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."

Are Crew Members Receving the Tips You Pay? Watch Royal Caribbean's "Screw the Crew" Scheme

Cruise lines have mastered various way to steal the tips which are intended by passengers to compensate waiters and stateroom attendants.  Carnival's P&O Cruises implemented a policy this year to withhold forwarding the tips paid by cruise passengers if the crew member's performance falls below a 92% rating as determined by management. Read Profits Over People: Carnival's Exploitation of Crew Members is Standard Industry Practice.

This is a real hardship because waiters and cabin attendants are paid a salary of only $50 a month and depend on tips to send money home to their families.

As you can see in the video below, a Royal Caribbean crew member alleges that the cruise line has devised a scheme to systematically divert money intended for the crew into the cruise line's coffers. 

Leave a comment below or leave a comment on our Facebook pageRoyal Caribbean Tipping Policy

February 20, 2013 Update: Royal Caribbean objected to the video, threatened the crew member who posted it, and was successful in taking the video down. So much for freedom of speech.  Read our updated article: "Screw the Crew" Video: Banned By Royal Caribbean & YouTube!

 

Profits Over People: Carnival's Exploitation of Crew Members is Standard Industry Practice

A dozen newspapers in the U.K. have reported on P&O Cruises' decision to pay its crewmembers a basic salary of 75 pence an hour (around $1.20 an hour) which turns out to be approximately $400 a month. Cash tips are being phased out with automatic gratuities being added to the passengers' bills. But rather than forwarding the passengers tips to the crew, the cruise line has threatened to withhold tips if the crewmember's rating falls below 92 percent.

In grade school, a 92 is an "A-."  So if a waiter who works a minimum of 11-12 hours a day (330-360 hours a month) receives a 91 (a "B+"?), management will pocket the tips?  

The Guardian newspaper reports that P&O Cruises justifies the move claiming that it is actually "good" for the crewmembers because many tourists don't tip.  It quotes David Dingle, CEO of Carnival UK, in charge of P&O cruise lines, saying that the crew were allegedly "much happier" and P&O's pay scale is "standard for the industry."

Some passengers reported that many of the crewmembers on a P&O cruise ship, mostly Indians, were India - Impoverished Crew - Exploitationat the point of tears upon hearing the news.

Carnival U.K. CEO Dingle tells the Guardian that "we have a manning office in Mumbai. There are queues out on to the street."  Ah, the desperate lining up, praying that Mr. Dingle will bestow them with the opportunity to work 350 hours a month for $400.

This no reason to exploit people.  But it is a revealing insight into why Carnival and P&O exploit their employees. They can and therefore they will. 

The U.N. reports that over 410,000,000 people from India are living below the poverty level.

Dingle is also right about low pay being what he calls "standard for the industry."

Carnival and Royal Caribbean in the U.S. pay cleaners from Jamaica as little as $545 a month. They expect them to grind out 12 hours days for 6 to 8 months straight.  For a 31-day-month, that's 372 hours for $545, less than $1.50 an hour.  And when the crewmembers' bodies break, the cruise lines dump them back home without medical care and treatment. 

Corporate Watch has an interesting article which characterizes the low P&O pay as shameful.  Fares for the Carnival Legend range between $2,798 and $6,458 per passenger for a 12 day cruise around northern Europe. Yet, P&O workers would need to work for 500 days straight to pay for a cruise themselves, assuming that they did not spend a single penny of their wages.

Carnival Corporation has annual revenues of $15.8 billion in 2011 and profits of $2.2 billion.  Micky Arison is Florida's richest person with a net worth of many billions.  But Arison is no Gandhi.  You will find him counting his billions on his 200' super-yacht or on the front row of the AA arena in Miami watching his hundred million dollar super-star basketball players.  Trust me, he's not worried about Indian waiters getting their tips.   

I can't imagine working 350 hours a month for $400, hoping that the guests I slaved away for would reward me a score higher than a 92.  An "A" or no tip?  You would think that a company earning billions a year (tax free to boot) wouldn't jack up a crew member for $150 in tips. But there is no satisfying this type of corporate greed.   

But who cares?  There are many young Indian men in line at the hiring agency in Mumbai hoping to be the next one to be hired to work aboard a P&O cruise ship.  

Cruise Ship Waiter Commits Suicide

BBC News is reporting that a cruise line waiter hanged himself after being accused of stealing money from the tip box on the cruise ship.

The article indicates that an Indian waiter, Sumith Gawas, from Goa, allegedly killed himself in his cabin on the P&O Cruise ship Arcadia while it was docked in Southampton earlier this summer.  Fellow crew members accused Mr. Gawas of taking the money from a self-service restaurant.

A coroner in Southampton just released an official finding that a suicide occurred. The police had previously ruled out any foul play.

Tips are an important issue for the minimally paid waiters and assistant waiters on cruise ships.  Waiters employed by cruise lines like Royal Caribbean are paid only $50 a month in wages and are dependent on the generosity of the passengers.  Although some waiters can earn several thousand of dollars a month in tips while serving all three meals in the main dining room, working in a buffet or self-service restaurant results in very small passenger tips.