Is this a new Gratuities policy?

[TRLD]

14 minutes ago, rideev said:

We don't know that our cabin Steward gets any part of it or not. 

 

Great thing is though, we can all do whatever we like.  If one wants to remove CA at Guest Services they can (unless on Plus or Premier.). If one wants to increase them they can.

 

What difference does it make to you what your fellow passengers do in this case?

 

 

Actually we do. If they are in the pool by contract they get a portion of the pool. If not Princess would be in violation of the employment contract.

[Retired-N-Happy]

14 hours ago, whitecap said:

I believe that most cruisers believe that by paying the gratuities, they are tipping those crew members on their cruise who provided good or exceptional services.  They very well may not be.  The gratuities paid, as stated in the Princess paperwork, go into a pool, controlled by Princess and distributed by Princess throughout the fleet!  Your room steward may never see a dime of the gratuities you paid and the same for those in the dining room who served you so well.  

If I go to a restaurant and the wait staff does an excellent job, I don't hand the owner extra money to be put in his or her pocket, to be distributed, throughout the year to all those who work at the restaurant.  Why should it be any different when cruising.  With the exception of our very first cruise (we are now over 50), we have always removed the gratuities, obtained small envelopes from Customer Service desk, and given tips directly to the persons who went above and beyond to see to it that we enjoyed our cruise.  

And the problem with doing it your way is what happens if you have your time dining and you have many different waiters serve you over the course of your cruise. Do you tip them all? And what happens to the small percentage of your 16.00 per day that goes to the crew cleaning up the tables in the buffet on a daily basis.  Or the small percentage that goes to people behind the scenes that you never directly deal with. Your monies that would go to these two groups of deserving people are shut out now since you took your percentage away and couldn't give them an envelope to make up for it.

[ldubs]

In a private sector business it is not uncommon for salary bumps, promotions, and/or bonuses to be based on measurable performance factors.  Hopefully Princess has a good system in place to determine merit.  I can't imagine that customer satisfaction is not among the factors considered.   

[2 cruises a year]

I haven't read through this whole thread AGAIN.  This has been discussed ad infinitum.

First of all, in life tips don't go directly to who ever you are tipping.  This includes restaurants, bars coffee shops, what ever.  It always goes into a pool that includes who served you, the dishwasher, the buss boy, bar-back, the salad maker, who ever.  Princess is no different. They pool the Gratuities, and divy them out.  They tell you this, it isn't a secret.

But withholding Gratuities cheats everyone.  Divying them out as you see fit is bucking the system and doesn't accomplish anything.  They have to turn your tip in to the pool if you don't contribute to the pool with the daily Gratuities.  Don't try to tempt them to keep it for themselves, they will only get into trouble.  It is not worth it to them.  If you do pay the daily Gratuities and tip them, they can keep the extra above the daily Gratuity.

Maybe it is a shell game, but so what, the crew has to be paid, and you are going to pay them, one way or another.

AND LASTLY, the crew knows better than we do, what they signed up for.  It is none of our business how, or how much they get paid.  Do you sit down at the bar and ask the person next to you how much money they make?

[TRLD]

7 hours ago, SCX22 said:

 

Not privy to what or how P&O compensate their crew.  As a US Citizen without a British or Australian post address, I can't book their cruises.  From what I have gathered from my friends across the pond who will NEVER cruise with P&O again, there are cuts made elsewhere.

Actually you can.  You book through their US authorized agent. Vacations to go.  We have taken several cruises with them though you can probably count the number of Americans on board on any given cruise on 1 hand.

[TRLD]

7 hours ago, Interestedcruisefan said:

I've cruised RCL, Carnival, P and O, Azamara and Princess

 

Princess the least impressive but I'm willing to give them another try

 

My parents have always cruised Princess and are highest tier. I will be warning them about the tips for next time

 

Quality of cruise is a whole different debate and nothing to do with this thread

 

With P and O the price you pay for the cruise is transparent. There's no tips/gratuities/crew appreciation expected nor added to your costs or taken from your card on top of your payment. 

 

So there's no possibility of misleading customers about what any extra payments they take from you are being used for

 

Because they don't take any. 

 

If you want to give any staff a tip you can choose to do so direct and it's theirs to keep

 

Very straightforward and simple and no flowery words or dark arts needed from anybody in the cruiseline to get you to give them more money before you leave the ship

 

Princess operating in the dark ages still compared to P and O

 

 

If they are highest tier then one would expect they know. After all nothing new about tipping on Princess, has been in place for the last 10.years and more.

 

Very much the same approach as Celebrity, Royal, NCL, HAL, Carnival. All of the north America focused mass market lines.

 

 

[Bgwest]

13 hours ago, ldubs said:

Would you be willing to replace the current system with an increase in cruise fares that will likely be more than the current fare + gratuity?  

Yes. Absolutely.

 

More than “current fare + gratuity”. Why would that be? Please elaborate. 

[TRLD]

27 minutes ago, Bgwest said:

Yes. Absolutely.

 

More than “current fare + gratuity”. Why would that be? Please elaborate. 

The current system generates some benefits that reduces cost for passengers, cruise line and crew.

 

For example with passengers if the gratuity is rolled into fares they would need to be paid in advance of the cruise and they would be included in the calculation for travel insurance. With travel insurance usually costing around 5% or more a a $16 dollar per day addition would increase the cost of travel insurance around 80 cents per day.

 

For crew the current system of salary  and gratuity has advantages depending upon country of residence. Gratuities are treated differently and get better tax treatment in some countries. For crew going through recruiters the fee is usually based upon salary, not gratuities so going to a salary only system may result in the crew keeping less money in their pocket requiring some adjustment (increase in compensation) to remain at current levels. Costs the cruise line might pass on if they have pricing power.

 

The current system provides the cruise line with risk management benefits. The gratuity pool and payouts adjust automatically to major drops in business, where as salaries remain fixed. This reduces cruise line risk in case of major, unexpected changes. Of it was all fixed as salary they would have to increase reserves in case of unexpected drops in business. Another factor that could get passed on.

 

The current system also gives the cruise line a better net margin, than it would have under a fully salaried system. 

Edited May 30 by TRLD

[ldubs]

35 minutes ago, Bgwest said:

Yes. Absolutely.

 

More than “current fare + gratuity”. Why would that be? Please elaborate. 

 

I think I would too, if it included no further expectation of tipping. 

 

One reason it might is because a significant increase to the corporation's employee salary expense item would have a negative impact to financial results.  Prices would likely be increased to maintain margins and keep shareholders happy.  Of course this assumes the current voluntary gratuities are not counted on the books as an expense item.    

 

Edit: I think I hit send about the same time as TRLD.  TRLD covers even more potential reasons.  

 

Edited May 30 by ldubs

[JimmyVWine]

6 hours ago, TRLD said:

The current system provides the cruise line with risk management benefits.

There are also some hidden, perhaps unexpected ramifications from increasing payroll.  Often, insurance premiums for liability and workers comp insurance take payroll into account, (along with things like square footage of facilities.)  An insurance underwriter is almost always going to want to see payroll statements.  Higher payroll can mean higher insurance premiums.  And higher insurance premiums are going to be passed along to the consumer.  So the new fare with gratuities baked in is going to be greater than current fare + gratuities.  

[JimmyVWine]

7 hours ago, 2 cruises a year said:

AND LASTLY, the crew knows better than we do, what they signed up for.

Barely mentioned in this discussion is the obvious inequity that would result if tips were doled out individually and crew members got to keep what they were handed, receiving nothing else.  Does anyone think that the bartenders working the Princess Live Bar do nearly as much business as the ones who staff Good Spirits At Sea?  The latter would probably earn 10 times as much in tips.  Does that mean that they are better employees, or did they just have the opportunity to interact with more guests?  When the location of the crew members' posting dictates income, and the decision as to where to post the crew members is somewhat arbitrary, crew morale would decrease and crew friction would increase.  The crew members would rather live without this stress and when a server is sent off to cruise ship Siberia instead of being posted in the highest trafficked area, they can go about their business secure in the knowledge that they will not suffer financially because of it.  I know this firsthand from working as an usher in a sporting venue.  One day I would be assigned to the lower box seats and showing people to their seats and wiping them down would earn me a fortune.  The next day I would be assigned to the upper deck and perform the same service and get tipped barely enough for a bus ride home.  Fortunately, the ushers agreed to pool and split tips, so everyone did well and no one had to grumble about being sent to the cheap seats.   

[FLAlaska]

11 hours ago, ldubs said:

In a private sector business it is not uncommon for salary bumps, promotions, and/or bonuses to be based on measurable performance factors.  Hopefully Princess has a good system in place to determine merit.  I can't imagine that customer satisfaction is not among the factors considered.   

Ive been told by various staff that the reviews Princess sends out at end of cruise are vital to their positions. They get read and acted on. Those reviews move them, to better ships, etc... Those reviews are VERY important to them

[memoak]

12 hours ago, Retired-N-Happy said:

And the problem with doing it your way is what happens if you have your time dining and you have many different waiters serve you over the course of your cruise. Do you tip them all? And what happens to the small percentage of your 16.00 per day that goes to the crew cleaning up the tables in the buffet on a daily basis.  Or the small percentage that goes to people behind the scenes that you never directly deal with. Your monies that would go to these two groups of deserving people are shut out now since you took your percentage away and couldn't give them an envelope to make up for it.

Since you will probably take all your meals in 1 MDR I would give the tip envelope to the MDR manager to distribute. That is what we do to tip out the servers in Sabatini’s for suite breakfast

[Oceansaway17]

19 hours ago, TRLD said:

Let me put this a different way.

 

Would you penalize a member of the staff because they happened to be assigned to a less utilized area of the ship?  Doing so would impact moral because then someone's compensation could be negatively impacted just by assignment. Kind of like the pre fleet pool days when one could be impacted just by getting assigned to a ship sailing from one port vs another.

 

From what I have been told the majority is allocated by position fleet wide, with a percentage being allocated by performance bonuses.

never said to penalize any crew member but was wondering if the cruise lines do in the MDR when folks stop going.  Why do the need us to check in with room key?  

I know some waiters become hurt and or annoyed when folks stop going to MDR.  So how does that affect their tips?  that is all.

[PescadoAmarillo]

4 hours ago, JimmyVWine said:

There are also some hidden, perhaps unexpected ramifications from increasing payroll.  Often, insurance premiums for liability and workers comp insurance take payroll into account, (along with things like square footage of facilities.)  An insurance underwriter is almost always going to want to see payroll statements.  Higher payroll can mean higher insurance premiums.  And higher insurance premiums are going to be passed along to the consumer.  So the new fare with gratuities baked in is going to be greater than current fare + gratuities.  

I have zero interest in chatting, discreetly or otherwise, with a crew member about how and how much they are paid. I assume they are there because they are satisfied with how things are done, or else they wouldn’t return. However, I would love to know the accounting for crew appreciation.  I mean, the actual entries showing where it appears (if it does) on the P&L and Balance Sheet. Because certainly the cruise lines are garnering some advantage in handling CA the way they do. And I do wonder which currency the crew is paid in. Because every change in the value of the USD means either the crew is making or losing money in their home currency or the cruise line is (which I doubt). 

[LACruiser88]

12 minutes ago, PescadoAmarillo said:

And I do wonder which currency the crew is paid in

Crews are paid in USD.

[TRLD]

2 hours ago, Oceansaway17 said:

never said to penalize any crew member but was wondering if the cruise lines do in the MDR when folks stop going.  Why do the need us to check in with room key?  

I know some waiters become hurt and or annoyed when folks stop going to MDR.  So how does that affect their tips?  that is all.

It does not impact their payout. 

 

Was this for a reservation or walk in?

 

We only do reservations for the mdr and have not been asked other thsn at check in.

 

I can think of a number of ways the information could be used, including confirming table assignments. A few months ago we checked in and was escorted to our table, only to find another couple there. Turns out they were assigned to a different table, but liked ours which was empty at the time so they just decided to move and take it.

 

They would also ask for it if any drinks or charged options are ordered.

 

A number of possible reasons, but do know not impacting payout. Have had chats about if different position assignments impact payouts and was told during a discussion at one of the most traveled luncheons how the system works.  Your comments and other metrics might impact future bonuses, promotions, contract offers, but not base payout.

[TRLD]

26 minutes ago, PescadoAmarillo said:

I have zero interest in chatting, discreetly or otherwise, with a crew member about how and how much they are paid. I assume they are there because they are satisfied with how things are done, or else they wouldn’t return. However, I would love to know the accounting for crew appreciation.  I mean, the actual entries showing where it appears (if it does) on the P&L and Balance Sheet. Because certainly the cruise lines are garnering some advantage in handling CA the way they do. And I do wonder which currency the crew is paid in. Because every change in the value of the USD means either the crew is making or losing money in their home currency or the cruise line is (which I doubt). 

It does not show on the P&L or balance sheets. Under US accounting rules, as long as certain criteria in met, the most important being that all monies received, except for actual credit card processing fees incurred in processing any paid by credit card, must be paid to employees that are part of the pool. Another is that they must be optional, can be adjusted or removed.

 

In those cases the money is not reflected in the companies books as either revenue when received or expense when paid. 

Edited May 30 by TRLD

[PescadoAmarillo]

27 minutes ago, TRLD said:

It does not show on the P&L or balance sheets. Under US accounting rules, as long as certain criteria in met, the most important being that all monies received, except for actual credit card processing fees incurred in processing any paid by credit card, must be paid to employees that are part of the pool. Another is that they must be optional, can be adjusted or removed.

 

In those cases the money is not reflected in the companies books as either revenue when received or expense when paid. 

I’m not convinced. It is (very roughly speaking) $1M per day, some of which is NOT optional (Premium and Plus), and which most likely is handled on an accrual basis, not a cash basis. I am skeptical that it is handled off the financial statements. And the reason I am curious about this is that every time tipping gets discussed on this board, there are comments about how if everyone cancelled their discretionary tips, the fund would run out of money. There is no way they are accounted for on a cash basis, and a payable and receivable has to exist somewhere, not to mention the fact that a portion of the Premium and Plus revenue actually isn’t revenue at all, but CA. 

[Interestedcruisefan]

16 hours ago, Retired-N-Happy said:

And the problem with doing it your way is what happens if you have your time dining and you have many different waiters serve you over the course of your cruise. Do you tip them all? And what happens to the small percentage of your 16.00 per day that goes to the crew cleaning up the tables in the buffet on a daily basis.  Or the small percentage that goes to people behind the scenes that you never directly deal with. Your monies that would go to these two groups of deserving people are shut out now since you took your percentage away and couldn't give them an envelope to make up for it.

I think we are giving far too much credit for how pooling and allocation of the money we give as "staff appreciation" is being used 

 

What's happening is Princess are quite simply bringing in a HUGE amount of extra  income without any costs at the end of each cruise which they use to pay wages and incentive staff

 

It's just the ultimate way of taking more money from passengers on a cruise

 

And they will keep taking it until the are no longer able to

 

Let's not overcomplicate what's happening here

 

They make more money here than they do charging the exorbitant fees for internet that cruise ships continue to charge that no longer happens on land

 

They take their opportunities to max out our spend with them

 

And this particular method is just the least transparent and at the same time the most profitable

 

Huge money involved every cruise

 

Fair play to them for getting away with it and taking advantage of the goodwill of so many passengers for so many years

 

Edited May 30 by Interestedcruisefan

[voljeep]

34 minutes ago, PescadoAmarillo said:

not to mention the fact that a portion of the Premium and Plus revenue actually isn’t revenue at all, but CA. 

Solid Point

 

Now the question is, how much of the $60 and $80 per day per person collected is allocated to payment of the crew appreciation?

[TRLD]

47 minutes ago, PescadoAmarillo said:

I’m not convinced. It is (very roughly speaking) $1M per day, some of which is NOT optional (Premium and Plus), and which most likely is handled on an accrual basis, not a cash basis. I am skeptical that it is handled off the financial statements. And the reason I am curious about this is that every time tipping gets discussed on this board, there are comments about how if everyone cancelled their discretionary tips, the fund would run out of money. There is no way they are accounted for on a cash basis, and a payable and receivable has to exist somewhere, not to mention the fact that a portion of the Premium and Plus revenue actually isn’t revenue at all, but CA. 

I think you miss the point. The fund can be managed using accural methods and other techniques necessary to manage the fund and smooth flows, but the funds are not on the companies books. You will not see it in the SEC filings. The funds are managed outside of the companies statements. They are part of the companies cash flow, assets or liabilities. They are not owned by the company, they are handled independently.

 

The rate of funds coming in will impact the rate at which it goes out. The goal of the company and the employees would be to manage it to keep the payouts pretty stable. I expect that fluctuations would mostly likely impact the money available for bonus payouts more so than base payouts.

 

As far as the money from packages just as the money from those fares where CA was included, the CA amounts would be subtracted prior to going into revenue. In the case of the packages, the money received minus the CA contribution would be reflected in onboard sales. But the CA contribution would not be in the onboard sales revenue in the 10k or 10q filings. It is the way the accounting rules are set up.

Edited May 30 by TRLD

[startedwithamouse]

22 minutes ago, Interestedcruisefan said:

I think we are giving far too much credit for how pooling and allocation of the money we give as "staff appreciation" is being used 

 

What's happening is Princess are quite simply bringing in a HUGE amount of extra  income without any costs at the end of each cruise which they use to pay wages and incentive staff

 

It's just the ultimate way of taking more money from passengers on a cruise

 

And they will keep taking it until the are no longer able to

 

Let's not overcomplicate what's happening here

 

They make more money here than they do charging the exorbitant fees for internet that cruise ships continue to charge that no longer happens on land

 

They take their opportunities to max out our spend with them

 

And this particular method is just the least transparent and at the same time the most profitable

 

Huge money involved every cruise

 

Fair play to them for getting away with it and taking advantage of the goodwill of so many passengers for so many years

 

You do realize Princess is in the business of making money?

[voljeep]

5 minutes ago, TRLD said:

I think you miss the point. The fund can be managed using accural methods and other techniques necessary to manage the fund and smooth flows, but the funds are not on the companies books. You will not see it in the SEC filings. The funds are managed outside of the companies statements. They are part of the companies cash flow, assets or liabilities. They are not owned by the company, they are handled independently.

 

The rate of funds coming in will impact the rate at which it goes out. The goal of the company and the employees would be to manage it to keep the payouts pretty stable. I expect that fluctuations would mostly likely impact the money available for bonus payouts more so than base payouts.

 

As far as the money from packages just as the money from those fares where CA was included, the CA amounts would be subtracted prior to going into revenue. In the case of the packages, the money received minus the CA contribution would be reflected in onboard sales. But the CA contribution would not be in the onboard sales revenue in the 10k or 10q filings. It is the way the accounting rules are set up.

how much of my $80 per person per day for Premier package is 'off the books' then?

[Interestedcruisefan]

1 minute ago, startedwithamouse said:

You do realize Princess is in the business of making money?

Correct. 

 

I'm happy with about 80 per cent of the ways they do it. And the rest I believe they significantly take advantage of us passengers. 

 

Internet charges - I don't like the way they exploit the fact that so many passengers need internet daily (my wife and I do to keep in touch with our businesses in the UK daily) and charge fees that just dont exist exorbitant fees anywhere other than on cruise lines

 

These crew appreciation fees - total con trick. Simple as that. 

 

I won't mention a couple of other things as I don't want to divert the debate