Carnival Cruise Line just increased its automatic gratuities on drinks (both alcohol and non-alcohol) from 15% to 18%.

Automatic gratuities result in money being deducted directly from the guest’s accounts.

A Carnival employee sent a copy of a letter from Richard Morse, Carnival’s Senior Vice President of Hotel Operations, explaining that from the the 3% increase, 1.5% will go to the Carnival server and the remaining 1.5% will go into a pool to fund Carnival expenses including the costs of  uniforms and return airline tickets for crew members.

This development was first reported in an article by the popular Crew-Center website. When I posted this information on our Cruise Law News’ Facebook page, this is how cruise passengers reacted:

  • Greedy bastards! So WE are paying their increased salary, not the rich cruise lines! 😡 
  • They should be paying for benefits and employees uniforms, etc., not us!
  • Raise prices. Tips should be part of fare.
  • Next we will have to pay for the fuel you nickel and dime us guests more and more every year to pay for all your new ships you keep building.
  • Total and utter rip-off.
  • CEO will get how many million $$$$$$$ bonus for increasing profit??
  • . . . so where is that increase going ? uniforms and return ticket lol….

The letter (image above), dated November 29, 2018, sent to all beverage positions is itemized below:

“We are pleased to announce effective on sailings starting on or after December 1st, the automatic gratuity added to the guests’ check for all beverage sales and a la carte dining outlets will increase from 15% to 18%. In addition the extra tip line will remain on all the guests’ checks. This enables our guests to add any additional extra gratuity they deem appropriate. This increase will reflect your first paycheck of December 2018.

From this 3% increase, 1.5% will go to server and remaining 1.5% will go into the ASP pool. As you know the ASP pool funds employee compensation and benefit programs that you receive; including bar level pay, itinerary stipend pay, as well as free uniform and return airline tickets.

Our Bartenders and Bar Waiters lead the cruise industry in compensation. This is a result on everyone’s hard work and efforts to increase overall bar sales as well as the success of the Working Smarter program. As we look forward to 2019, we expect this trend to continue and this will ensure that Carnival Cruise Line remains the employer of choice.

As you know the Beverage Team plays a vital role in creating Fun Memorable Vacations for our guests. I want to take this opportunity to thank you for your Positive Attitude and for the Pride you show in our company.”

It is rather amazing to watch a cruise line, incorporated in Panama where it registers its cruise ships in order to avoid U.S. income taxes, requiring its U.S. guests, who pay their taxes, to pay gratuities which are going to pay for the crew employees’ uniforms and airline tickets!

Automatic gratuities is an issue involving all of the major cruise lines.  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. We have written about this issue many times, including Royal Caribbean, NCL and Carnival.

November 2, 2018 Update: We received the following statement from Carnival:

“We have increased the bar gratuity to 18% which is in line with the industry and hotel and restaurants on land.  Those funds are shared across all crew members who support the beverage operations, including those our guests may not see but are working to stock, clean and run equipment and support tasks.  A very small portion of the gratuity pool funds items that crew members normally cover beyond what the company pays for in travel and uniform costs.

Our crew appreciate everything our guests do for them. They work very hard and understand the policies in place. The salary Carnival pays them and the gratuities our guests give allows our crew to provide a better for life for themselves and their family.  And they are also supportive of how we administer the pool portion of the gratuity which fully and exclusively benefits our shipboard employees.”

November 4, 2018 Update: Carnival’s website claims that: “It is customary for our guests to extend gratuities to the shipboard staff in appreciation for their hard work and exceptional service. 100% of your gratuities are distributed to the crew who you interact with, such as your stateroom attendants, dining, bar and culinary services staff, as well as others who work behind the scenes to enhance your overall cruise experience.”

This appears to be false considering that Carnival is using half of the increase in the drink gratuities to pay for things like uniform and travel costs. It also appears questionable whether customers can remove pre-paid gratuities on drink packages.

The Sun newspaper reported on the gratuity increase today.

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

Royal CaribbeanTwo popular cruise blogs, the Royal Caribbean Blog and Cruise Fever, are reporting that Royal Caribbean will soon begin to charge its guests a fee of $7.95 for room service from the All Day Menu and the American Section of the breakfast menu.

Cruise guests reportedly will still be able to order complimentary continental breakfast without incurring additional fees. Guests in suites will not be charged service fees.

The service fee will begin on sailings after March 27, 2017.

Royal Caribbean announced the change on its Twitter feed, much to the disappointment of its followers.

Royal Caribbean follows other cruise lines, like NCL (Read: NCL Gouges Guests with New Charges), which also charges a $7.95 room service charge. Carnival also announced a similar fee several years ago.

Most of the major cruise lines have been accused of nickel-and-diming passengers. Many cruise passengers have complained that room service should be included in the traditional inclusive-cruise fares.

Don’t think for a second that the new room service charges are for the hard working crew members.

Marginal increases in services like room service puts big bucks into the cruise executives’ pockets.

NCL’s CEO Frank Del Rio said in May 2015: “… we have looked across the fleet to identify areas where marginal changes that are commensurate with market conditions can be implemented to improve performance. A few examples include a 6.7% average increase in beverage prices, the introduction of a nominal room service fee and lower costs from renegotiated shore excursion agreements. To put into perspective how these small changes can add up quickly, every dollar increase in yield translates to approximately $15 million to the bottom line.

Del Rio collected nearly $32 million in compensation that year (2015).

In June of 2015, Royal Caribbean hiked the automatic daily gratuity on its cruise ships by nearly 8% to $12.95 per person. USA Today wrote at the time that with this increase, a family of four will pay more than $350 in service charges on a typical seven-night cruise — one of the highest levies in the cruise business.

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

Photo credit: Jim Walker

Update: We are receiving a number of humorous comments to the article on our Facebook discussion, including this one: “Next thing you know they’ll put coin operated toilets in all the cabins.”

Carnival Cruise Line is hiking its gratuity charge by nearly 8 percent, according to an article in Travel Agent Central today. The charge will rise to $12.95 per person, per day for passengers in most cabins, or $13.95 per person, per day for passengers staying in suites, effective September 1, 2016. There is a question posed on the comments section of the article: "does the charge actually go to the staff as a tip? or is it just a fare increase?" The question remain unanswered.    

Carnival said that passengers can lock in the current gratuity rate by pre-paying before Monday, May9, 2016.Carnival Pre-Paid Gratuity Removed

The gratuity charge, which crew members tell me does not all go to the crew members but is diverted to pay salaries or is considered revenue (profit) for the cruise line, is only a suggested amount. Carnival says that passengers can adjust it, or remove it entirely, by visiting the Guest Services desk while onboard the cruise ship.

You can read the Carnival tipping policy here.

Earlier this week, a Facebook page called "Complaining Crewship" complained that Carnival passengers were not paying tips and posted about 30 pages of photographed pages showing the names and cabin numbers of Carnival passengers (from an unidentified ship) who had their prepaid tips removed. There were hundreds and hundreds of passengers who removed their tips. Some of these people may have removed the pre-paid gratuities and paid cash but I was left with an unpleasant feeling that they were largely stiffing the crew.

I then shared the posting and photos on my Facebook page and started a discussion regarding the problem of passengers not tipping the crew members.  A firestorm of controversy then erupted. Some passengers did not like the fact that the names of passengers who removed the tips were revealed. Others expressed their feelings that it was outrageous that many people refused to pay any tips to the hardworking crew members.

Some readers seemed not to care at all about the crew and seemed concerned only with protecting the identity of those removing the tips. I guess the power of Wikileaks, Julian Assage and the Panama Papers escapes them. Several people complained to John Heald, the Carnival head cruise director and blogger at Carnival, about the release of confidential data. Others may have complained to Facebook about the "Complaining Crew ship" page, which may have been a page operated by either current or former Carnival crew members who were tired of being cheated by the guests.

The reality of the matter is that Carnival pays crew members like waiters. bartenders and stateroom attendants a small pittance by the cruise line (around $50 a month) and then requires them to work incredibly long hours, relying on tips for the majority of their compensation.  It’s quite a business model. Carnival incorporated in Panama and registered its cruise ships in Panama and the Bahamas to avoid virtually all taxes and then requires U.S. taxpaying public to pay the bulk of the crew member compensation. But many passengers view a gratuity as reserved only for spectacular and far-beyond-normal service. These guests obviously don’t tip at all or only occasionally and say that it’s the cruise line’s responsibility to pay the ship employees.        

Well, the original post by "Complaining Crewship" seem to have been taken down (as well as the entire Facebook page), voluntarily or involuntarily I can’t tell, and so did the photos I shared in the process.  But I had previously copied them all and am posting a few here (with the names redacted of those who removed their tips) to show the large number of tips removed.

Cruise lines do not like their ship employees to "out" the guests or to name and shame them, although these type of people seem to be largely deadbeats in my view, or to reveal the cruise line’s unfair treatment of the hard working crew members. For example, when a Royal Caribbean created a You Tube video a few years ago showing that the cruise line was in essence stealing automatic gratuities from the crew, Royal Caribbean threatened the crew members with legal action and petitioned You Tube to ban the video. Read: "Screw the Crew" Video: Banned By Royal Caribbean & YouTube!      

So the cruise line gratuity scam continues.  Carnival will create the impression that the increased gratuities are for the crew who, in reality, will never see a penny of the increase. Many passengers will remove all of the gratuities in their entirely and hide their cheapness behind their anonymity.

Carnival Pre-Paid Gratuity Removal

 

Michele Paige Florida Caribbean Cruise Association Mickey ArisonA newspaper in the Cayman Islands reports that Carnival is threatening to pull out of the Cayman Islands after a tender boat operator, Cayman Marine Services, made a tiny increase in the price for transporting passengers to and from cruise ships in George Town.

The newspaper states that Cayman Islands Marine Services operates 16 tenders in the George Town harbor and proposed an increase of 75 cents to take cruise passengers to and from port. The increase will take place in three phases over this year. On January 1st, the tender company increased the price by 25 cents. The next increases will be in June and then in October. 

The modest increase is the first increase in five years. The newspaper states that the increase reflects rising costs for labor, fuel, maintenance and materials. 

Carnival objects to the increase but is trying to keep its name out of the dispute. The Florida Caribbean Cruise Association (FCCA), a Miami-based trade association for the cruise industry, is complaining of Carnival’s behalf. FCCA president Michele Paige (photo above with Carnival CEO Micky Arison) reportedly said that the cruise industry is “not happy” with the 25 cent increase and is threatening that the increase will somehow “drastically affect” the number of ships arriving in Grand Cayman.

Paige is quoted: "this is a business and we are here to make a profit. If you have a 3,000-passenger ship, that is an extra $2,500 – and that doesn’t include the crew. If there are 50 trips per year, that is $150,000, and that erodes profit.”

The proposed price increase seems rather modest to me, particularly since there has been no increase dating back to 2007 or 2008.  And let’s keep things in perspective. Carnival CEO Micky Arison paid himself a $90,000,000 bonuses last month. 

January 7, 2012 Update: Follow the comments on this story on our Facebook page.