New crew appreciation rate

[Djb4CC]

I am very surprised to not find a discussion on the newly announced crew appreciation rate effective Jan 31, 2023.

 

https://www.hollandamerica.com/en_US/crew-appreciation.html

 

While I don’t like increasing costs anymore then the next guy, I don’t have an issue with this increase - the crew does fantastic work and it is what makes my cruise enjoyable.

 

The thing I found interesting in the announcement was this quote:

All of the Crew Appreciation and Service Charge payments made by all guests on all ships in our fleet are pooled, net of credit card transaction fees. The pooled funds are distributed throughout the year in the form of compensation, including bonuses, to crewmembers fleetwide who interact directly with guests and/or behind the scenes throughout every cruise, including those in the Bar, Dining, Entertainment, Housekeeping, Guest Services, Galley and Onboard Revenue areas.

 

It was surprising to me that all the tips are pooled “across the line” and also that they are used as bonuses too.  So the money you tip does not actually go to the specific staff on my ship. 

 

[Cruise Suzy]

This increase was announced several months ago. I used the new rate in deciding whether to purchase cruises using HIA or Advantage rate.

[BobbiSox]

I was a cocktail waitress in Hollywood in the 1970's. I made big tips. Not all of the waiters and waitresses did their job as well as I did, and they didn't make good tips. No one suggested that I share my tips with them. I would never have considered doing that. 

[Banditswife]

Your quote from the announcement is interesting.  Wondering how this works for those of us giving an extra to a crew member in cash.  Do they have to pool that too?  Some bonuses may come from positive comments crew members get on surveys & the "let us know" feature of the navigator app.  This new rate may also be why they offered "included" crew appreciation on recent "deals."

[VTcruisenut]

When I first read this, I too was very disappointed, but then realized how else would they know who we had as wait staff with open seating?  Or the bar staff?

I think the tips should be distributed amongst the staff each cruise, not utilized for bonuses.  But, they don't ask us do they? Like any large corporation, they set policy and the employees must abide by their contracts and compensation.  I do leave cash for my cabins stewards as they work very hard and I know the daily gratuity just isn't enough.  To not pay the daily gratuities sends a message to Corporate headquarters yes, but what does it say to those hard working individuals that we see and interact with daily?  Not their fault by any means..............

[CruiserBruce]

6 minutes ago, Banditswife said:

Your quote from the announcement is interesting.  Wondering how this works for those of us giving an extra to a crew member in cash.  Do they have to pool that too?  Some bonuses may come from positive comments crew members get on surveys & the "let us know" feature of the navigator app.  This new rate may also be why they offered "included" crew appreciation on recent "deals."

People covered by the "Crew appreciation" don't have to pool extra tips, as long as you don't cancel your Crew Appreciation contribution. Discussed here frequently.

 

Bar waiters are on a different contract, covered by the 18% on each drink, which is pooled. Extra money given to them is not pooled.

[CruiserBruce]

13 minutes ago, BobbiSox said:

I was a cocktail waitress in Hollywood in the 1970's. I made big tips. Not all of the waiters and waitresses did their job as well as I did, and they didn't make good tips. No one suggested that I share my tips with them. I would never have considered doing that. 

Nothing has changed since 1970. 🤨

[cruisemom42]

33 minutes ago, CruiserBruce said:

Nothing has changed since 1970. 🤨

 

I know you're being facetious about things not changing, but just recently read this about tipping in Money magazine:

 

 

The standard percentage to tip waitstaff has risen over the decades. According to a PayScale study, the median tip is now 19.5%. In recent years, some waiters and restaurants have suggested that 25% or even 30% is the proper gratuity level, and that a 20% tip, once considered generous, is just average today. As recently as 2008, though, an Esquire tipping guide stated "15 percent for good service is still the norm" at American restaurants. An American Demographics study from 2001 found that three-quarters of Americans tipped an average of 17% on restaurant bills, while 22% tipped a flat amount no matter what the bill, and the gratuity left averaged $4.67. Meanwhile, in 1922, Emily Post wrote, "You will not get good service unless you tip generously," and "the rule is ten per cent."

 

At some point doesn't one need to ask the question of why the consumer is footing more and more of the wages for workers whose salaries depend on gratuities?

 

[Banditswife]

Cost for meals/drinks in bars/restaurants have gone up considerably, so 15-20% is higher today than it was in the past.

I had a real estate agent tell me they hadn't gotten a raise in 20 years,  I thought to myself that the cost of buying a home has gone up considerably in 20 yrs.  So 7% commission is quite a bit more than it was 20 yrs ago.

[Guest ldtr]

2 hours ago, Djb4CC said:

I am very surprised to not find a discussion on the newly announced crew appreciation rate effective Jan 31, 2023.

 

https://www.hollandamerica.com/en_US/crew-appreciation.html

 

While I don’t like increasing costs anymore then the next guy, I don’t have an issue with this increase - the crew does fantastic work and it is what makes my cruise enjoyable.

 

The thing I found interesting in the announcement was this quote:

All of the Crew Appreciation and Service Charge payments made by all guests on all ships in our fleet are pooled, net of credit card transaction fees. The pooled funds are distributed throughout the year in the form of compensation, including bonuses, to crewmembers fleetwide who interact directly with guests and/or behind the scenes throughout every cruise, including those in the Bar, Dining, Entertainment, Housekeeping, Guest Services, Galley and Onboard Revenue areas.

 

It was surprising to me that all the tips are pooled “across the line” and also that they are used as bonuses too.  So the money you tip does not actually go to the specific staff on my ship. 

 

They went to pooling across the line several years ago. one of the primary reasons was to prevent the crew from getting penalized when they were assigned to certain itineraries. Ships sailing in certain areas out of countries where tipping was not part of the culture would see more tips being removed and therefore reducing the money to the crew. In those days crew did not like being on contracts in those areas because of the reduction in income.  As a result it was standardized across the fleet.

 

While the cruise line companies are not US companies they are listed on US stock exchanges and as a result must follow US accounting standards.  Tips are off the books (not counted as revenue and money paid out as expense) as long as some rules are followed. 2 of the major rules are 1. tips must be optional, be able to be adjusted or removed, 2. All monies must be paid out to employees.

 

 Using some of the funds as bonuses would fit within those rules. One of the reasons why listing those that provided excellent service on the post cruise survey, since that information is used to help determine those bonuses as well as some non cash rewards such as assignments and days off.

 

There are some as advantages to the passengers, crew and corporation to using the tip approach compared to rolling the amount into base fares.

 

Note this only applies to the daily charge, and not to the amount added on to drinks and other services since they are not optional and cannot be removed.

Edited December 20, 2022 by ldtr

[Cruisin'allovertheworld]

2 hours ago, ldtr said:

"...There are some as advantages to the passengers, crew and corporation to using the tip approach compared to rolling the amount into base fares.

 

Note this only applies to the daily charge, and not to the amount added on to drinks and other services since they are not optional and cannot be removed."

I see no advantage to passengers in tipping. Or the crew, really. Only the corporation benefits when they don't have to pay people living/fair wages.

 

As someone from a non-tipping culture (Australia) I absolutely abhor tipping. It feels slimy, sleazy and dogy to me. Could someone explain the benefit of it to me?

 

Having said that when I have been to Mexico (once), Canada (once) and the US (twice) I have of course tipped. I don't want people to starve!!

[Hlitner]

4 hours ago, CruiserBruce said:

People covered by the "Crew appreciation" don't have to pool extra tips, as long as you don't cancel your Crew Appreciation contribution. Discussed here frequently.

 

Bar waiters are on a different contract, covered by the 18% on each drink, which is pooled. Extra money given to them is not pooled.

That is an absolute crock and just one more ridiculous "rumor."  The reality is that if you hand cash to a bar tender, waiter, steward, etc. they would not often have a clue whether or not you paid, cancelled, increased or decreased your tips (I refuse to accept that ridiculous crew term. That cash goes quietly in a pocket where it stays, unless that crew member makes a decision to share it with others (unlikely).   Just think about what you said.  If you go to Guest Relations and remove or reduce auto tips, do you think they put out a shipwide announcement that passenger X just removed their tips?   Do you really think on the Koningsdam, 1000 crew members get daily updates on who, out of 2500 passengers, removed or changed tips?

 

Hank

[LMaxwell]

13 minutes ago, Hlitner said:

That is an absolute crock and just one more ridiculous "rumor."  The reality is that if you hand cash to a bar tender, waiter, steward, etc. they would not often have a clue whether or not you paid, cancelled, increased or decreased your tips (I refuse to accept that ridiculous crew term. That cash goes quietly in a pocket where it stays, unless that crew member makes a decision to share it with others (unlikely).   Just think about what you said.  If you go to Guest Relations and remove or reduce auto tips, do you think they put out a shipwide announcement that passenger X just removed their tips?   Do you really think on the Koningsdam, 1000 crew members get daily updates on who, out of 2500 passengers, removed or changed tips?

 

Hank

 

Correct.

Cash in hand is anyones to keep and impossible to track when received or where. The crew is not shaken down off shift by management. And even if they were, impossible to know the provider of the money. And if you somehow did know all those things and the manager shakes you down and knows that Mr. Smith handed you $100 on day 1 (this does not happen) what happens day 10 when Mr. Smith cancels his autocharges; the shakedown comes and looks for you to "pay it back"?  

 

The mental gymnastics necessary to believe any of this is possible or occurring is surely worth Olympic Gold.  I don't know where some of these fabrications got their start, but they spread like wildfire. 

[Hlitner]

It is interesting to apply some basic math to tipping.  HAL has about 23,000 berths so let us be generous and assume that they average 20,000 filled berths per week.  Now let's assume that the average cruiser tips $15 per day which means their fund would get about $300,000 a week or more than $15 million a year!  That is real money. 

 

Has anyone here ever seen an independent audit of that money?  Do we know if it all is actually paid out to the crew and to who in the crew?  Also consider that with that system the worst crew member (and there are always some rotten apples) would get as much as the best crew member.  

 

Now if you really want to expand your mind, consider that CCL ships have about 160,000 berths.  This would likely generate over $3 million a week in tips or more than $150 million a year!  Has anyone ever seen an independent audit?  Just thinking out loud.

 

Hank

[julia]

Hank:  Aside from holiday sailings, you're assuming a nearly 87% capacity, which I think is rather high at this point.  I do agree with your thinking though, AND the "crew" rates are increasing in Feb.

[Sailnsurf]

What this policy indicates is that apart from direct tipping the best way to ensure exceptional service is rewarded is to put compliments in writing.

[Laminator]

2 hours ago, julia said:

Hank:  Aside from holiday sailings, you're assuming a nearly 87% capacity, which I think is rather high at this point.  I do agree with your thinking though, AND the "crew" rates are increasing in Feb.

Plus we need to consider the percentage of pax that remove the tips. That number is quite high for cruises that leave outside the US! where tipping is not customary!

[Guest ldtr]

4 hours ago, Cruisin'allovertheworld said:

I see no advantage to passengers in tipping. Or the crew, really. Only the corporation benefits when they don't have to pay people living/fair wages.

 

As someone from a non-tipping culture (Australia) I absolutely abhor tipping. It feels slimy, sleazy and dogy to me. Could someone explain the benefit of it to me?

 

Having said that when I have been to Mexico (once), Canada (once) and the US (twice) I have of course tipped. I don't want people to starve!!

The primary benefit to passengers is that it lowers the cruise fare. Since travel insurance is based upon cost of trip the cost of travel insurance is lower. There is also that the tip amount is due at the end of the cruise and does not have to be paid in advance giving one 90 days delay in having to pay. Those are potential benefits to passengers.

 

The benefit to the cruise line is that the money goes from the passengers to the crew without going through the company financials. Neither revenue nor expense.  That results in lower revenue, but also lower expenses. That means a higher net margin in the financials and reduces some employment related taxes.

 

For the crew member, depending upon their country of residence it can also impact their taxes (lower). It might also impact fees to recruiters since the money is not included in their salaries.

 

While you may tip there are others that choose not too. One of the reasons that fares booked in Australia have included tips in base fares and removed the ability to remove them.

[Guest ldtr]

3 hours ago, Hlitner said:

It is interesting to apply some basic math to tipping.  HAL has about 23,000 berths so let us be generous and assume that they average 20,000 filled berths per week.  Now let's assume that the average cruiser tips $15 per day which means their fund would get about $300,000 a week or more than $15 million a year!  That is real money. 

 

Has anyone here ever seen an independent audit of that money?  Do we know if it all is actually paid out to the crew and to who in the crew?  Also consider that with that system the worst crew member (and there are always some rotten apples) would get as much as the best crew member.  

 

Now if you really want to expand your mind, consider that CCL ships have about 160,000 berths.  This would likely generate over $3 million a week in tips or more than $150 million a year!  Has anyone ever seen an independent audit?  Just thinking out loud.

 

Hank

Seen an audit no, but their financials are reported with the SEC and must be signed off by both Corporate exec's and the firm that does audit their books.

 

Based upon the amount of money it would be pretty obvious in the 10k and 10q filings if they started running the money through their books, which they would have to do if they stopped distributing it all to crew. If they did that they would no longer need to keep tips optional and you would most lrely see them become a fixed fee (not removeable)

[Guest ldtr]

4 hours ago, Hlitner said:

That is an absolute crock and just one more ridiculous "rumor."  The reality is that if you hand cash to a bar tender, waiter, steward, etc. they would not often have a clue whether or not you paid, cancelled, increased or decreased your tips (I refuse to accept that ridiculous crew term. That cash goes quietly in a pocket where it stays, unless that crew member makes a decision to share it with others (unlikely).   Just think about what you said.  If you go to Guest Relations and remove or reduce auto tips, do you think they put out a shipwide announcement that passenger X just removed their tips?   Do you really think on the Koningsdam, 1000 crew members get daily updates on who, out of 2500 passengers, removed or changed tips?

 

Hank

they may have changed the policy of requiring crew (mainly stewards) to turn in tips received from passengers that removed tips. But they can easily track Stewards whose passengers removed tips, as well as the data for the amount of tips removed by ship. And include that info is bonus calculations.

 

The biggest driver for crew turning in tips was not being searched,  but  to show that the removal of tips was not due to their work, since they were tipped directly.

 

Or to put it another way positive mention is survey a plus to crew,  removal of tips a potential negative even if money is handed to them directly.

 

Edited December 21, 2022 by ldtr

[Hlitner]

12 minutes ago, ldtr said:

Seen an audit no, but their financials are reported with the SEC and must be signed off by both Corporate exec's and the firm that does audit their books.

 

Based upon the amount of money it would be pretty obvious in the 10k and 10q filings if they started running the money through their books, which they would have to do if they stopped distributing it all to crew. If they did that they would no longer need to keep tips optional and you would most lrely see them become a fixed fee (not removeable)

Perhaps a legacy of the FTX mess is what can happen without the benefit of outside audits.  The cruise lines are very secretive about their "tip" funds.  Can anyone here tell us what formula is used to distribute the funds?  Is there an "administrative fee" skimmed off the top?  We could easily come up with lots of questions about all that money, and how it is distributed.   Traditionally, tips were a private matter between a customer and the employee with folks choosing to reward good service.  When a HAL cruiser has a great cruise on the Rotterdam and wants to reward that crew, are they OK with the fact that their tips will be going to folks on other ships?  I suspect that most cruisers just assume their auto tips are distributed to their waiters and stewards.  Most cruisers probably have no idea it is going to folks they never see on ships they have never cruised.  

 

I am all for rewarding excellence.  But this system apparently does not differentiate between those who deliver excellent service and the slakers.  A hard-working waiter gets the same distribution as the lazy waiter who does the minimum.  Just work their time until the end of the contract and they will likely get another contract since the cruise lines are now desperate to find crew.   Sounds like a recipe for the gradual decline of quality.

 

Hank  

 

 

[kazu]

15 minutes ago, Hlitner said:

I am all for rewarding excellence.  But this system apparently does not differentiate between those who deliver excellent service and the slakers.  A hard-working waiter gets the same distribution as the lazy waiter who does the minimum.  Just work their time until the end of the contract and they will likely get another contract since the cruise lines are now desperate to find crew.   Sounds like a recipe for the gradual decline of quality.

 

Hank  

 

 

 

I think you are wrong in this Hank.  I have the definite feeling that those that are excellent get rewarded more.

The feed back on the Navigator (LUK) counts a lot - more than money to some.  I do use it and KNOW what it means to many.

 

Don’t assume what no one knows for sure but I know that comments on excellence counts a lot.

I am currently on the Koningsdam and I have a wonderful steward.  I have service twice a day (without asking)

 

When I arrived I saw suitcases waiting outside of rooms.  Mine wasn’t there.  It was on the bed.  And. Yes, I will tip him extra but it was made clear through a subtle hint by his assistant that the feed back mean a whole lot - I just smiled and said no worries - I know how to do that and do - he beamed.

 

[Guest ldtr]

13 minutes ago, Hlitner said:

Perhaps a legacy of the FTX mess is what can happen without the benefit of outside audits.  The cruise lines are very secretive about their "tip" funds.  Can anyone here tell us what formula is used to distribute the funds?  Is there an "administrative fee" skimmed off the top?  We could easily come up with lots of questions about all that money, and how it is distributed.   Traditionally, tips were a private matter between a customer and the employee with folks choosing to reward good service.  When a HAL cruiser has a great cruise on the Rotterdam and wants to reward that crew, are they OK with the fact that their tips will be going to folks on other ships?  I suspect that most cruisers just assume their auto tips are distributed to their waiters and stewards.  Most cruisers probably have no idea it is going to folks they never see on ships they have never cruised.  

 

I am all for rewarding excellence.  But this system apparently does not differentiate between those who deliver excellent service and the slakers.  A hard-working waiter gets the same distribution as the lazy waiter who does the minimum.  Just work their time until the end of the contract and they will likely get another contract since the cruise lines are now desperate to find crew.   Sounds like a recipe for the gradual decline of quality.

 

Hank  

 

 

Again they must meet US accounting standards. Unlike FTX which was an unregulated Bahamian company, the cruise companies must meet US accounting standards. Which does include audits to those standards. They do not have to disclose their tip pool distribution, but they cannot take an administration fee cut ad you put it. They can apply some direct charges such as credit card processing fees, but those are very limited and tied to actual costs.

 

Unlikely a lazy waiter would get the same as a good waiter since bonuses are determined by reviews and surveys.   Let's see  this system went into effect atleast 10 years ago,  so if it hasn't happened by now, unlikely to do so in the future. It's been quite a while since you used to get envelops from customer service for handing out tips. Usually service in the MDR was quite fast on that last day since quite a few would skip it to avoid tipping the waiters.

[Guest ldtr]

2 minutes ago, kazu said:

 

I think you are wrong in this Hank.  I have the definite feeling that those that are excellent get rewarded more.

The feed back on the Navigator (LUK) counts a lot - more than money to some.  I do use it and KNOW what it means to many.

 

Don’t assume what no one knows for sure but I know that comments on excellence counts a lot.

I am currently on the Koningsdam and I have a wonderful steward.  I have service twice a day (without asking)

 

When I arrived I saw suitcases waiting outside of rooms.  Mine wasn’t there.  It was on the bed.  And. Yes, I will tip him extra but it was made clear through a subtle hint by his assistant that the feed back mean a whole lot - I just smiled and said no worries - I know how to do that and do - he beamed.

 

exactly. Comments impact promotions, bonuses, contract assignments, days off, etc.

[Hlitner]

5 minutes ago, kazu said:

 

I think you are wrong in this Hank.  I have the definite feeling that those that are excellent get rewarded more.

The feed back on the Navigator (LUK) counts a lot - more than money to some.  I do use it and KNOW what it means to many.

 

Don’t assume what no one knows for sure but I know that comments on excellence counts a lot.

I am currently on the Koningsdam and I have a wonderful steward.  I have service twice a day (without asking)

 

When I arrived I saw suitcases waiting outside of rooms.  Mine wasn’t there.  It was on the bed.  And. Yes, I will tip him extra but it was made clear through a subtle hint by his assistant that the feed back mean a whole lot - I just smiled and said no worries - I know how to do that and do - he beamed.

 

Have to smile at your post when you say you get twice a day service "without asking."  I have been on far more than 100 cruises and until the COVID shutdown never had to "ask" for twice a day service...it was expected!   Come to think of it, I also never expected to see add-on prices in the MDR and Pinnacle.

 

Hank