Norwegian Cruise Line Raises Gratuities Twice in 5 Months

[newmexicoNita]

Raising rates AFTER I paid in full for 11 people on a cruise leaving on Aug 1? Shame on NCL. Last time. I have 170 cruise days with 7 on NCL. NO MORE!!

 

ok, you have the option of paying it before July 31st. So I have to wonder, what is your problem? Plus even with 11 people, if you are talking a 7 day cruise, you are talking a total of $$42.35.

[newmexicoNita]

Reading the thread, it is less about the staff getting a raise but how NCL implements the plan. You pay in full and now they add a fee. That is bait and switch. NCL is committed to a much higher ROI this year, via the CEO and it's coming from added value gimmicks like the airlines. The cruisre world is changing. And NCL will cheapen the product by raising rates at every opportunity. Maybe next cruise we will rent a pillow for the bed!! The fact it is going to staff is not the point. It is the way it was done.

 

I just can't imagine how some of you think? How can you possibly call it bait and switch? If they tell you the cruise ship you are going on is XYZ and then, just prior to sailing they tell you they are giving you a little cash back but changing the itinerary of the ship to ABC that is bait and switch. The rate you paid to sail was per cabin, not per other expenses.

 

Now do I agree the cruise world is changing? Yes, and yes, like the air industry. Do most of us like it? No, but the fact remains, cruising is still a good value for a vacation, still offers options as to what you want and are willing to pay for and it is still a great way to enjoy a family trip. If you think it is changing, you must not have been around when it was a vacation only for the upper class and the high end travelers, when those who could possibly cruise but only on a budget even had different dining and dining times. It wasn't that many years ago when they didn't even have buffets and many ships had only one dining room.

 

I will say, which I have many times in the past few days, the communications could be a little better. The extra charge isn't going to hurt anyone who can afford to cruise. I do have to say, I don't know how else they can implement the program. I do think, they should have given a little more time or announced the change a month or so ago, but in the end it would have been the same. There will always be people who are going to be unhappy. I am sure the company realizes this.

[newmexicoNita]

Prepaying now is what NCL wants to happen. From the look of things it seems that NCL is cash poor. These raises in DSC and the offer to take your money months maybe even a year or more in advance are nothing more then a free loan to NCL. You can easily reduce your DSC to $12 a day on board and pay for the services after they are delivered as is customary. This will also preserve your money and not allow NCL to use you as a 0% loan.

 

6&8

 

Cash poor? There stock sure doesn't indicate that. Where are you getting your idea they are cash poor? Of course paying for so many new ships isn't easy and with 2 more on the building block there costs are not low, but I still would like for you to tell us where you got your information about "cash poor?" Do you really think those few $$ they are getting by raising the DSC is going to help them that much?

[realmccoy]

For our cruise we have had the double bump. We are just going to pre-pay as if you do you can pay the original gratuity price, which for us would be $12pp pd.

[Cruise4Real]

No, no one is sure that 100% of the money is going to the staff. I doubt that it is, otherwise they would call it a "gratuity" and not a "service charge" or in the case of the specialty dining rooms, a "Gratuity and Service Charge".

 

If it were strictly for the employees, and NCL had decided that it was due time for an increase in pay, would they not figure out how much of an increase in DSC would cover the amount needed and then institute the increase as they did only 5 months ago? It seems very odd that the staff, after just getting an increase only 5 months ago, ( presumably, we don't know that they did ) are now presumably getting another one? I don't know about you, but in a lifetime of work, I got only Annual increases aside from the occassional bonus or increase in salary due to promotion, etc. I certainly did not get one 5 months after the last.

 

So are we to assume that NCL's Accounting Department is now equally as incompetent as their PR Department, and they just didn't get it right 5 months ago and now have to increase it again?:rolleyes:. Or do we just assume that NCL wanted more money in their coffers and this is a convenient way of getting it? Giving them the benefit of the doubt, perhaps the increase was seen as too substantial for the average cruiser to swallow whole at one time, so they decided to break it up into two smaller bites;). Bad move IMO, if so. Just makes them look greedy. If they had a competent PR department, they could have smoothed it over somewhat.

 

But, no. No way I believe the staff is getting it all, deserving as they are.

 

I've written on this before, but nobody's picked up on it.

 

In ONE area it's abundantly clear that workers are NOT getting the full value of the auto-gratuities that NCL has been so kind to collect for "them." And that is in beverage service. They tack on 18 percent to the costs of all drinks, under the guise of "gratuity and beverage service charge." My argument:

 

1) NCL drink prices are comparable to drink prices at U.S. land venues.

 

2) NCL "auto-grats" (18 percent) are (on a percentage basis) comparable to what bar wait staff receive in U.S. land venues, especially when you add in the odd dollar or two that so many here say they add to their beverage checks.

 

3) U.S. land-based bar staff receive a very minute base hourly wage, most of their compensation comes in the form of tips they receive.

 

4) U.S. land-based bar staff pay their own room and likely most of their board, while that's provided free to workers on board ship.

 

5) Workers on NCL ships are paid, overall, a LOT less than similar U.S. workers in U.S. land venues.

 

You put all these presumed facts together and, to me, the conclusion is inescapable: that either NCL bar staff receive MUCH better pay than other workers on NCL ships, indeed, better pay than most U.S. bar staff at land venues (!), or (much MUCH more likely) NCL is capturing a truly significant chunk of that "service charge" and doing who knows what with it.

Edited July 18, 2015 by Cruise4Real

[sfaaa]

Even with this increase, some of NCL cruise prices are still the lowest among its competitors especially if they come with extra perks and discount. When I evaluate a cruise, I look at the overall inclusive price I pay, not just a component that makes up the total. Give me a good deal and I will be on a NCL ship. How NCL packages the overall price is hardly a concern to me nor do I care.

Edited July 18, 2015 by sfaaa

[OceanDreaming2]

Not that the stewards, etc. don't work their behinds off for our benefit, but it seems NCL will have the highest DSC of most major cruiselines.

 

HAL = $11.50/$12.00 suite

Cunard = $11.50/$13.50 suite

CCL = $12.00

Royal = $12.95/$15.95 suite

Celebrity = $12.95/$13.45 Aqua/$16.45 suites

NCL = $13.50/$15.50 suites

 

I realize the suite perks differ from cruiseline to cruiseline.

 

We have never, ever, reduced the DSC and, in fact, generally give the steward a additional cash tip. If we have a suite, the butler and concierge are also tipped.

 

NCL has always been our first choice, but with all the changes taking place since del Rio came aboard, we're branching out and trying other lines. It's almost as though NCL wants us to experience what others have to offer.

[tedwesterlyri]

I just can't imagine how some of you think? How can you possibly call it bait and switch? If they tell you the cruise ship you are going on is XYZ and then, just prior to sailing they tell you they are giving you a little cash back but changing the itinerary of the ship to ABC that is bait and switch. The rate you paid to sail was per cabin, not per other expenses.

 

 

 

Now do I agree the cruise world is changing? Yes, and yes, like the air industry. Do most of us like it? No, but the fact remains, cruising is still a good value for a vacation, still offers options as to what you want and are willing to pay for and it is still a great way to enjoy a family trip. If you think it is changing, you must not have been around when it was a vacation only for the upper class and the high end travelers, when those who could possibly cruise but only on a budget even had different dining and dining times. It wasn't that many years ago when they didn't even have buffets and many ships had only one dining room.

 

 

 

I will say, which I have many times in the past few days, the communications could be a little better. The extra charge isn't going to hurt anyone who can afford to cruise. I do have to say, I don't know how else they can implement the program. I do think, they should have given a little more time or announced the change a month or so ago, but in the end it would have been the same. There will always be people who are going to be unhappy. I am sure the company realizes this.

 

 

Not sure why you started with an insult in an otherwise nice reply. What have I read on this thread? 1) at best this was poor public relations by NCL for those that had already booked. 2) The fee does not have to be paid and can be corrected on board the ship or in advance. 3) there is an alarming trend to add more and more to shipboard fees. 4) not sure how much the staff really gets. After 160 cruise days, I can tell you with a little experience, I DONT LIKE THE TRENDS!! When the NCL CEO tells the world they are out to dramatically raise the ROI via fees and "adding value" like the airlines, I DONT LIKE THE TRENDS!! Done. Thanks all.

[conandrob240]

Two increases within a few months is just dumb. It makes a company look disorganized, haphazard and desperate. A planned approach to increases is fine. Raining gratuities every so often is necessary but doing it back to back like this really makes you scratch your head wondering what the heck is going on up in that boardroom.

[cruzsnooze]

There is a solution, remove the auto gratuity and pay in cash to those that serve you directly. I am booked in a suite and have the dinner pkg. I won't pay the 18% for dinner at the specialty every night AND the auto gratuity that goes to the main dining room. I will leave cash on the table (just like at land based restaurants) for breakfast and lunch and pay my cabin steward in cash. If they feel compelled to turn it in (yeah sure) it's their choice.

[NLH Arizona]

There is a solution, remove the auto gratuity and pay in cash to those that serve you directly. I am booked in a suite and have the dinner pkg. I won't pay the 18% for dinner at the specialty every night AND the auto gratuity that goes to the main dining room. I will leave cash on the table (just like at land based restaurants) for breakfast and lunch and pay my cabin steward in cash. If they feel compelled to turn it in (yeah sure) it's their choice.

Or they could just make the DSC mandatory, because if they removed it all together, some will not tip like it was in the old days. Dining rooms on the last night were like dungeons, because some choose not to tip the wait staff. I'd vote to make the DSC mandatory.

[maywell]

There is a solution, remove the auto gratuity and pay in cash to those that serve you directly. I am booked in a suite and have the dinner pkg. I won't pay the 18% for dinner at the specialty every night AND the auto gratuity that goes to the main dining room. I will leave cash on the table (just like at land based restaurants) for breakfast and lunch and pay my cabin steward in cash. If they feel compelled to turn it in (yeah sure) it's their choice.

 

Then don't go into the buffet for breakfast and lunch because they will ask questions about that and will make you pay for it. I wish NCL would pull a Royal Caribbean with banning people from the line for for having a history of not paying the DSC but its not going to happen any time soon, sadly. (before anyone goes off saying when has RCI done that - there are news articles regarding RCI banning people for complaining too much or saying the wrong things at the wrong place / time to staff)

[travelerpair]

Raising rates AFTER I paid in full for 11 people on a cruise leaving on Aug 1? Shame on NCL. Last time. I have 170 cruise days with 7 on NCL. NO MORE!!

You have the right to remove the charges from you account, or change the amount to whatever you choose. Do this at any time and use cash to tip anyone you feel deserves it.

[Cruise4Real]

Then don't go into the buffet for breakfast and lunch because they will ask questions about that and will make you pay for it. I wish NCL would pull a Royal Caribbean with banning people from the line for for having a history of not paying the DSC but its not going to happen any time soon, sadly. (before anyone goes off saying when has RCI done that - there are news articles regarding RCI banning people for complaining too much or saying the wrong things at the wrong place / time to staff)

 

Have you ever tried to reduce or remove DSC? If so, did they actually ask the questions that you say "they will ask"? And did the questions they ask have any bearing on your ability to adjust DSC? Or if you haven't tried to adjust it, how do you know what "they will ask"?

 

Or are you just making stuff up?

[travelerpair]

Thank You. We are in a suite also and I do not understand why the suite rate is higher. Our butlers do not get anything from this fund and depend on the suite passengers. Neither do the concierge. UDP and drink package include tips and you can always use cash in other restaurants.

[travelerpair]

Have you ever tried to reduce or remove DSC? If so, did they actually ask the questions that you say "they will ask"? And did the questions they ask have any bearing on your ability to adjust DSC? Or if you haven't tried to adjust it, how do you know what "they will ask"?

 

Or are you just making stuff up?

We usually have a suite, so we have cancelled the amount all together or adjusted it. We had attitude, but only were asked Why? Replied that we tip in cash when served.

[Cruise4Real]

Or they could just make the DSC mandatory, because if they removed it all together, some will not tip like it was in the old days. Dining rooms on the last night were like dungeons, because some choose not to tip the wait staff. I'd vote to make the DSC mandatory.

 

OMG! I totally agree with you. Of course NCL would have to add the mandatory charge to their base fares, but that would be a boon to transparency and help prospective cruisers get a better picture of overall costs. It would put them initially at something of a competitive disadvantage vis a vis the other lines, but I think ultimately it would be prove to be a positive, for NCL and perhaps the whole industry if the practice spread.

 

And I think it could also lead to increased compensation for the workers. Likely some cruisers would still add some cash tips, just like in the old days, but NCL couldn't count on that and they'd have to pay workers a fair base rate -- equivalent to what they now receive with wage + DSC. This seems like it could be a win for the workers.

[maywell]

Have you ever tried to reduce or remove DSC? If so, did they actually ask the questions that you say "they will ask"? And did the questions they ask have any bearing on your ability to adjust DSC? Or if you haven't tried to adjust it, how do you know what "they will ask"?

 

Or are you just making stuff up?

 

I saw it happen during my last cruise someone trying to remove the DSC on the last seaday and they asked questions about what services did they use or not - they got nailed on the buffet question and if they tip the staff in there. So if taking off the DSC and tip in cash, avoid the buffet before you're going to have to remember the names of the staff members you gave money because Guest Services will call them - just like they did to person when they call up the room steward and ask them if received cash, they answered yes. Guest Services reduced it down to total of $50 for 4 people or pay for all of the drink packages but the person still didn't want to pay for it. (I didn't wait for the answer because my own question got answered but there was no drama at disembark the next day, so person must had paid one of them - that and it look like the show was going to be be while even with security there. )

[NLH Arizona]

OMG! I totally agree with you. Of course NCL would have to add the mandatory charge to their base fares, but that would be a boon to transparency and help prospective cruisers get a better picture of overall costs. It would put them initially at something of a competitive disadvantage vis a vis the other lines, but I think ultimately it would be prove to be a positive, for NCL and perhaps the whole industry if the practice spread.

 

And I think it could also lead to increased compensation for the workers. Likely some cruisers would still add some cash tips, just like in the old days, but NCL couldn't count on that and they'd have to pay workers a fair base rate -- equivalent to what they now receive with wage + DSC. This seems like it could be a win for the workers.

I also think it would be a win win for the crew. Not only would they get their share of the DSC, but there would still be folks that would also tip.

 

Now the down side is for the passengers and NCL. We would have to pay taxes on the amount if included in our fare and NCL would have to pay commission to TAs on it (at least that is what I've always heard) and NCL would have to claim it as income, where I don't believe they have to declare the DSC as income (not sure, but again what I've heard) and yes, as you said, it could possibly put them at a competitive disadvantage when it comes to fare pricing .

 

If they had a different Public Relations team, I think they could actually come out smelling like a rose. NCL could spin this in a way that would give them an advantage over their competition, by running ads that say something like, not only our are fares low (they would only be marginally more if the DSC was included), but we will take care of your DSC. I think since many budget for the DSC, that would give them additional dollars to spend onboard and NCL could possibly garner additional revenue. Unfortunately, I don't see their PR team to be savvy enough to accomplish a goal like this.

[Cruise4Real]

I also think it would be a win win for the crew. Not only would they get their share of the DSC, but there would still be folks that would also tip.

 

Now the down side is for the passengers and NCL. We would have to pay taxes on the amount if included in our fare and NCL would have to pay commission to TAs on it (at least that is what I've always heard) and NCL would have to claim it as income, where I don't believe they have to declare the DSC as income (not sure, but again what I've heard) and yes, as you said, it could possibly put them at a competitive disadvantage when it comes to fare pricing .

 

If they had a different Public Relations team, I think they could actually come out smelling like a rose. NCL could spin this in a way that would give them an advantage over their competition, by running ads that say something like, not only our are fares low (they would only be marginally more if the DSC was included), but we will take care of your DSC. I think since many budget for the DSC, that would give them additional dollars to spend onboard and NCL could possibly garner additional revenue. Unfortunately, I don't see their PR team to be savvy enough to accomplish a goal like this.

 

Not sure what you mean by we would have to pay taxes, you mean sales taxes? The line for port fees and taxes would increase? Given that you pay the same for port fees and taxes whether you're in the Haven or an Inside (for the same cruise) I'm not sure that would happen. I must be missing something, but I didn't understand that point.

 

You're probably right, that commissions paid to TAs might increase, but they get what, 10 percent? More? Less? 10 percent of $100 (one person's DSC for a week) is $10, not that noticeable. Not enough to scotch the whole deal, as far as I'm concerned but I'm sure others might feel differently. And of course many don't even use a TA.

 

To the extent that DSC is a tax dodge (and as you said, who knows), well, my feeling on that is there's already far too much corporate tax avoidance going on! It wouldn't bother me one whit if NCL had a higher tax burden as a result. If they pass the taxes through onto cruisers, well, cruisers are generally speaking pretty affluent (not all, of course, but certainly most) and it probably doesn't surprise you to find out that I wouldn't have much problem with them (actually us, including me :)) picking up a bit more tax (though it wouldn't present as such, merely a marginally higher rate -- again we're talking about some modest tax on $100 per 7 day cruise, or so). At present, with NCL avoiding tax through DSC, all other tax payers are (essentially) subsidizing cruisers, and I think that's wrong. And that's if there really is some tax benefit for NCL by using DSC, and we don't know if that's the case.

 

Finally.....sigh....you're dead right about NCL's inability to make compelling arguments about the benefits of rolling DSC into base fares. That is a real problem, they seem really inept in the area of PR. It should be fixable, and it SHOULD be fixed, not just for this particular proposal but for all areas of NCL's communication with the public. Someday pigs will fly!

[AtlantaCruiser72]

There is a certain part of the fare called NCF (Non-commissionable fare) that clients do not see. It used to be called port charges. It can comprise up to 50% or more of the base fare in most cases. If any cruise line decided to make the gratuites/service charges included they would simply increase the NCF and agents would most likely see no increase in the portion of the fare that they are paid commission on.

 

The real issue here is related to corporate taxes - any revenues generated as "onboard" revenue fall under different corporate taxation rules than cruise fares do, so the more of the revenue stream that can be allocated as "onboard" the better the benefit to corporate taxes.

Edited July 19, 2015 by AtlantaCruiser72

[MisterFidgetpants]

Then don't go into the buffet for breakfast and lunch because they will ask questions about that and will make you pay for it. I wish NCL would pull a Royal Caribbean with banning people from the line for for having a history of not paying the DSC but its not going to happen any time soon, sadly. (before anyone goes off saying when has RCI done that - there are news articles regarding RCI banning people for complaining too much or saying the wrong things at the wrong place / time to staff)

False

[sjbdtz]

I've written on this before, but nobody's picked up on it.

 

In ONE area it's abundantly clear that workers are NOT getting the full value of the auto-gratuities that NCL has been so kind to collect for "them." And that is in beverage service. They tack on 18 percent to the costs of all drinks, under the guise of "gratuity and beverage service charge." My argument:

 

1) NCL drink prices are comparable to drink prices at U.S. land venues.

 

2) NCL "auto-grats" (18 percent) are (on a percentage basis) comparable to what bar wait staff receive in U.S. land venues, especially when you add in the odd dollar or two that so many here say they add to their beverage checks.

 

3) U.S. land-based bar staff receive a very minute base hourly wage, most of their compensation comes in the form of tips they receive.

 

4) U.S. land-based bar staff pay their own room and likely most of their board, while that's provided free to workers on board ship.

 

5) Workers on NCL ships are paid, overall, a LOT less than similar U.S. workers in U.S. land venues.

 

You put all these presumed facts together and, to me, the conclusion is inescapable: that either NCL bar staff receive MUCH better pay than other workers on NCL ships, indeed, better pay than most U.S. bar staff at land venues (!), or (much MUCH more likely) NCL is capturing a truly significant chunk of that "service charge" and doing who knows what with it.

 

 

Huh?

 

Bartenders are paid about $50 / month to subsist on, and then are given an advance against commission (18%) so that they have some basic stability in their income. They are expected to satisfy the advance through their 18% income, failing which they won't last long with the line. Overage is theirs to keep providing they've satisfied past advances as well.

 

But... a bartender isn't the only person working the bar usually. You have several satellite servers who are working the decks, and they also share in the bar's total 18% capture.

 

So without knowing which bar, which drinks, how many bartenders, and how consistent the income is, you have no way of reaching the conclusion you somehow reached.

 

 

 

Thank You. We are in a suite also and I do not understand why the suite rate is higher. Our butlers do not get anything from this fund and depend on the suite passengers. Neither do the concierge. UDP and drink package include tips and you can always use cash in other restaurants.

 

The suite rate is higher because somebody has to clean the Haven itself, bus the tables, serve the hamburgers, clean the lounge, tend the lounge bar, serve at the 'included' haven restaurant (where applicable), on top of the stewards spending longer in each suite to clean it, than a regular cabin.

(which means more stewards required).

 

 

.

[fshagan]

Then don't go into the buffet for breakfast and lunch because they will ask questions about that and will make you pay for it. I wish NCL would pull a Royal Caribbean with banning people from the line for for having a history of not paying the DSC but its not going to happen any time soon, sadly. (before anyone goes off saying when has RCI done that - there are news articles regarding RCI banning people for complaining too much or saying the wrong things at the wrong place / time to staff)

 

I found one story ... a Cruise Critic complainer who, the company thought, was leveraging social media to extract concessions from the company: http://www.expertcruiser.com/advice/royal-caribbean-says-get-out-of-here-to-couple/

 

Companies could do this. The company I work for fires clients from time to time, usually because of they way they treat our support staff (these are really egregious violations; you can't believe what people say to customer service representatives).

[fshagan]

There is a certain part of the fare called NCF (Non-commissionable fare) that clients do not see. It used to be called port charges. It can comprise up to 50% or more of the base fare in most cases. If any cruise line decided to make the gratuites/service charges included they would simply increase the NCF and agents would most likely see no increase in the portion of the fare that they are paid commission on.

 

The real issue here is related to corporate taxes - any revenues generated as "onboard" revenue fall under different corporate taxation rules than cruise fares do, so the more of the revenue stream that can be allocated as "onboard" the better the benefit to corporate taxes.

 

I wondered how the onboard revenue was treated. Tax rules are complex for corporations because they have to recognize income based on the accrual method. I believe that means they have to recognize revenue when it is booked rather than when it is paid (and they probably use a percentage of bookings knowing that some of them are going to cancel).

 

Plus, extra fees work because people don't count the entire cost of the trip. They choose the cheapest airline not realizing that airline has a $25/$40 fee for the first and second bag checked. They will reject airfare by Southwest that is $50 more round trip even though they will be checking 2 bags each way. After long advertising they don't charge bag fees, JetBlue finally succumbed to charging bag fees.

 

While people say they want everything included in the fare, they don't really. Or, at least, their behavior is entirely different from what they say. They will choose the RCCI or CCL cruise over NCL if the fare is $100 less, even if NCL includes all the gratuities in the fare.