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NCL Gratuities/Service Charges & Cabin Steward


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13 minutes ago, havenfan said:

 

@chengkp75

 

Did you have a sense, when you were working on NCL, of how frequently the DSC failed to make up to the minimum $618? And how frequently the DSC failed to make up to the $1600, or equivalent in those days?

 

At the time I worked there, the MLC was not in effect, so the minimum wage was not a consideration.  Removals of the DSC were a weekly topic at the "revenue meetings" of all department heads onboard.  While the mechanism for removal or adjustment of DSC was different then (you had to go to Guest Services and give a reason for adjustment), it was never a major reduction (if it got above a couple of percent of the total DSC it was a topic of concern).  Major reductions to DSC were typically a result of a major guest service issue (toilets down, power outage, etc), so I was affected by these things, and was painfully aware of major DSC reduction.

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On 4/1/2019 at 4:06 PM, ziggyuk said:

 

This is what really annoys me, the first wedge of the DSC simply makes up the salary to the guaranteed legal minimum, an amount NCL would have to pay even if every guest removed the DSC, all we really do is pay wages on NCLs behalf.

 

This is perfectly demonstrated on the UK's undercover dispatches documentary on Celebrity, the undercover journalists salary and DSC did not make the legal minimum and Celebrity had to make up the shortfall, because the DSC did not exceed the legal minimum wage, he actually gained nothing extra from the generous passengers DSC and took home the same money if nobody had paid the DSC.

 

In a restaurant I now ask if the servers if they get all of the automatic service charge (when one is included) and if they say no I ask for it to be removed and pay the same figure or more as a cash tip.

 

So... the people who remove the DSC (which I will add we don't and can't with NCL in the UK) and pay cash really do have an argument, the cruise line still pay the legal minimum wage to everyone (even behind the scenes) and anything handed in cash goes in the staffs pockets. I accept this meant the behind the scenes people don't have to opportunity to earn above the legal minimum.

 

There is also this claim that all cash tips have to be handed in, who knows if that is true.

 

The customer ALWAYS pays the labour costs of every business in the world.   If you remove the automated tip, you just drive the overall price up, for everybody else.   So, thanks for that. 

 

Whether the labour charges are incorporated into the base fare, or segregated so they are easily identifiable, shouldn't make a lick of difference to you....except that:  the cruise fare is taxable, whereas the post-service DSC is charged as a flat fee.   In addition to the taxes, segregating the DSC / labour costs also manages to make those things non-commissionable to travel agents.  Between taxes & commissions, integrating the costs of labour could probably make that labour about 30% more expensive than the current method. 

 

 

 

On 4/2/2019 at 2:56 AM, Love my butler said:

 

I have spent 25 years on cruise ships and most of the crew does not work 14 hour days.

 

I thought you were a cop?   That's what you've said previously.   Chengkp spent 4 years WORKING on cruise ships, in a management position.   Not quite the same thing as taking cruises from time-to-time.

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1 hour ago, sjbdtz said:

 

The customer ALWAYS pays the labour costs of every business in the world.   If you remove the automated tip, you just drive the overall price up, for everybody else.   So, thanks for that. 

Whether the labour charges are incorporated into the base fare, or segregated so they are easily identifiable, shouldn't make a lick of difference to you....except that:  the cruise fare is taxable, whereas the post-service DSC is charged as a flat fee.   In addition to the taxes, segregating the DSC / labour costs also manages to make those things non-commissionable to travel agents.  Between taxes & commissions, integrating the costs of labour could probably make that labour about 30% more expensive than the current method. 

 

As you per my reply and what you quoted I have never removed a gratuity and it's not even possible for us in the past as it was built into the NCL fare as an all inclusive cruise, so where the "so, thanks for that." comes from I don't know! please as least read before replying.

 

You are of course correct the customer does always pay labour charges one way or another but most sensible people would want a open and transparent system, is that too much to ask for?

 

It 100% does make "a lick of difference" to me how my tip is used:

 

1st example, at my local chinese I regularly left a very generous cast tip for probably 5 years of visits, one day a staff member quietly told us never to leave a tip as the owner pockets it and never passed any onto the staff - so actually it's not always as simple as you like to make it sound. 

 

2nd example, as I stated in what you quoted a service charge does not always go to the staff, famous celebrity chef Gino D'Acampo openly states he keeps a large proportion of the service charge for things like breakages and that is why if im told the staff does not get 100%, I remove the service charge and pay the same as a cash tip which they do keep 100% of.

 

As a consumer we should care a lot more about how our tips are used, to say it does not matter is disrespectful of the people that work hard to ensure we have a great experience, be that in a restaurant or cruise.

 

I don't think you even understood my post, it's not a case of not paying a DSC, it's about those who charge it being more honest, clear and open about how those fees are used and distributed, is that really too much to ask for?

Edited by ziggyuk
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10 minutes ago, ziggyuk said:

 

As you per my reply and what you quoted I have never removed a gratuity and it's not even possible for us in the past as it was built into the NCL fare as an all inclusive cruise, so where the "so, thanks for that." comes from I don't know! please as least read before replying.

 

You are of course correct the customer does always pay labour charges one way or another but most sensible people would want a open and transparent system, is that too much to ask for?

 

It 100% does make "a lick of difference" to me how my tip is used:

 

1st example, at my local chinese I regularly left a very generous cast tip for probably 5 years of visits, one day a staff member quietly told us never to leave a tip as the owner pockets it and never passed any onto the staff - so actually it's not always as simple as you like to make it sound. 

 

2nd example, as I stated in what you quoted a service charge does not always go to the staff, famous celebrity chef Gino D'Acampo openly states he keeps a large proportion of the service charge for things like breakages and that is why if im told the staff does not get 100%, I remove the service charge and pay the same as a cash tip which they do keep 100% of.

 

As a consumer we should care a lot more about how our tips are used, to say it does not matter is disrespectful of the people that work hard to ensure we have a great experience, be that in a restaurant or cruise.

 

I don't think you even understood my post, it's not a case of not paying a DSC, it's about those who charge it being more honest, clear and open about how those fees are used and distributed, is that really too much to ask for?

 

 

Yes, it is.  It's really too much to ask that a business change its entire model to suit your tastes. 

 

Many of us are quite fine with the idea that the cruiseline takes in a total amount of revenue and expends it in such a way that they are able to attract & retain competent staffing at the level required to operate their business.

 

Beyond that, I could not care less whether it's a base fare + commission,  or base + DSC, or base + tipping....because in each of those situations the end result is the same:  employees are willing to work within the established parameters and the business remains viable.   If either of those balances changed, there would be a problem.

 

As for your local chinese, if the employees were disgruntled with their relationship with their employer, there are other employers.   Trying to undermine the business the way they did, deserves termination.

 

As for the celebrity chef I've never heard of,  I'm guessing he establishes a service charge from which he covers server-driven costs (breakage, over-pours, spillage, wrong-order waste, etc.) such that when these cost factors are brought under control by careful competent and able staff, then they retain a higher percentage of the overall charge.   This is in a way, a form of profit sharing.   Don't make expensive mistakes and make more money.  Seems quite reasonable to me.

 

As for the all-inclusive cruise,  they don't offer that in Canada, so I am not approaching the situation from the same perspective.   You commented that "all we really do is pay wages on NCL's behalf",  to which I was responding that of course we do.   We pay wages for all services from all vendors. 

 

My 'thanks for that' comment wasn't directed at you personally...it was phrased  "IF you remove...."   Since you don't, it doesn't apply to you. 

 

 

Stephen

 

 

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21 minutes ago, sjbdtz said:

 

 

Yes, it is.  It's really too much to ask that a business change its entire model to suit your tastes. 

 

Many of us are quite fine with the idea that the cruiseline takes in a total amount of revenue and expends it in such a way that they are able to attract & retain competent staffing at the level required to operate their business.

 

Beyond that, I could not care less whether it's a base fare + commission,  or base + DSC, or base + tipping....because in each of those situations the end result is the same:  employees are willing to work within the established parameters and the business remains viable.   If either of those balances changed, there would be a problem.

 

As for your local chinese, if the employees were disgruntled with their relationship with their employer, there are other employers.   Trying to undermine the business the way they did, deserves termination.

 

As for the celebrity chef I've never heard of,  I'm guessing he establishes a service charge from which he covers server-driven costs (breakage, over-pours, spillage, wrong-order waste, etc.) such that when these cost factors are brought under control by careful competent and able staff, then they retain a higher percentage of the overall charge.   This is in a way, a form of profit sharing.   Don't make expensive mistakes and make more money.  Seems quite reasonable to me.

 

As for the all-inclusive cruise,  they don't offer that in Canada, so I am not approaching the situation from the same perspective.   You commented that "all we really do is pay wages on NCL's behalf",  to which I was responding that of course we do.   We pay wages for all services from all vendors. 

 

My 'thanks for that' comment wasn't directed at you personally...it was phrased  "IF you remove...."   Since you don't, it doesn't apply to you. 

 

 

Stephen

 

 

 

What an attitude, "I could not care less" says it all.

 

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2 minutes ago, ziggyuk said:

 

What an attitude, "I could not care less" says it all.

 

 

Did you read the rest of that phrase?   I could not care less, how a business operates.   If it is capable of sustaining itself, which means satisfying its investors, employees, and customers....I really do not care, what the financial mechanism is.

 

For instance, I do not care that CruiseCritic supports these free bulletin boards with advertising, nor that it is just an arm of a massive travel agency. 

 

I do not care that Facebook sells aggregated behavior data to marketers, because it provides a service to me.   If I start to care, then perhaps I will one day dis-aggregate myself. 

 

I don't have this 'holier than thou' attitude about how business operators run their affairs.   I'm not sure why you think I should.

 

But really, at the end of the day....I don't care, either.

 

 

Stephen

 

 

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3 minutes ago, ziggyuk said:

 

I got that message loud and clear, sad at it is.

 

 

LOL,  clearly you didn't, or you might have explained why you think I should know better than the operator, how to run their enterprise. 

 

You keep conveniently avoiding that question.

 

 

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8 minutes ago, sjbdtz said:

 

 

LOL,  clearly you didn't, or you might have explained why you think I should know better than the operator, how to run their enterprise. 

 

You keep conveniently avoiding that question.

 

 

 

I already did several times if you could be bothered to read it, I do not advocate anyone changing how they run their business, I advocate all businesses who add an additional charge that is labeled a gratuity/dsc/tip saying how this is used/distributed.

But as you state, you couldn't care less about how employees are paid.

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7 minutes ago, ziggyuk said:

 

I already did several times if you could be bothered to read it, I do not advocate anyone changing how they run their business, I advocate all businesses who add an additional charge that is labeled a gratuity/dsc/tip saying how this is used/distributed.

But as you state, you couldn't care less about how employees are paid.

Fair enough.   You don't want them to change their businesses (which don't tell you how the distribute their sources of income),  you just want them to start telling you how they distribute their sources of income (which is changing their business), so you can circumvent the mechanisms they've established (forcing them to change their model).

 

And true enough.   The knowledge that they ARE being compensated (or they'd have left) is sufficient for me.   I have no need to know the intricacies of the compensation arrangements they've agreed with their employers. 

 

Stephen

 

 

Edited by sjbdtz
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There’s a lot of flaming about people who have an issue with tips or DSC not going 100% over and above to staff.  IMHO if an employer is asking me to pay an OPTIONAL charge and STATES it is a gratuity, I am within my rights to want to know that’s the truth.  I am 100% willing to tip employees where appropriate, based on the quality of their service.  OTOH I am NOT willing to voluntarily increase the amount I pay for a product/service that’s advertised for one price if that increase is a higher profit for the business/owner/corporation.  My intent in paying a gratuity is to directly compensate the EMPLOYEE.

 

We’re all accustomed to a menu price being what we pay the restaurant, and then choosing to add a tip, which is given directly to waitstaff or put on the credit card.  The social contract and the way this has always been positioned is it goes to waitstaff, who may (or may not) tip out back-end staff - but the waitstaff have control of the money.  Nowhere in the social contract is there any intimation of the restaurant keeping a cut.  

 

IMHO a gratuity is a gratuity.  For the restaurant to use it to pay salaries, or the takeout place to add it to profit, is theft.  There is a clear understanding the restaurant keeps the amount of the check, and that’s all.  Anything else is dishonest.

 

So for those who are “too interested” in where the DSC goes - what’s wrong with that?  If I am asked to VOLUNTARILY pay more for my fare, I get to decide whether or not I want to - and part of that decision is HONEST disclosure of what I am paying for.  NCL’s profits?  I don’t think so.  Supplement crew wages?  Sure!

 

For the poster up-thread who says “if DSC is added to fare then we all will pay more” - excuse me—if I pay $250 directly for DSC, or the fare goes up by $250, I’m paying the same amount.

 

Regarding taxes, commissions, etc - if DSC is NOT a true gratuity, then it needs to be disclosed and taxed accordingly.  I wonder what the tax treatment is for “beverage service charge & gratuity” (the 20% for UBP, which is higher than the DSC!).

Edited by erdoran
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Right. Everyone just do what feels right for you. No need to fight about it.

 

We adjust our daily tips to $13.50 per person per day for solid service. That is the value we place on the service that is provided. Plus, if we are eating in a specialty restaurant, we've already paid 20% to the staff their. We also aren't eating in the dining room for that evening so that portion of the gratuity could be reduced. If we order room service for breakfast, we tip that person directly. So, the buffet staff doesn't serve us on that day for breakfast. I think it all works itself out in the end. Some tip more, some tip less. More recently, NCL is now starting to "stack" service charges on top of each other, which we reject outright.

 

Now when service exceeds our expectation, we handle that directly with the crew member. If service is not up to par and isn't addressed on board, then we go below our $13.50 base. Our thought is that if NCL can't take care of its crew on a base of $13.50 per person per day, that isn't our problem.  We trust them to allocate it to their hardworking crew and we have no control over what they do with the money they collect from us so we don't fret it. 

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On 4/1/2019 at 12:13 PM, thetaro said:

She said that so she can pocket all the gratitude. This is probably violating the company's policy and could get her fired.

 

I would just say that I am not comfortable with doing that.  End of conversation.  I don't think I would have left an extra tip after that either.  

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On 3/31/2019 at 3:54 PM, 1stTIMECRUZER said:

Instead of "Thank you", our cabin steward said we should ask to have the service charge removed from our bill and give it all to her.  

 

DSC is not refundable onboard and must be requested to be refunded via a form submission to NCL post cruise, so the original post is a bit confusing. 

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16 minutes ago, razor7_us said:

 

 

DSC is not refundable onboard and must be requested to be refunded via a form submission to NCL post cruise, so the original post is a bit confusing. 

I've never asked to have it removed so wouldn't know how to go about it.  I simply shared the encounter we had with our steward.  

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7 hours ago, razor7_us said:

 

 

DSC is not refundable onboard and must be requested to be refunded via a form submission to NCL post cruise, so the original post is a bit confusing. 

I have successfully had the DSC reduced while onboard. No need to submit paperwork after the cruise and wait for someone at NCL to process it. See my post above. Just go to guest services on the last two days of the cruise and it will be done, no questions asked.

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1 hour ago, blcruising said:

I have successfully had the DSC reduced while onboard. No need to submit paperwork after the cruise and wait for someone at NCL to process it. See my post above. Just go to guest services on the last two days of the cruise and it will be done, no questions asked.

 

Yes, but the steward was asking them to cash out the DSC and give the funds directly to her.  Apparently that action requires paperwork and cannot be done as one is departing the ship on the last morning.

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12 hours ago, blcruising said:

Right. Everyone just do what feels right for you. No need to fight about it.

 

We adjust our daily tips to $13.50 per person per day for solid service. That is the value we place on the service that is provided. Plus, if we are eating in a specialty restaurant, we've already paid 20% to the staff their. We also aren't eating in the dining room for that evening so that portion of the gratuity could be reduced. If we order room service for breakfast, we tip that person directly. So, the buffet staff doesn't serve us on that day for breakfast. I think it all works itself out in the end. Some tip more, some tip less. More recently, NCL is now starting to "stack" service charges on top of each other, which we reject outright.

 

Now when service exceeds our expectation, we handle that directly with the crew member. If service is not up to par and isn't addressed on board, then we go below our $13.50 base. Our thought is that if NCL can't take care of its crew on a base of $13.50 per person per day, that isn't our problem.  We trust them to allocate it to their hardworking crew and we have no control over what they do with the money they collect from us so we don't fret it. 

 

 

Wow, so much to unpack here.

 

1. The 2019 value of solid service is no longer $13.50.    

 

2.  If you'd had an 18% or 20% gratuity added on for a specialty dining, bar-service, or spa treatment - those are costs associated with that separate, optional activity.   They help cover costs associated not with the general running of the ship, but with the special activity you selected.   Thus, they should have no impact on the remainder of the ship.

 

3. Just because you have opted not to eat at the dining room one evening, does not mean that the dining room has ceased to function.  The cruiseline has had to maintain staffing on stand-by, in case you decide to pop-in for dessert.   Or a 2nd meal.   Or to skip the specialty and have a full experience at MDR.    Because you have options, there are associated costs.   In much the same way, snowbirds from Canada who reside in Florida for nearly 6 months of the year, still pay full share of Canadian taxes to maintain health, roadways, and other societal benefits - from which they are free to partake should they wish to return to Canada at any time during the winter.  

 

4. The room service brought to your door has quite possibly been assembled at the buffet galley, then  carried from there, to you.   So the implications of room service extend far beyond the person who knocked on the door.   Unless of course they've just brought you uncooked ingredients, on unwashed plates...

 

5. NCL is doing what is required, to compensate for people trying to circumvent the system it has established.   If all passengers would follow the system, I suspect we'd see the rates remain more stable, and end double-taxation.     But no, there's a cabal determined that they know better,  forcing the business to react in order to remain both competitive with base fares, and also in a position to fairly compensate their crew.

 

6. NCL indicates that any additional compensation should absolutely be shared with the crew, but that at no point during the cruise, should any body feel that this is necessary.    Since you haven't paid the base DSC  (reducing it to $13.50 pp pd), until you've caught up with the required amount, your handling things "directly with the crew member' is moot.   That person will need to turn in those funds.

 

7. My thought is that if Air Canada can't afford to give me business class tickets for $1 each way, it isn't my problem.   The reality is that this makes me look like an idiot. 

 

8.  I'd love to know where you work, so that I can frequent your business, and indicate to your employers that I plan to pay 20% less than the indicated amount, and they can just take it out of your pay.    I trust them to maintain their business and since I have no control over what they do with the money they collect from me,  I won't fret it. 

 

 

 

 

Stephen

 

 

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13 hours ago, erdoran said:

There’s a lot of flaming about people who have an issue with tips or DSC not going 100% over and above to staff.  IMHO if an employer is asking me to pay an OPTIONAL charge and STATES it is a gratuity, I am within my rights to want to know that’s the truth.  I am 100% willing to tip employees where appropriate, based on the quality of their service.  OTOH I am NOT willing to voluntarily increase the amount I pay for a product/service that’s advertised for one price if that increase is a higher profit for the business/owner/corporation.  My intent in paying a gratuity is to directly compensate the EMPLOYEE.

 

We’re all accustomed to a menu price being what we pay the restaurant, and then choosing to add a tip, which is given directly to waitstaff or put on the credit card.  The social contract and the way this has always been positioned is it goes to waitstaff, who may (or may not) tip out back-end staff - but the waitstaff have control of the money.  Nowhere in the social contract is there any intimation of the restaurant keeping a cut.  

 

IMHO a gratuity is a gratuity.  For the restaurant to use it to pay salaries, or the takeout place to add it to profit, is theft.  There is a clear understanding the restaurant keeps the amount of the check, and that’s all.  Anything else is dishonest.

 

So for those who are “too interested” in where the DSC goes - what’s wrong with that?  If I am asked to VOLUNTARILY pay more for my fare, I get to decide whether or not I want to - and part of that decision is HONEST disclosure of what I am paying for.  NCL’s profits?  I don’t think so.  Supplement crew wages?  Sure!

 

For the poster up-thread who says “if DSC is added to fare then we all will pay more” - excuse me—if I pay $250 directly for DSC, or the fare goes up by $250, I’m paying the same amount.

 

Regarding taxes, commissions, etc - if DSC is NOT a true gratuity, then it needs to be disclosed and taxed accordingly.  I wonder what the tax treatment is for “beverage service charge & gratuity” (the 20% for UBP, which is higher than the DSC!).

 

In NCL's case, the DSC is a Service Charge.   Their lawyers & accountants have determined it is somehow allocated to a separate fund for compensation, and not to the general fund.  Whether that compensation takes the form of familiarization trips, free uniforms,  $1 beer,  monthly staff parties, or actual monies - is between the employer and employees. 

 

The poster up-thread was me.  And I stand by adding $250 to the base fare makes that $250 both taxable & commissionable.    Sequestering it to a post-cruise  $15 / per day, enables those funds to funnel directly into a separate fund account, non-commissionable and non-taxable.    So there would be a difference, if you front-loaded it into the fare.

 

A gratuity is not the same as a Service Charge.  NCL replaced gratuities by a Service Charge, with the aim of stabilizing incomes for their crew - by no longer needing to rely on the largesse of that week's clients, but by making it a separate Charge.  As for the "voluntary"  (referred to by NCL as  "if we can't fix it,  you can adjust it") aspect, this is most likely the legal loophole which allows them to make it non-taxable and non-commissionable.   It is specifically-worded, for a reason.   I agree with you, that when the full costs including service charges have been satisfied, should you extend a gratuity beyond that, it is absolutely dishonest for any establishment to recapture that. 

 

Regarding tip-outs, those are socially-contracted at set amounts.   A server can look at your $5 tip and know immediately that $2.50 of it is theirs and the remainder will ensure that the back-of-house are also treated well.   It's not typically as though they simply WANT to tip-out.   It's expected.   And in some rare cases, there may be ways in which the restaurant recaptures server-driven costs.    Some pay for uniforms, others deduct the cost from the employee.   Over-pour?   Short till?   Wrong orders?   Breakage?  Send-backs?  Credit-card charge-backs?    Rules vary from place-to-place as to whether those are chargeable to a server.   Is that done through a claw-back of salary, or a tip-out % re-allocated to the establishment, to cover these costs?   My restaurant we didn't do this (tips stayed with employees, and I absorbed those costs), but I can certainly see how a system like this could evolve.   

 

 

Stephen

 

 

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36 minutes ago, sjbdtz said:

 

 

Wow, so much to unpack here.

 

1. The 2019 value of solid service is no longer $13.50.    

 

2.  If you'd had an 18% or 20% gratuity added on for a specialty dining, bar-service, or spa treatment - those are costs associated with that separate, optional activity.   They help cover costs associated not with the general running of the ship, but with the special activity you selected.   Thus, they should have no impact on the remainder of the ship.

 

3. Just because you have opted not to eat at the dining room one evening, does not mean that the dining room has ceased to function.  The cruiseline has had to maintain staffing on stand-by, in case you decide to pop-in for dessert.   Or a 2nd meal.   Or to skip the specialty and have a full experience at MDR.    Because you have options, there are associated costs.   In much the same way, snowbirds from Canada who reside in Florida for nearly 6 months of the year, still pay full share of Canadian taxes to maintain health, roadways, and other societal benefits - from which they are free to partake should they wish to return to Canada at any time during the winter.  

 

4. The room service brought to your door has quite possibly been assembled at the buffet galley, then  carried from there, to you.   So the implications of room service extend far beyond the person who knocked on the door.   Unless of course they've just brought you uncooked ingredients, on unwashed plates...

 

5. NCL is doing what is required, to compensate for people trying to circumvent the system it has established.   If all passengers would follow the system, I suspect we'd see the rates remain more stable, and end double-taxation.     But no, there's a cabal determined that they know better,  forcing the business to react in order to remain both competitive with base fares, and also in a position to fairly compensate their crew.

 

6. NCL indicates that any additional compensation should absolutely be shared with the crew, but that at no point during the cruise, should any body feel that this is necessary.    Since you haven't paid the base DSC  (reducing it to $13.50 pp pd), until you've caught up with the required amount, your handling things "directly with the crew member' is moot.   That person will need to turn in those funds.

 

7. My thought is that if Air Canada can't afford to give me business class tickets for $1 each way, it isn't my problem.   The reality is that this makes me look like an idiot. 

 

8.  I'd love to know where you work, so that I can frequent your business, and indicate to your employers that I plan to pay 20% less than the indicated amount, and they can just take it out of your pay.    I trust them to maintain their business and since I have no control over what they do with the money they collect from me,  I won't fret it. 

 

 

 

 

Stephen

 

 

Once again, we tip based on the value of the services received. Everyone is free to do what feels right to them. That is something we determine, not NCL or anyone on cruisecritic. For security reasons, I don't intend to share where I work, here on the internet. Thank you for sharing your opinions, too.

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20 hours ago, sjbdtz said:

Whether the labour charges are incorporated into the base fare, or segregated so they are easily identifiable, shouldn't make a lick of difference to you....except that:  the cruise fare is taxable, whereas the post-service DSC is charged as a flat fee.   In addition to the taxes, segregating the DSC / labour costs also manages to make those things non-commissionable to travel agents.  Between taxes & commissions, integrating the costs of labour could probably make that labour about 30% more expensive than the current method.

 

Here's an interesting "well, actually" for you. In the US, the cruise line does not pay any federal corporate income tax, so the majority of the line's business is not taxed at all, at least for US bookings. Foreign flagged vessels do not pay our income tax. If the cruise line WERE subject to income tax on its shipboard operations, I believe the daily service charge would be taxed under US law because the employer collects it and then distributes it.

 

NCL is taxed by other governments, so it might hold true that tax considerations are at the top of the list for state and non-US country taxes (they pay tax on UK operations, for instance).

 

I think it's for the benefit of the employees, actually. Some countries do not tax tip income. This isn't a "tax dodge" but a tax policy intended to help their citizens. For instance, the Philippines has a very progressive income tax, but excludes tip income. That helps the cabin steward support his whole family on his NCL income with an inflow of foreign dollars.

 

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