I do not have any information about this since restart.  I do know that with the advent of packages, and the inclusions of crew appreciation, there is less opportunity for removal of crew appreciation the tracking of cash tips has been less of a factor compared to pre covid.

 

Prior to Covid it is my understanding that Princess did track a number of metrics, one of which was the number of passengers removing tips in a Stewards area.  While this can be variable and not necessarily be tied to their performance (though if a reason for removal was given those comments were passed on to the department), they were tracked over time and compared to other Stewards at both a ship and fleet level as such consistent under performance over time could impact how they were evaluated for bonuses and promotions.

This was according to an officer that was in charge of Floor Services which includes all Stewards.

 

No way to tie it to dining room personnel these days since they have gone away from traditional dining.

 

The best way these days to reward ship staff that go above and beyond is to mention them on the after cruise survey.  Those mentions are very much used to determine bonuses, promotions, and time off.

Edited May 29 by TRLD

[alwalaska]

7 minutes ago, memoak said:

Under the envelope method many people just avoided their dining room and bar on the last evening to avoid paying and looking cheap

But those are probably the same people removing the gratuities from their bills. 

[TRLD]

6 minutes ago, memoak said:

Under the envelope method many people just avoided their dining room and bar on the last evening to avoid paying and looking cheap

I wonder if those that remove their gratuities and give out envelops give them out each day to dining room staff  or those that work in the buffet that provide service.  

[karatemom2]

4 minutes ago, alwalaska said:

Although Princess has never officially said this, I've been told that removing the crew service fee or whatever they call it from your bill will reflect poorly on your cabin steward, dining attendants, etc.  I would suggest deciding between plus and standard based on whether or not the other benefits are worth the added cost to you and pay the gratuities (included or on your own) and then decide if there are people that you want to pay an "extra" something to. 

I do really wish all of the cruise lines went back to the envelopes at the end of the cruise rather than a mandatory fee, but that does leave out the behind-the-scenes people. Or, just up the cruise price by $21/day or whatever the rate is and do away with these extra "automatic" fees.

 

Respectfully, can I ask why? If you are paying the same amount via any method - whether it be through envelopes, daily CA charge, or added to upfront cruise fee does it really make any difference how the sausage gets made? I'm not being argumentative, just truly trying to understand all of the angst from some people around this issue.

 

The cost is the cost - and except for those people who use the opportunity to remove the charges since Princess still allows it - for the rest who pay either via a package, or alacarte, or in advance, or onboard, or with OBC what is the big deal around how it is paid and how it is allocated? 

I don't analyze how my dollars are split up when I go to a restaurant and pay the bill, service fee, or tip. I don't try to figure out at the grocery store how much of the amount I'm paying for my eggs goes to salaries, overhead, rent, etc. When I stay at a hotel and tip the bellboy or housekeeper a few dollars for services, I don't spend a minute trying to figure out how much of the daily resort fee goes to paying their salaries. So why this intense concern with where our cruising fees go - the Princess website spells it out - it is spread among all cruise salaries. End of story. 

 

I guess I'm just a little mystified by the constant attempts to analyze this longstanding cost of cruising. If you don't like it - guess what, you can still remove it although I don't support that. Most just factor it in to the cost of their cruise and move on.

 

And if you want to tip extra for great service above and beyond you still can. Much ado about nothing really.

[JGmf]

Uggh.

 

The policy is not new.

 

People who are overly clever and don't pay the DSC/gratuity add-on under the guise of being clever, sanctimonious, and/or "know better who to tip and who not to" are just being cheap. 

 

Sorry, paying the DSC/gratuity is just the cost of the cruise, baked into the business model.

[alwalaska]

2 minutes ago, karatemom2 said:

 

Respectfully, can I ask why? If you are paying the same amount via any method - whether it be through envelopes, daily CA charge, or added to upfront cruise fee does it really make any difference how the sausage gets made? I'm not being argumentative, just truly trying to understand all of the angst from some people around this issue.

 

The cost is the cost - and except for those people who use the opportunity to remove the charges since Princess still allows it - for the rest who pay either via a package, or alacarte, or in advance, or onboard, or with OBC what is the big deal around how it is paid and how it is allocated? 

I don't analyze how my dollars are split up when I go to a restaurant and pay the bill, service fee, or tip. I don't try to figure out at the grocery store how much of the amount I'm paying for my eggs goes to salaries, overhead, rent, etc. When I stay at a hotel and tip the bellboy or housekeeper a few dollars for services, I don't spend a minute trying to figure out how much of the daily resort fee goes to paying their salaries. So why this intense concern with where our cruising fees go - the Princess website spells it out - it is spread among all cruise salaries. End of story. 

 

I guess I'm just a little mystified by the constant attempts to analyze this longstanding cost of cruising. If you don't like it - guess what, you can still remove it although I don't support that. Most just factor it in to the cost of their cruise and move on.

 

And if you want to tip extra for great service above and beyond you still can. Much ado about nothing really.

Are you asking why I say to not remove the automatic gratuities or why I wish they would incorporate the cost into the cruise or go back to the envelopes?

If the first, please reread my first paragraph. For the 2nd, it would remove all of these tipping questions and threads if they either incorporated it into the price of the cruise or went back to the envelopes method. 

[chengkp75]

3 hours ago, Interestedcruisefan said:

We are subsidising an entire organisation on Princess. Electricians, plumbers you name it we are topping up their wages

I won't argue whether the DSC is right or not, but I will break my 1 post rule because this "fact" is not true.  The technical departments (deck and engine, including those electricians and plumbers) are represented by different collective bargaining agreements, and are not part of any DSC pool, any more than an officer (deck or engine) or hotel supervisor (those with stripes) is.

[whitecap]

6 minutes ago, TRLD said:

I wonder if those that remove their gratuities and give out envelops give them out each day to dining room staff  or those that work in the buffet that provide service.  

Quick question for ya TRLD:  When you pay the "Crew Appreciation" how can one determine if the room steward, dining room staff, buffet staff, laundry personnel or anyone else actually received any part of the gratuities you paid?  It would be nice to think that they did, but because it goes into a pool, under the control of Princess and distributed "fleet wide", I'm not sure that anyone can factually say that they did. If there is a way, please let me know. Thanks

[Oceansaway17]

I often wonder what happens when folks stop going to MDR and go to the buffet.

I know they scan and keep track of when folks use the MDR.  I wonder if they're distribute the money away from those waiters who have fewer tables.

In the past I have gotten phone calls asking why I have not returned to the MDR

 

I agree we will not know for sure how it all is handled.  I know Disney provides a printout to passengers with dollar amounts for waiter, asst waiter, and room steward.

I think of all the crew, room stewards work the hardest and I always tuck away some money in cash to give them at the end of the cruise. 

[Teechur]

1 hour ago, ldubs said:

 

I wonder what percent of passengers remove the auto-gratuities.  Back in the good old envelope days, the number of empty dinner seats on the last night was pretty significant.   

The "envelope days" kept me away from cruising for decades. I like to know what a trip will cost me upfront. I would never remove gratuities and also tip generously on top of it. If the cruise lines included the gratuities as part of the fare, it would be an improvement. 👍

[karatemom2]

2 minutes ago, Teechur said:

The "envelope days" kept me away from cruising for decades. I like to know what a trip will cost me upfront. I would never remove gratuities and also tip generously on top of it. If the cruise lines included the gratuities as part of the fare, it would be an improvement. 👍

 
I always hated the envelope situation as well. There was a weird subservience feeling to it and it was just awkward. Love knowing my crew appreciation is automatic these days and extra tips to anyone I choose is based on heartfelt extra thanks and appreciation and is received in that way as opposed to what prior felt like almost a class system that was weird for both giver and receiver. 

[FeliciaB]

1 hour ago, dreams_of_travel said:

This whole discussion has been interesting.  I used to get the Princess Plus with every cruise b/c I thought it was a good value, but not any more, for various reasons.  As I now book standard cruise fares, I am wondering how to reconcile/approach the automatic cruise appreciation, as well as the auto gratuity placed on drinks.  In theory if I allow the automatic cruise appreciation, then I shouldn't have to pay any gratuity on drinks I order.  In that line of thought, what percentage would one calculate is for the front line service staff (room steward, dining room, bar)?  Not trying to be "stingy", just not wanting to pay more for something I'm already paying. 🤷🏻‍♀️ 

 

ETA: Additional question - If I keep the auto gratuity/cruise appreciation, can I remove the per drink 18% charge?

The auto gratuity only covers the included food and beverage service (not anything with an additional fee) and the room attendant.  If you choose to make additional purchases of specialty dining, or non included beverages or spa services, they automatically add the tip to what you are paying. So you aren't paying double gratuities when 18% is added to your drink purchases.  

[TRLD]

51 minutes ago, whitecap said:

Quick question for ya TRLD:  When you pay the "Crew Appreciation" how can one determine if the room steward, dining room staff, buffet staff, laundry personnel or anyone else actually received any part of the gratuities you paid?  It would be nice to think that they did, but because it goes into a pool, under the control of Princess and distributed "fleet wide", I'm not sure that anyone can factually say that they did. If there is a way, please let me know. Thanks

Depends upon how you mean actually received.

 

The fact that all of the money going into the pool, except for credit card fees, is paid out to members of the pool is pretty certain based upon accounting rules and financial filings.

 

That there is a formula that determines allocation by position is also pretty certain.

 

Exactly what that formula is, is not public, and exactly what percentage is allocated to bonuses, vs core allocation is not published.

 

The fact that the crew contracts, for those that a pool eligible, include language that a portion of their compensation is from the pool is known.

 

Exactly how much any one employee gets from the pool would not be known, just as  what any employee in any given company makes would not be public.

 

So in summary based upon accounting regulations and maritime employee contract law we can be certain that 1. the monies received except for actual credit card fees do go to members of the pool. 2. The  employees that are members of that pool have that in their contract.

 

Anything more specific is not public. 

 

In many ways what you are asking is can we be certain that a cruise line employee is actually getting their paycheck.  Yes we can. Do we know the exact amount no.

Edited May 29 by TRLD

[TRLD]

45 minutes ago, Oceansaway17 said:

I often wonder what happens when folks stop going to MDR and go to the buffet.

I know they scan and keep track of when folks use the MDR.  I wonder if they're distribute the money away from those waiters who have fewer tables.

In the past I have gotten phone calls asking why I have not returned to the MDR

 

I agree we will not know for sure how it all is handled.  I know Disney provides a printout to passengers with dollar amounts for waiter, asst waiter, and room steward.

I think of all the crew, room stewards work the hardest and I always tuck away some money in cash to give them at the end of the cruise. 

Let me put this a different way.

 

Would you penalize a member of the staff because they happened to be assigned to a less utilized area of the ship?  Doing so would impact moral because then someone's compensation could be negatively impacted just by assignment. Kind of like the pre fleet pool days when one could be impacted just by getting assigned to a ship sailing from one port vs another.

 

From what I have been told the majority is allocated by position fleet wide, with a percentage being allocated by performance bonuses.

[Shmoo here]

8 hours ago, Interestedcruisefan said:

Any cruise I cruise on from now on I'm removing any tips and paying cash to those who serve me well

Typically, if a direct cash tip is given to a crew member, they have to turn it in, and if the passenger has removed the auto gratuity it goes into the pool to be shared.  If the auto gratuity is not removed, the cash tip is returned to the crew member you gave it to.

 

 

 

 

[whitecap]

3 minutes ago, TRLD said:

Depends upon how you mean actually received.

 

The fact that all of the money going into the pool, except for credit card fees, is paid out to members of the pool is pretty certain based upon accounting rules and financial filings.

 

That there is a formula that determines allocation by position is also pretty certain.

 

Exactly what that formula is, is not public, and exactly what percentage is allocated to bonuses, vs core allocation is not published.

 

The fact that the crew contracts, for those that a pool eligible, include language that a portion of their compensation is from the pool is known.

 

Exactly how much any one employee gets from the pool would not be known, just as  what any employee in any given company makes would not be public.

 

So in summary based upon accounting regulations and maritime employee contract law we can be certain that 1. the monies received except for actual credit card fees do go to members of the pool. 2. The  employees that are members of that pool have that in their contract.

 

Anything more specific is not public.

To clarify:  How do you know that your room steward received/was given/handed/paid/put cash in his or her pocket, any part of the paid gratuities?

[TRLD]

2 minutes ago, whitecap said:

To clarify:  How do you know that your room steward received/was given/handed/paid/put cash in his or her pocket, any part of the paid gratuities?

Pretty clear such payments are part of their employment contract.

 

As such pretty clear they are receiving fund from the pool. 

 

We do not know more details, just as we do not know their salary.

 

 

Edited May 29 by TRLD