USA TODAY Takes A Look At Cruise Ship Gratuities

 USA TODAY published an article today titled USA TODAY's Guide to Cruise Ship Gratuity Charges

This is a topic which we write about quite often, as the cruise lines try to maintain their high profits while building bigger and bigger cruise ships which are getting more expensive to operate.  

Any discussion involving cruise ship gratuities really involves three issues, in my view: (1) cruise lines are dictating that everyone pay a gratuity of a certain amount, regardless of the level of the services, (2) cruise line are diverting monies paid in gratuities to fund the salaries of crew members "behind the scenes" (like cooks, cleaners, etc.) who typically do not receive gratuities, and/or (3) cruise lines are Carnival Cruise Gratuitiesdiverting the income paid in gratuities into the cruise lines' profits?

The article addresses the first issue head-on and points to the general belief of the public that "tipping is a personal matter that should be left to passengers." Many critics of mandatory/automatic gratuities say that a gratuity must be earned; if the guest receives excellent service, they will tip well (sometimes more than the recommended amount), but if the guest believes the service is bad, they will pay a lower amount or perhaps nothing at all. 

But many crew members such as waiters or cabin attendants do not receive any salary at all. They earn 100% of their income from passenger gratuities. For the longest time, Royal Caribbean paid its waiters and cabin attendants received a salary of only $50 a month, although hard working waiters and motivated cabin attendant could collect several thousands of dollars a month from tips and gratuities. But the tips are tighter now and, with the auto-gratuities, less likely to end up with the waiters and cabin attendants. It is unfair for them to work for a pittance. 

Many cruise lines permit the guests to adjust or remove the gratuities while they are on-board the ship. NCL requires its guests to go through a onerous process of filling out forms after the cruise before a gratuity can be lowered or removed. 

Many crew members complain that many passengers wait until the last day of a cruise to remove all of the gratuities from their bills. 

Last year, Carnival crew members published a Facebook post (since taken down) showing the names (subsequently redacted) and cabin numbers of Carnival passengers who removed their automatic tips. Some of these people may have removed the pre-paid gratuities and paid cash but many may have stiffed the crew.

The real problem as I see it is that cruise lines are not being transparent with who exactly receives the automatic gratuities. The USA TODAY article writes that cruise lines say that the increased gratuities "will be passed on to crew members in recognition of their service." But many guests do not want to tip crew members who they never see (such as a galley worker). Many also believe that the cruise lines should pay their crew members decent wages and not require the passengers to be responsible for the crew's salary.

The USA TODAY article touches upon this issue, writing that "some see the charges as a thinly disguised method for cruise lines to push the responsibility for paying crew members to their customers." Disguising the real purpose of a gratuity is a type of fraud, in my opinion, where a cruise guest may believe that he or she is paying the extra gratuity to their wonderful waiter or cabin attendant who went above and beyond for their family for a week, but the reality is that their gratuities are spread throughout the housekeeping and dining room departments to pay salaries as well as for "alternative services," according to Carnival. (See Carnival's explanation of where the tips go here; and Royal Caribbean's explanation here; NCL does not disclose any details as far as I can tell). The USA TODAY article says that "as much as 95% of pay for some cruise ship workers now comes from automatic gratuities, according to CruiseCritic."

And does anyone really trust that the cruise lines are not pocketing the gratuities as part of onboard revenue? The USA TODAY article does not touch this topic. Over 25 million people will sail on cruise ships this year. Whereas the luxury lines like Azamara, Crystal, Seabourn, Regent and SeaDream do not charge automatic gratuities, the mass lines like Carnival, NCL and Royal Caribbean do. If 15 million passengers are charged at a rate of several hundreds of dollars a week in auto-gratuities, there are many hundreds of millions of dollars at play over the course of a year. (Carnival charges an average of over $360 a week for a family of four staying in a standard stateroom). 

NCL's CEO Frank Del Rio said during an earnings conference in 2015 that for every dollar collected in an increased gratuity, NCL earns an extra $15,000,000. Does anyone really think that the crew members are enjoying this extra income?

Between the greedy cruise executives and the miserly passengers who remove gratuities, the hard-working crew members seem to be stuck between a rock and a hard place.

Have a thought? Please leave a comment below or join the discussion on our Facebook page.

April 3, 2017 Update: A crew member wrote today, to me saying: Yes cruise lines are diverting tips to pay salaries of . . . even managers . . they use the tips to pay the bar manager, asst bar manager, housekeeper chief, asst housekeepers manager and food and beverage manager - they all get a slice of the tips."

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Comments (17) Read through and enter the discussion with the form at the end
Paul - April 3, 2017 11:34 AM

Tipping is an individual choice. Some cultures that are thousand of years old do not tip. Go to usa and everyone tips for the slightest thing it's their culture come to Europe and tipping is not so common it is their culture and right. Cruise company should pay their staff and not expect passengers to do so when on holiday. It is not their problem they pay for cruise not wages as an add on.

Emily - April 3, 2017 11:34 AM

I agree. Cruises use to be an affordable vacation for families, now they have begun to nickel and dime customers just like the airlines. If you look at the airline profits, you will see they have made billions off of extra baggage fees. It is my belief that the cruise line is pocketing most of these gratuities in order for the investors to receive higher profits,just like the airlines.

lana - April 3, 2017 12:18 PM

It's time they give each crew memeber a decent salary. Stop this slavery.

Pacific - April 3, 2017 12:35 PM

If we pay less in tips, we pay more for the cruise. It's pure logic.

Larry Simpson - April 3, 2017 2:12 PM

This being cruise law news my question is what are the laws on slave labor? Or selling a cruise at a price and then adding on the additional monies. Not necessarily a tip but cruise line decided disbursement.
Having cruised since 1980, I personally like to do my own tipping to my room Stewart, dining staff, and others I feel worthy. I might add there are many meals I pay for, such as steakhouse, other specialty dining, extra charged foods from room service. One cruise the dining service was so bad we ate in specialty dining every night for additional charges. (NCL)
I am very tired of listening to other passengers say the poor crew told them they don't get paid. I know I personally see thankfulness in the individuals I have tipped. Often getting hugs and many thanks.
To say they must turn it in is ridiculous. Do they search these people?
I usually tip the night before we get off the ship.
I know there are specific laws which apply to this and would think that an interesting discussion.
Thank you and I look forward to you addressing this.

Steve - April 3, 2017 9:56 PM

Yes, I have personally seen the posted list of guests who had removed their tips . It was on a bulletin board in the galley.

Carnival does indeed use $1 per person for folks behind the scenes ( not otherwise designated). However, every dime designated to the cabin stewards and wait staff teams do go to them. Carnival does not keep it and actually Carnival will make up a percentage of the difference when the crew gets stiffed ( under certain circumstances ).

While I am not crazy about this way of paying the salary of crew, it is my understanding that this method avoids US employment taxes and costs which would run up the cost of my cruise.

Cruise lines should call it a Service Surcharge and collect it at the time of booking like fuel surcharges .

For folks who want it rolled into the cost of the cruise, just pay it when you book...problem solved.

Keith - April 4, 2017 4:14 AM

"Between the greedy cruise executives and the miserly passengers who remove gratuities, the hard-working crew members seem to be stuck between a rock and a hard place."
How can it be considered 'miserly'if gratuities are removed because they are not going directly to the intended crew and therefore it is preferable to tip personally, or perhaps, on principle, a person objects to being charged much more than contracted to?
Many people that cruise are themselves low paid and have scrimped and saved for a lifetime experience. Are they 'miserly' to object to being coerced into paying for 'excellent service' that they have not yet even received?
The moral and legal obligation toward crew fair wages lies 100% with the cruise lines and 0% with the customer. Customer blaming and guilt assignment plays into the hands of the cruise lines and gives them the leverage to continue such practices. People prefer to choose their charitable causes rather than be compelled.

Deepak - April 4, 2017 4:39 AM

Being a Crew( waiter)I know one thing, Cruise Line is a Business and profit is their moto. No matter how it comes. From Crew or Passengers. They Cut down on Crew and raise on passengers. This industry thrives on the misery of their staff. Specially from developing countries. When you give your precious years to work. You expect to make most out of it. And tip is the only tool you have. So low or medium class cruise liners will pay some salary which in their opinion is good. Which is not and expect you to give 200 %. My opinion to this is I am not well paid as per the magnitude of the work I do. So I look forward for tips. It's a real shame that passengers who do auto grats are not aware of reality.

Takehiko Heck - April 4, 2017 8:50 PM

I used to work in a cruise line 5 yrs ago (NCL) I started from galley utility to housekeeping utility then promoted as audio visual technician. I know the passengers paying also for gratuity but the positions I've mention are not included. Gratuities are only goes to the waiters, room attendant and bar staff only. Galley workers and entertainment staff never gets any gratuity, we have fix salary. It's sad because galley and housekeeping utilities are also doing the tough job. Galley utility are the one cleaning all the dishes ftom breakfast to dinner as well as the station while the housekeeping utility vleean all the surface of the ship where passengers go as well as the ships crew areas. Unfortunately we get a low fix salary. I just hope that after 5yrs things have change. I hope that they get a better salary now compare 5yrs ago.

Volker - April 5, 2017 4:12 AM

In Europe Aida, TUI and recently Costa cruises are including the tips into their posted prices. This way the cruise prices are not DECEIVINGLY low and surprise customers that don't read small print. tips can not be removed. But you can add if you want.

That simple. Make it a law.

JIM - April 5, 2017 7:27 AM

Being on the receiving end of this slavery is the hardest part. As spouces, it's really hard to have your other half tell you at the end or middle of the month, that the guests have taken back more than half of their 'salary'and they do. We have mortgages (which are sometimes more than the amount of money they recieve); we have children at college,university and secondary schools which must be maintained financially.
We live in 3rd world countries and often the end of the month represents heartache and tears even though both spouces are working.
It's really sad that such a great nation like America is allowing slavery to still exist when they verbally criticize it.
Am extremely glad someone spoke out about it because it's a dishonor especially for the husbands as they feel worthless and helpless when they cannot adequately provide for their families though they work physically hard to do so.
This slavery must stop.
We have a saying in my country that what you work for is what you live by.They should be fair and pay their workers for keeping the company in business. Everyone knows that these workers are who keep this industry afloat (literally).Do they forget that the good book says, "By the sweat of your brow you shall eat bread"?
Am aware that there are some slackers out there but the majority of cruiseship workers are extremely hard working.Perhaps the tour former needs external motivation, so pay them for what they do and they will work harder to gain more.
THANKS FOR PROVIDING THIS FORUM.

Rick - April 5, 2017 11:04 AM

Crew members also get room and board, no? Like most low paying entry level service jobs, salaries are minimal, even in the USA. The "mandatory" gratuities charged are nominal, while the service on cruise ships is, for the most part, exemplary, yet people have STIFFED the wait staff and stewards since the "good old days of envelopes." We originally wondered why we were the only couple at our dining table on the last night of the cruise! Were the others still packing? I recently gave my stateroom steward, Manuel, a Guayabera shirt he had admired - the buttons were pulling on me anyway. I will usually add something to the prescribed gratuities, for good service and especially great towel animals! On our 44 cruises to date, crew members I have spoken too have not complained about any form of "slavery." Are you sure we're not transferring our American middle class mores to third world cultures and economies? Frankly, our own $7.25 National minimum wage may be more tantamount to "slavery" than $50 a month plus room, board and tips on the high seas!

David P - April 6, 2017 8:38 AM

I agree with Rick. I travelled through Indonesia (where many cruise line workers hail rom) about a year and a half ago, and mentioned to a local that I used to work in the office for a large mass-market cruise line. He commented about how well paid people we're who worked for that cruise line.

Jay - April 8, 2017 11:12 AM

While no doubt a lot of the "gratuity" is diverted at many large mainstream cruise lines, it is a disservice to paint every single company with the same paint brush. Better reporting insists that you differentiate between the lines that give 100% of the gratuities to the workers as stated, do not charge gratuities as part of the cost of the cruise, or engage in the "dirty tricks" as stated in this post. Only if you lay out the differences can a cruise consumer make the right choice with their wallet, whether that is to only take certain cruises, or none at all.

Mosa - April 14, 2017 5:45 PM

I am assistant waiter working for Royal Caribbean, and I can say, even if guests pay gratuities we will not see it if we do not make the ratings. The company will just take our money and we will receive peanuts. No ratings- no money.

Jack - April 24, 2017 8:26 PM

We cruise few times a year and what we don't understand why the cruise line don't add up the tip to the cruise price. NO not in a form of a tip just make the price higher by $100.00 PP. people who want to cruise will pay that as part of cruise fair. Cruises are expensive now and not every one will pay what the cruise expecte you to pay. We pay it befor we live home so we "will forget about it". Some people who use to pay may be not the full amount may not pay any thing the way things are. It is sad because the service received from the CREW make the cruise great and they need to get paid for it.

fred - April 30, 2017 6:13 AM

Remember the honesty of bankers and priests..don't trust cruise line executives..

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