Unpaid Auto-gratuities reimbursed by the cruise line?

Dear experts,

If some passengers remove auto gratuities that go into the staff salary pool, does the cruise line make good the shortfall (and reduce their profits / dent their bottomline) ? :confused:

So that the hard working, overburdened crew do not have a fluctuating income every month? :eek:

I request only those in the know to answer. No guesses please. Thanks.

Edited September 2, 2017 by drsel

No they don't.

Not really wanting to get into another tipping thread, and knowing full well that many don't believe that the cruise lines actually distribute the DSC (I refuse to call it any kind of gratuity) to the crew, let me tell my personal experience.

 

Since 2013, when the Maritime Labor Convention came into force, there is a minimum wage set for all mariners (anyone working on a ship) of all nations. Cruise ship crew who fall into the DSC pool, will be paid a combination of base wage and DSC that generally falls slightly higher than the minimum wage. If the DSC is removed by a passenger, then everyone in the pool gets slightly less that week. If enough people remove/reduce the DSC, then everyone in the pool can get less, until the minimum wage is met. If reductions in DSC drops everyone's wages below the minimum, then and only then will the cruise line have to pony up any money, and only to the level of the minimum wage. So, reducing the DSC does affect the crew's wages to a certain point, and affects the line's bottom line to a certain point.

I have never asked but I assume that there will be less money going to the crew for gratuities.

 

Keith

HAL's present policy:

If you remove the Hotel Service Charge, any cash tips you give a crew member must be turned into their supervisor who turned it in and it is placed in a pool to be divided among all crew. The supervisors give the workers under them a list of those passengers who have removed the service charge. If a crew member keeps that extra cash, then they can be fired.

We always leave the Hotel Service Charge in place and know that extra tips we give, they can keep for themselves.

Not really wanting to get into another tipping thread, and knowing full well that many don't believe that the cruise lines actually distribute the DSC (I refuse to call it any kind of gratuity) to the crew, let me tell my personal experience.

 

Since 2013, when the Maritime Labor Convention came into force, there is a minimum wage set for all mariners (anyone working on a ship) of all nations. Cruise ship crew who fall into the DSC pool, will be paid a combination of base wage and DSC that generally falls slightly higher than the minimum wage. If the DSC is removed by a passenger, then everyone in the pool gets slightly less that week. If enough people remove/reduce the DSC, then everyone in the pool can get less, until the minimum wage is met. If reductions in DSC drops everyone's wages below the minimum, then and only then will the cruise line have to pony up any money, and only to the level of the minimum wage. So, reducing the DSC does affect the crew's wages to a certain point, and affects the line's bottom line to a certain point.

Thanks for the info. On an average, what percentage of passengers remove the DSC? And how often is it that the cruise line has to step in and make good the shortfall ?

Thanks for the info. On an average, what percentage of passengers remove the DSC? And how often is it that the cruise line has to step in and make good the shortfall ?

 

It's been quite a few years since I worked the cruise ships, and it was before the MLC was enacted, so there was no minimum wage at the time. At the time, it was a fairly small percentage that removed the DSC, maybe 3-5%, but I think that number has changed dramatically over the years. I think the cruise line has to make up some wage about 10-15% of the time.

I think the cruise line has to make up some wage about 10-15% of the time.

I am surprised to learn that it is such a high number. That does underscore though why some cruise lines would be so stringent about staff handing in cash tips to the pool. I would expect it could also cause a bit of peer pressure ensuring crew members to turn in cash tips to the pool since they could make a difference for those that do comply.

It's been quite a few years since I worked the cruise ships, and it was before the MLC was enacted, so there was no minimum wage at the time. At the time, it was a fairly small percentage that removed the DSC, maybe 3-5%, but I think that number has changed dramatically over the years. I think the cruise line has to make up some wage about 10-15% of the time.

Thanks again. So what you mean is

1) Nowadays, Over 5% passengers remove the DSC, (but you aren't sure how many)

2) On 85-90% of all cruises, the DSC paid by the vast majority of passengers (upto 95%) is enough to cover MORE than the minimum wage recommended by the MLC

It's been quite a few years since I worked the cruise ships, and it was before the MLC was enacted, so there was no minimum wage at the time. At the time, it was a fairly small percentage that removed the DSC, maybe 3-5%, but I think that number has changed dramatically over the years. I think the cruise line has to make up some wage about 10-15% of the time.

Thanks again. So what you mean is

1) Nowadays, MANY MOREmore than 5% passengers remove the DSC, (but you aren't sure how many)

2) On 85-90% of all cruises, the DSC paid by the vast majority of passengers (upto 95%) is enough to cover MORE than the minimum wage recommended by the MLC

Thanks again. So what you mean is

1) Nowadays, Over 5% passengers remove the DSC, (but you aren't sure how many)

2) On 85-90% of all cruises, the DSC paid by the vast majority of passengers (upto 95%) is enough to cover MORE than the minimum wage recommended by the MLC

 

Quite a bit of speculation on my part, but I've spoken with friends still in the industry in general terms. I would say that in the vast majority of cruises, the DSC that is left in place at least meets the minimum, but does not necessarily exceed it. And when the line has to make up a shortfall, it is not necessarily a large shortfall, that 10-15% would include where the total shortfall for a ship would be a couple of thousand dollars a week.

 

The whole DSC thing is all about peer pressure. It ensures peer pressure to hand in cash tips as noted, and it tries to generate a "team" approach to service, where each crew member ensures that everyone else is up to snuff so everyone's pay is not affected. As I've also noted in many posts regarding the DSC, it also allows the line to shift the onus of reducing crew wages due to poor performance from the line to the passengers "hey, we didn't reduce your wages, blame the passengers who removed the DSC".

But only in 10-15% of cruises, does the cruise line have to chip in and cover the shortfall caused by the dramatically increased number of passengers (well over 5%) removing DSC

But only in 10-15% of cruises, does the cruise line have to chip in and cover the shortfall caused by the dramatically increased number of passengers (well over 5%) removing DSC

 

Again we're quibbling about percentages that are unverifiable and rather meaningless. All I can control in this situation is what I do, I can't control what other pax do, so I make sure my service charges/gratuities are paid. As an aside the way the crew is compensated is really no different than most wait staff here in the states- they work for an hourly minimum wage that is less than for other workers and as long as that plus the tips they receive equals the regular minimum wage the employer need not pay anything extra, but if the worker receives less than the regular minimum wage then the employer has to make up the difference.

Yeah, I'm not going to get down to specifics, as I've said, I'm out of the game, so anything I say can vary from cruise line to cruise line, and the percentages may be well away from what I think. Long and short, as sparks says, removing DSC will affect crew wages up to a certain point. When and how often that happens is closely held by the cruise lines, as it should be, in my opinion.

 

I'm not going to go further with this, as it looks to be leading down the tipping rabbit hole.

And when the line has to make up a shortfall, it is not necessarily a large shortfall, that 10-15% would include where the total shortfall for a ship would be a couple of thousand dollars a week.

Thanks for that clarification. So we're really not talking about a really big impact on the cruise line. And of course the cruise line doesn't get impacted until the Staff has incurred the full impact.

 

The whole DSC thing is all about peer pressure. It ensures peer pressure to hand in cash tips as noted, and it tries to generate a "team" approach to service, where each crew member ensures that everyone else is up to snuff so everyone's pay is not affected. As I've also noted in many posts regarding the DSC, it also allows the line to shift the onus of reducing crew wages due to poor performance from the line to the passengers "hey, we didn't reduce your wages, blame the passengers who removed the DSC".

And the cruise line throws its staff a bone by evaluating performance based on how often a certain crew member's passengers remove the service charge for that crew member, with an eye towards getting rid of the staff members who are bringing the compensation of the entire staff down. Like it or not we passengers are right in the middle of this process. The only way to opt out is to not cruise on cruise lines that have this kind of service charge.

 

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I question the validity of the cruise lines distribution of the DSC funds when they offer prepaid gratuities as a booking bonus.

I question the validity of the cruise lines distribution of the DSC funds when they offer prepaid gratuities as a booking bonus.

 

Accounting 101: the ship's books are still credited for the amount of the DSC even when included as a booking perk for the passengers, The corresponding debit is simply from a promotional liability account rather than cash. Which is why the "free" (sic) gratuity promotions are only run where there is an expected corresponding increase in other revenue to cover the corporate bottom line (ie there has been sufficient sales at regular fares with no perks). So it should be invisible to the ship's pursers where the source of the passenger's contribution to the DSC comes from.

Accounting 101: the ship's books are still credited for the amount of the DSC even when included as a booking perk for the passengers, The corresponding debit is simply from a promotional liability account rather than cash. Which is why the "free" (sic) gratuity promotions are only run where there is an expected corresponding increase in other revenue to cover the corporate bottom line (ie there has been sufficient sales at regular fares with no perks). So it should be invisible to the ship's pursers where the source of the passenger's contribution to the DSC comes from.

Okay so what you're saying is that the DSC is still discretionary then. In other words, with such promotions, the passenger once aboard can still adjust the amount of the gratuity downward if they're dissatisfied by the service - yes?

Okay so what you're saying is that the DSC is still discretionary then. In other words, with such promotions, the passenger once aboard can still adjust the amount of the gratuity downward if they're dissatisfied by the service - yes?

Costa doesn't allow removal of DSC for most nationalities.

Costa doesn't allow removal of DSC for most nationalities.

What about the rest?

Okay so what you're saying is that the DSC is still discretionary then. In other words, with such promotions, the passenger once aboard can still adjust the amount of the gratuity downward if they're dissatisfied by the service - yes?

 

They might be able to do that but I'm sure the small print says that they don't receive what they deduct, it stays with the cruise line.

Where in the fine print does it say that?

 

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Where in the fine print does it say that?

 

This message may have been entered using voice recognition. Please excuse any typos.

 

I couldn't say since I've never booked this type of promotion but I would be greatly surprised it a cruise line didn't cover this base.

I've taken 2 Princess cruises this year that had "prepaid" gratuities as a booking promotion. The charge does not appear on your onboard account. So, you can't remove it. I really don't understand why you would want to remove it in the first place. If you are receiving poor service, report it to the customer desk people and have it rectified. I've never had what I would call poor service on a cruise. For really great service, I give extra to the particular hotel staff member to make sure they get more than the standard amount.

 

 

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I couldn't say since I've never booked this type of promotion but I would be greatly surprised it a cruise line didn't cover this base.

Folks are surprised by what cruise lines do all the time.

 

I've taken 2 Princess cruises this year that had "prepaid" gratuities as a booking promotion. The charge does not appear on your onboard account. So, you can't remove it.

Thanks for the first hand account.