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  #1 (permalink)  
Old March 25th, 2003, 10:39 PM
Bruce Chafkin
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Default Tipping / Salaries

As a cruise line employee, this is a subject near and dear to my heart. Hopefully I can shed a bit of light on a subject that seems to continually confuse the public.

A bit of history first:
In the late 1960s, a fledgling travel company decided to take their new ship, the Sunward, to sail with tourists in the Caribbean. When the travel industry found out that somebody planned to sail a ship in a circle; embarking passengers in a port, sailing for several days, then disembarking them in the same port, everyone had a great laugh. They all agreed that nobody would pay good money to sail in a circle without going anywhere. That`s how this got started.
This company (Kloster) decided to structure their operation as much as possible like the trans-atlantic shipping companies. One of the features of the operation was the idea of using gratuities to pay the bulk of the employee salaries. For those of you who enjoy the grand traditions of cruising - this is one of the oldest and holiest ones.

Why did they decide to do it this way? Who knows? It is a good way to keep operating and administrative costs down - especially when you have a new company.

Today nearly every cruise line company operates in the same manner. They pay an absolutely minimum monthly salary (about $50) to their service personnel and use the incentive of tips to (hopefully) improve the service levels and cover the substantial costs of salaries. This has worked reasonably well for the past 35 years or so.
Is this the best way to do it? Probably not. Is it about to change? Probably not. The system has taken on a life of its own and would be very difficult to completely revamp. Additionally, as most will agree, traditions die hard.

Does the cruising public like this system? Yes and no. Probably the best indicator for acceptance of this system is booking levels and business volume on major cruise lines. The "Big Four" (soon to be the Big Three) Carnival, RCCL, Princess, and NCL all use this tipping system. If the public disliked it very much, they would all patronize cruise line companies that do not use it and those other companies would be the biggest. So far that hasn`t happened.

So now we find ourselves in a situation where tipping is no longer really the optional payment for exceptional service that it once was intended to be. It is now basically considered a payment for providing the expected adequate service. Is this a good thing? Americans have been doing it in land-based restaurants for many decades and you rarely hear any complaints about it.

Now we have a new wrinkle to the system: auto-tipping. Considering the developments so far, this is not such a surprise. Is this a good thing? If you consider tipping as a standard part of your cruise experience cost, it probably is a good idea. It makes it all so much more convenient. If you are one who believes that the cruise lines should double the price of the cruise, pay a decent salary to the crew, and eliminate the tipping system, this new development is not such a good idea.

Now we know that the cruise lines cater to the demands of the public. This is especially important these days, as cruising costs go up, cruising prices go down, the companies are cutting each other `s throats to attract more passengers. Every new innovation is designed to get more paying bodies on a ship. The new ships - especially the mega-liners - cannot afford to sail with a single empty cabin. So why have the cruise lines not jumped on this idea, raising fares, making cruising prices all-inclusive, and doing away with the traditional tipping system? Instead, they seem to be working in the opposite direction. Why?

There are several good reasons:
1. If one MAJOR cruise line wants to raise prices and eliminate tips, all his competitors must do it at the same time. If not, they will take his business away and bankrupt him. The general American cruising public shops three things; price, price, price.

2. Despite a small vocal minority, the general cruising public is rather content with this tipping tradition - much as they are with the tipping tradition on land. It is a comfortable tradition that many people like. Some Cruise Line President did not pluck this information out of the sky. He paid a great deal of money to Ad Agencies and Polling Organizations to find out what the MAJORITY of the public wants. If he doesn`t provide what the MAJORITY wants, he is soon out of business - or absorbed by a competitor.

3. Taxes. Tips at sea are "found money". There are no taxes involved - for anyone. Some nationalities must pay taxes on their shipboard wages. It could be major disincentive for service staff working on ships if they had to pay taxes on all their earnings. This would make it more difficult for cruise lines to hire qualified staff.

So if you don`t like the system, stop complaining. Go out and do something about it. Write a letter to Bob Dickinson at Carnival, offering to pay several hundred dollars more per cruise in order to cover tips, taxes, and adminsitration. After receiving millions of such offers, I am sure that he will quickly change his mind.
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  #2 (permalink)  
Old April 14th, 2003, 02:20 PM
Junior Member
Join Date: Apr 2003
Posts: 2
Default Re: Tipping / Salaries

If I tip the first night of the cruise, or after each special service performed, then does that money go into the pool to be shared with other service personnel?
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  #3 (permalink)  
Old April 15th, 2003, 04:50 PM
Bruce Chafkin
Posts: n/a
Default Re: Re: Tipping / Salaries

That is not an easy question. Many ships - and many outlets on those ships - vote on how they want to do it. In most cases, they live and die as a team. They vote to pool everything.
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bruce, chafkin

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