Tipping....yes, again

[aborgman]

32 minutes ago, Elaine5715 said:

Where then do companies get revenue from, if not from customers?  Cost cutting doesn't produce revenue.  

 

Companies just get less revenue, and they pass some of the cost on to consumers.

 

 

"We find the incidence on consumers, workers and shareholders is 52%, 28% and 20%, respectively"

 

So for a $1 unit cost increase -

 

Consumers will see an increase $0.52 in unit price.

Workers will see a reduction of $0.28 in pay per unit

Shareholders will see a reduction of $0.20 in dividends per unit.

 

Scott R. Baker & Stephen Teng Sun & Constantine Yannelis, 2020. "Corporate Taxes and Retail Prices," NBER Working Papers 27058, National Bureau of Economic Research, Inc.

 

 

 

 

[JHU]

2 hours ago, Elaine5715 said:

Percentage of hotels with resort fees 97%

Now this is a topic which shoots my blood pressure up.  

[DallasGuy75219]

15 hours ago, peoriaguy1958 said:

Also as a FYI, the dining room staff only income is from gratitudes, Carnival doesn’t pay them any type of base pay, also on Venezia now a was told by a head server that prior cruise just under 50% of passengers removed their gratitudes and their pay was way less. If you figure the hours they work per day if that many passengers are not tipping they making like $3-5 dollars a hour. Never knew only pay they get is from tips.

You got told a sob story to guilt you into tipping (more).

[Colorado Beach Bum]

22 minutes ago, aborgman said:

 

Companies just get less revenue, and they pass some of the cost on to consumers.

 

 

"We find the incidence on consumers, workers and shareholders is 52%, 28% and 20%, respectively"

 

So for a $1 unit cost increase -

 

Consumers will see an increase $0.52 in unit price.

Workers will see a reduction of $0.28 in pay per unit

Shareholders will see a reduction of $0.20 in dividends per unit.

 

Scott R. Baker & Stephen Teng Sun & Constantine Yannelis, 2020. "Corporate Taxes and Retail Prices," NBER Working Papers 27058, National Bureau of Economic Research, Inc.

 

 

 

 

There is no way this true.  If so every company would eventually go out of business with this formula.  Businesses have a duty to increase share holder value, not decrease it. 

[sanger727]

15 hours ago, peoriaguy1958 said:

Also as a FYI, the dining room staff only income is from gratitudes, Carnival doesn’t pay them any type of base pay, also on Venezia now a was told by a head server that prior cruise just under 50% of passengers removed their gratitudes and their pay was way less. If you figure the hours they work per day if that many passengers are not tipping they making like $3-5 dollars a hour. Never knew only pay they get is from tips.

 

This is an incorrect statement. Their pay is contractually guaranteed. Some of that contractually guaranteed pay is made up of tips.

 

This is the same situation in the US with tipped workers. Tipped minimum wage is like $2. Actually minimum way is like $10. Wait staff are guaranteed by law to make at least $10 an hour. They have to declare their tips and if somehow they average less than $10 an hour, the restaurant has to pay the difference. Cruises operate the same way. Workers will not have zero income if everyone pulls their tips. However, they make more than the contractual minimum if everyone leaves their tips on.

[carohs]

Of course companies pass on increased costs to the consumers, otherwise they'd eventually go bankrupt. Can you imagine still paying $0.35 for a burger? 

Compare the price of McDonald's in California to Wisconsin and tell me minimum wage has nothing to do with it.

[DukeASUGirl]

18 hours ago, lazydayz said:

I don’t want to tip back of the house workers I never see.  When I dine at a land restaurant, I am not expected to tip the host, the cook and the dishwasher.  

 

But your server in a land restaurant is expected to tip out the bus staff, dishwashers, hostess, etc. You may think they keep all of their tips, but they can't.

[aborgman]

"There is no way this true."

 

You're disagreeing with actual, measured, data.

 

"Businesses have a duty to increase share holder value, not decrease it."

 

Businesses have a fiduciary duty to maximize shareholder value - not increase or decrease it.

 

If your options are going out of business, or cutting dividends by 20% - cutting dividends by 20% IS maximizing shareholder value.

 

In most businesses - if you pass all costs on to the customer, one of two things happen:

 

1) One of your competitors decides to only pass on 90% of the costs to consumers, and steals all your customers (and makes up the difference in volume).

 

2) Demand is elastic - and people either stop buying your good altogether, or purchase a replacement good.

 

The only place you can really pass on 100% of costs are in situation with extremely low price elasticity of demand - basically only essential goods with no replacement goods.

 

[aborgman]

19 minutes ago, DukeASUGirl said:

 

But your server in a land restaurant is expected to tip out the bus staff, dishwashers, hostess, etc. You may think they keep all of their tips, but they can't.

 

Maybe.

 

As a teenager - I worked back of house in several different restaurants.

 

1 - Tips not shared at all. Busboys tipped directly by patrons. Dishwashers/cooks/etc. received no tips.

2 - Tips not shared at all. No one other than wait staff received any tips.

3 - Tips pooled. Wait staff, bartenders, and busboys split. No kitchen staff received anything.

4 - Tips pooled. All front and back of house split.

[aborgman]

31 minutes ago, carohs said:

Of course companies pass on increased costs to the consumers, otherwise they'd eventually go bankrupt. Can you imagine still paying $0.35 for a burger? 

Compare the price of McDonald's in California to Wisconsin and tell me minimum wage has nothing to do with it.

 

No one said companies don't pass on increased costs. Companies don't pass on 100% of increased cost.

 

McDonalds in California is about 20% more expensive than Wisconsin - and that is largely due to other costs than labor.

 

200+% higher minimum wage, 100% higher property leasing costs, 20% higher food input costs

20% higher price

 

[BlerkOne]

1 hour ago, aborgman said:

 

 

Scott R. Baker & Stephen Teng Sun & Constantine Yannelis, 2020. "Corporate Taxes and Retail Prices," NBER Working Papers 27058, National Bureau of Economic Research, Inc.

 

 

 

 

What else was happening then? Oh yeah, COVID.

[BlerkOne]

13 minutes ago, aborgman said:

 

No one said companies don't pass on increased costs. Companies don't pass on 100% of increased cost.

 

McDonalds in California is about 20% more expensive than Wisconsin - and that is largely due to other costs than labor.

 

200+% higher minimum wage, 100% higher property leasing costs, 20% higher food input costs

20% higher price

 

150% of statistics are made up.

 

[BlerkOne]

26 minutes ago, aborgman said:

The only place you can really pass on 100% of costs are in situation with extremely low price elasticity of demand - basically only essential goods with no replacement goods.

 

There is no competition at sea.

[aborgman]

39 minutes ago, BlerkOne said:

There is no competition at sea.

 

Of course there is... MSC, RCL, Viking, etc., etc.

 

...and there are replacement goods (non-cruise vacations).

 

 

[BlerkOne]

15 minutes ago, aborgman said:

 

Of course there is... MSC, RCL, Viking, etc., etc.

 

...and there are replacement goods (non-cruise vacations).

 

 

Not once the lines are released.

 

The cruise contract is clear that some costs can be 100% passed along.

[BlerkOne]

On 12/2/2023 at 8:56 PM, Host Carolyn said:

There have been numerous discussions re tips here on Carnival this year. A quick search brought up these two rather lengthy ones that illustrate the many opinions on this rather hot topic. 

 

at the end of the day it always comes down to some people just don't want to tip the amounts and in the fashion recommended by the cruise lines. Only the excuses vary.

[aborgman]

1 hour ago, BlerkOne said:

What else was happening then? Oh yeah, COVID.

 

COVID was happening 2005-2017?

 

🙄

[BlerkOne]

2 hours ago, aborgman said:

 

Companies just get less revenue, and they pass some of the cost on to consumers.

 

 

 

Companies Push Prices Higher, Protecting Profits but Adding to Inflation

 

https://www.nytimes.com/2023/05/30/business/economy/inflation-companies-profits-higher-prices.html

 

“Companies are not just maintaining margins, not just passing on cost increases, they have used it as a cover to expand margins,” said Albert Edwards, a global strategist at Société Générale, referring to profit margins, a measure of how much businesses earn from every dollar of sales.

[RD64]

4 hours ago, Elaine5715 said:

Where then do companies get revenue from, if not from customers?  Cost cutting doesn't produce revenue.  

It is not just about revenue. For profit maximization to occur, a firm must maximize revenue and minimize costs.

[Elaine5715]

3 hours ago, aborgman said:

 

No one said companies don't pass on increased costs. Companies don't pass on 100% of increased cost.

 

McDonalds in California is about 20% more expensive than Wisconsin - and that is largely due to other costs than labor.

 

200+% higher minimum wage, 100% higher property leasing costs, 20% higher food input costs

20% higher price

 

Then where do they get the difference?  Money tree?  I have ran operating budgets for years...income must exceed expenses.  

[mz-s]

Just now, Elaine5715 said:

Then where do they get the difference?  Money tree?  I have ran operating budgets for years...income must exceed expenses.  

 

They can only raise prices if the consumer will bear the extra expense.

[Elaine5715]

1 minute ago, mz-s said:

 

They can only raise prices if the consumer will bear the extra expense.

Raising prices increases revenue, reducing costs by decreasing service/sizes/quality may increase profit but it doesn't increase revenue.  

[mz-s]

6 minutes ago, Elaine5715 said:

Raising prices increases revenue, reducing costs by decreasing service/sizes/quality may increase profit but it doesn't increase revenue.  

 

I don't see how revenue is relevant here.

[BlerkOne]

30 minutes ago, mz-s said:

 

They can only raise prices if the consumer will bear the extra expense.

Cruise prices and bookings continue to increase.

[aborgman]

11 hours ago, BlerkOne said:

Cruise prices and bookings continue to increase.

 

Cruise prices are down 35% relative to inflation since 1997.

 

In real dollars  - cruise prices have largely been on a downward trend.

 

Even with the increase post 2020 - cruise fares on average are 0.3% CHEAPER than 2019 in real dollars.