P&O Cruises announced last week that it is ending the mandatory daily service charges effective May 2019, according to the Express newspaper in London.

Cruise passengers seem to have welcomed the news, thinking that the change will make cruises cheaper for them.

The majority of cruise passengers in the British market seem to have resented the mandatory charges, stating that they always remove the charges and, allegedly, decide who and how much to tip.  Many correctly view the mandatory charges as an effort by the cruise line to require passengers subsidize the meager wages paid to crew members or, worse, to divert the tips as profits for the company.

Many crew members state that passengers who stand in line to remove the service charges rarely tip at the end of the cruise.

Several years ago I posted photographs of pages and pages of documents showing that passengers routinely remove automatic gratuities from their sail and sign accounts. A crew member sent me the photos of the removed gratuities. Read: Carnival Hikes Pre-Paid Gratuties But Will Passengers Secretly Remove Tips?

There appears to be a significant difference between British based cruise lines and U.S. based cruise lines like Carnival, NCL and Royal Caribbean. These cruise line routinely gouge their customers with high auto-gratuities which many believe are pocketed by the companies to increase profits.

Cruise passengers may like the news of no more auto-tips on P&O Cruises because they can keep money in their pockets (and out of the pockets of the cruise lines), but what about the hard-working crew members?

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

 

NCL Norwegian Cruise LineNorwegian Cruise Line (NCL) plans to increase the automatic gratuities charged to its cruise passengers, effective April 1, 2018. Travel Pulse states that NCL informed travel agents of the so-called “nominal adjustment” to its daily service charges today.

The new rates for standard cabins will increase from $13.99 to $14.50 per passenger per day. The new gratuities for suites will increase from $16.99 to $17.50 per person per day.

Just last year, NCL raised gratuities on April 1st from $13.50 per person, per day, to $13.99 (except for the Norwegian Sky where NCL increased daily gratuities to $18.99 a day (an increase over 40%). NCL increased daily gratuities for suites from $15.50 to $16.99 on all of its ships (again, except for the Sky where it increased the daily charge to $21.99).

Regarding the Norwegian Sky and Norwegian Sun, the gratuities will increase from $18.99  to $19.99 for cabins and from $21.99 to $22.99 for suites, per person per day.  

It seems that there is no limit to the greed of cruise executives. 

Del Rio’s NCL has gouged its customers before, with extra charges, including increased room services charges, automatic gratuities and restaurant cover charges. He made this statement at an earning conference in 2015: "… we have looked across the fleet to identify areas where marginal changes … 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."

Of course, all the major cruise lines nickel-and-dime their customers. Royal Caribbean began charging for room service  last year and, in the past, increased its gratuities while attempting to create the appearance that the increases were for its hard-working crew members (Read: Loyal to Royal? Expect to Pay Higher Gratuities! And the Money’s Not for the Crew). Carnival Corp. did exactly the same thing while it also pocketed the increased gratuities (Read: Carnival Hikes Pre-Paid Gratuities But Will Passengers Secretly Remove Tips?)

Cruise CEO’s like Del Rio, who collected nearly $32 million in 2015 alone, have an unhealthy, unchecked pursuit of profits in an industry which has always overreached into the American public’s pockets. The cruise industry pays virtually no taxes, exploits their workers from around the world, and still nickle-and-dimes their tax-paying customers whenever they have a chance.

Of course, as crew members tell me, the increased gratuities go into the cruise line’s coffers, not into the pockets of the hard working crew members.

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

Photo credit: Coolcaesar CC BY-SA 3.0, commons / wikimedia.

Shortly after the new year, Royal Caribbean will again increase the automatic gratuities which it charges its passengers. Royal Caribbean will hike the automatic gratuities which it adds onto its guests’ accounts (by more than 7%) to $14.50 per person, per day. Passengers who stay in suites will pay even more, $17.50 per person, per day.

USA Today explains that a family of four will now pay more than $400 in automatic gratuities on a 7 night cruise which is one of the highest gratuities in the cruise business. 

The increase is the third in three years at the line. In early 2015, the Royal Caribbean’s gratuity fee Royal Caribbean Automatic Gratutieswas $12.

Like rival cruise lines, Royal Caribbean has been drastically increasing its automatic gratuities. USA Today says that Royal Caribbean’s gratuity charge has now jumped by nearly 21% since May 2015 (more than five times the rate of inflation). 

Cruise lines suggest that the extra gratuities go to the hard working crew members, but that’s hardly true. Crew members used to receive substantially more when passengers used to directly hand them money as tips. Cabin attendants and waiters have stated that the auto gratuities go to the cruise lines which take a cut and distribute some of the money to non-tip earning crew members. 

The Swiss TravelNews site rightly contends that "the passengers indirectly pay a massive wage component of these employees."

Royal Caribbean says that passengers can lower or remove the automatic gratuities by by visiting the Guest Services desk. Expect this to happen, as many passengers don’t like to pay gratuities when the service is average or to pay what the cruise lines should already be paying in wages. The same thing happened when Carnival hiked its auto gratuities. Carnival Hikes Pre-Paid Gratuities But Will Passengers Secretly Remove Tips?

We reported on a prior automatic gratuity increase in 2015 in Loyal to Royal? Expect to Pay Higher Gratuities! (And the Money’s Not for the Crew). Not coincidentally, CEO Richard Fain has RCL stock now worth over $110,000,000. 

Matt Hochberg’s Royal Caribbean Blog as the first to announce the gratuity increase. 

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

 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."

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!

 

https://youtube.com/watch?v=Mtaakkly_qU%3Frel%3D0

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.  

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. 

From time to time, Cruise Law News has a guest blogger. Caitlin Burke is a recent graduate from the University of Florida.  She majored in Recreation, Parks and Sport Management.  Ms. Burke wrote a senior honor’s thesis entitled a "Qualitative Study of Victimization and Legal Issues Relevant to Cruise Ships."  She is working as a case manager for Walker & O’Neill as she prepares for law school.  

Caitlin discusses her experiences in a cruise port of call two years ago, and offers 5 safety tips for students:

In March of 2008 I took a cruise over Spring Break with one of my friends from the University of Dominican Republic - Cruise - Port of Call - Taxi Ride Florida.  It was technically my "last spring break” so naturally I wanted to make the most of it.  I decided to take a 9 day cruise.

I boarded the Norwegian Pearl and set sail around 5 p.m., pina colada in hand.

The first night was like everyone else’s first night of spring break – a mess.  Lots of alcohol, lots of socializing, lots of exploring, lots of alcohol, lots of alcohol . . . lots of alcohol.  (Don’t judge me).  It was indeed a great first night of spring break. Needless to say the next morning my friend and I were feeling slightly under the weather. (I blame the stress and exhaustion of school and midterms, some will argue it was the massive amount of tequila consumed the prior night).

We awoke slightly groggy but ready to disembark and explore our first port of call in the Dominican Republic.  We boarded the small tenders, becoming evermore nauseous as we bounced up and down with every wave.  I bounded off the boat praying I wouldn’t lose the greasy breakfast I had just consumed at the cruise ship breakfast buffet.

Finally on firm land, we looked for a taxi/excursion/attraction to begin our exploration.  At first look, Semana seemed like a tourist hot spot – there was a strip of brightly colored shops and restaurants.  Some of our friends took taxis for informal "tours."  But we walked down the road, window shopping and trying to find something that was more “local” (i.e., less touristy).  As soon as we made it to the end of the strip, we made a right hand turn, which we almost immediately began to regret.

All of a sudden buses, cargo vans, motorcycles, vespas, bicycles all began to fly past us honking, yelling, screaming, hollering, and whistling at us as my friend and I looked at each other in disbelief.

Cruise - Port of Call - SafetyWe continued to walk down the road but felt increasingly uncomfortable. The local men were intensely staring at us, whistling, and making inappropriate comments.  We looked at each other, fear in our eyes, turned around, and bolted back to the tourist strip. Still nauseated from the tugboat ride over, we decided to eat some lunch and let our stomachs settle before returning back to the cruise ship.

We sat at a restaurant that was as close to the cruise ship as possible (also flooded with other passengers from our ship) and ate a burger for three and a half hours.  We were disappointed about not being able to see the island but happy to have made it back unharmed from the 20 feet we ventured off.

After working at a law office that handles only cruise ship related incidents – like shore excursion and port-of-call assaults – I’m thankful that I trusted my gut and did not venture out to see the island.  We were able to see other ports and island destinations in depth as the trip continued, but we regretted even getting off the ship in Semana.  I recommend anyone traveling to foreign ports to be cautious, trust your gut, and don’t venture off if you’re even the least bit skeptical of your surroundings.

Like your mom always tells you, better safe than sorry. 

Caitlin’s 5 Safety Tips for Spring Break:

Cruise - Spring Break Safety Tips1. Don’t drink too much. Have a designated sober person who can look out for the group.

2. Travel in groups. Never let anyone wonder off alone. Even if they say "I’ll be right back," go with them.

3. Always watch your drinks being opened, being prepared, and being poured. Date rape drugs are common and easily accessible on cruise ships and in foreign ports. Do not trust the bartenders or waiters preparing your drinks.

4. Never leave your drink unattended (as college students we tend to our drinks pretty well, so this is probably the easiest rule to abide by).

5. Use your common sense and don’t let your guard down. Crimes occur on cruise ships and in the ports of call.

 

Update March 9, 2010:

Caitlin’s blog was named one of Lexblog’s Ten Best Blogs of 3,000 law blogs for the week!

Way to go Caitlin!