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Norwegian Cruise Lines Hikes Gratuities 25% Starting Jan 1st


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Norwegian just announced they are raising gratuities by 25% for most cabins.

For passengers staying in non-suite cabins the new rate on January 1st will be $20 dollars per day per person a $4 dollar per day per person increase.

For passengers staying in the Haven suites their new rate will be $25 dollars per day per person that represents a $5 dollar per day per person increase.  For a family of four traveling together this translates into $700 dollars in gratuities if they are staying in the Haven on a typical 7 night cruise.  

Granted if you are staying in the Haven you probably can afford $700 dollars in gratuities but according to The Points Guy the high price or gratuities is a level not seen in this segment of the cruise industry.

Also this will be the second time in just 9 months that NCL has increased their gratuities prior to this announcement NCL had only increased their gratuities by $.50 to $1.50 per person per day depending on cabin.  According to the article NCL will allow guest who hare unhappy with their service to adjust their gratuities but they can only do so onboard, in person after speaking to someone at guest services.  

NCL also announced they are increasing the price of several onboard items like their Unlimited Open Bar package will increase to $138 dollars per day. And customers who get the free drink package as part of their promotion when they book an NCL cruise will have to pay a 20% bar gratuity on "free" drink package.  NCL is also raising the price "free" drink package so the 20% gratuity that customers have to pay (which is separate from the cabin gratuities) is also going up.  Also I don't know if this is a new change or not but the free onboard wifi which passengers can select as part of their booking promotion will be limited to a total of 150 minutes.  That is about 2 hours 30 minutes worth of free internet on a 7 night cruise.  Norwegian and other cruise lines have said the high cost of food, liquor, fuel, and other supply chain/inflation issues are behind the latest increases in fees.

Even though Royal just hiked their gratuities will we see Royal and other cruise lines follow NCL's lead and hike their gratuities by $4 dollars and $5 dollars per day/person depending on cabin? 

 

https://thepointsguy.com/news/norwegian-cruise-ship-gratuity-fee-hike-2023/

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I believe NCL is making a mistake.  I read somewhere, perhaps here, that they don't lower cruise prices to increase capacity as other carriers do.  They believe revenues are enhanced by having a "mostly full ship" of passengers at higher prices rather than a "completely full ship" at discounted prices.  I guess they believe their market segment can afford higher gratuities (so they don't need to raise staff wages) and will be willing to pay them.  I don't intend to try NCL although we will sail Oceania simply for its unique in itinerary (South Pacific).

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7 hours ago, JasonOasis said:

Even though Royal just hiked their gratuities will we see Royal and other cruise lines follow NCL's lead and hike their gratuities by $4 dollars and $5 dollars per day/person depending on cabin? 

I could be wrong, but I don't think so.

Pre pandemic, Royal would change gratuities once per year at the most. I don't see another change happening so quickly.

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@Matt regarding gratuities for suite guests. Does the extra amount a suite guest pays go to the stateroom attendant because the suite is a larger size? Is the suite concierge included thus making the gratuity more? Other then paying more for a bigger cabin we don't see the reasoning behind the extra cost. When in any dining venue we are just 3 additional people enjoying what everyone else is. Does Royal give an explanation for the extra money? Again, I know about this going in just trying to understand why, not just " because you are in a suite" 

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I would guess it does have some relation to the size of the room.  Let's say one steward is expected to clean 20 standard rooms.  Would they also assign one steward to 20 larger suites? I doubt it because the suites will take longer to clean.  Therefore, if the suite steward has fewer rooms but it takes the same total amount of time to clean, then they need a higher per room rate so that they make the same amount for working the same number of hours.  Who would want to be the suite steward if it meant you made less money?

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24 minutes ago, Atlantix2000 said:

I would guess it does have some relation to the size of the room.  Let's say one steward is expected to clean 20 standard rooms.  Would they also assign one steward to 20 larger suites? I doubt it because the suites will take longer to clean.  Therefore, if the suite steward has fewer rooms but it takes the same total amount of time to clean, then they need a higher per room rate so that they make the same amount for working the same number of hours.  Who would want to be the suite steward if it meant you made less money?

That is another great question.  Clearly it takes longer to clean a 2 or 3 bedroom 2 bath suite verses a standard balcony but I am also wondering how many suites is a steward responsible for verses a steward who is responsible for balconies, oceanview or interior cabins, and what is the difference in take home pay for each?

Like someone else stated and I 100% agree with, I hope the stewards will see an increase in their paychecks as a direct result of the increase gratuities.  I hope this doesn't just end up going towards NCL's bottom line. 

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35 minutes ago, JasonOasis said:

Like someone else stated and I 100% agree with, I hope the stewards will see an increase in their paychecks as a direct result of the increase gratuities.  I hope this doesn't just end up going towards NCL's bottom line. 

It's likely both—staff will be getting more pay and less of that increase will be coming directly from NCL, but instead though this increased fee.

 

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On the Mariner in June we had the panoramic suite 1854 I believe. It was a big room with a bath and a half. The suite amenities were not there, tea kettle, no. Ice bucket, gone. Only one trash can in the entire cabin, when I asked for an additional one he said it was "broken"  When I asked for a cruise compass I thought his head would explode. He had many, many other cabins, we were his only suite so I get he was working probably at his limit.  We paid extra in gratuity at the on set for the suite, this was the first time EVER in 20 cruises we did not feel extra gratuity was warranted. The only time he spoke to us was towards the end of the sailing, then he would say hello when we saw him in the hallway. ( the next to last day) 

We want for very little, I empty the garbage into one and hang towels that are not soiled or used just to dry off after a shower. We like many of you keep a very tidy cabin out of respect for the hard working staff. This was the one and only time we felt we over paid in the gratuity dept. 

An ice bucket with ice did show up mid sailing but by that time I was over it. 

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Is there a tax advantage for the "Tips" and "Gratuities" for Royal Caribbean that we are perhaps overlooking?  If they truly are tips and gratuities, payable directly to the staff, then I would imagine the cruise lines do not have to report this as revenue and not pay corporate taxes on the money collected.  Instead, it gets passed to the staff and they would become directly responsible for any taxes.  This may be advantageous for some of the staff as they are not under US labor and tax laws (unless they are a US citizen), and this arraignment may actually be a benefit for both Royal Caribbean and the staff.  I would imagine that the income tax laws for RC ship staff and crew are with the Bahamas because that is where they are flagged.  But sales and corporate revenue is in the US because that is where they are headquartered.

These are just my thoughts and questions, I would be curious is anyone has any insights or thoughts on the topic.

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We have stopped paying for automatic gratuities. We pay our room attendant $10-$15 /day. We tip for every drink we order, We do not do MDR. We pay 18% gratuity for specialty dining and sometimes an extra tip. On the first day of every cruise, we go to customer service and have them delete gratuities. No discussion or argument.

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1 hour ago, DoomSlayer said:

Is there a tax advantage for the "Tips" and "Gratuities" for Royal Caribbean that we are perhaps overlooking?  If they truly are tips and gratuities, payable directly to the staff, then I would imagine the cruise lines do not have to report this as revenue and not pay corporate taxes on the money collected.  Instead, it gets passed to the staff and they would become directly responsible for any taxes.  This may be advantageous for some of the staff as they are not under US labor and tax laws (unless they are a US citizen), and this arraignment may actually be a benefit for both Royal Caribbean and the staff.  I would imagine that the income tax laws for RC ship staff and crew are with the Bahamas because that is where they are flagged.  But sales and corporate revenue is in the US because that is where they are headquartered.

These are just my thoughts and questions, I would be curious is anyone has any insights or thoughts on the topic.

Most crew by a vast majority are not US citizens.  Each country has their own rules but... Royal isn't an employer operating in each country as a registered company in that country.  They don't submit tax forms and do withholdings in every country.  As Ex-pats working outside of their home country most crew will be responsible for their tax situation, which given 70 - 80 counties represented would be a nightmare for any employer.  

Basically if you or I take a job in another country (legally) that foreign company isn't responsible for telling the IRS what I made or withholding taxes based on US standards as they have no means to submit withholdings to the US.  In that scenario the onus is on me to file properly with the IRS and declare my "foreign" income.  The same logic applies to a Filipino crew working outside of the Philippines, or a Chinese citizen working outside of China, or...

The registry of the ship is mostly irrelevant.  That isn't done for income tax purposes for foreign crew working on a ship.  A crew member working on a cruise ship is no different than a crew member working on a tanker ship, or cargo ship, or container ship, etc.  

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Good thing there is no inflation right now.

ESPN+ is raising my annual rate 44%.    Dog food has risen 25%.  Car rentals that used to be $45 total are now $145 for the same 2 day rental.  

My income has not risen much at all, let alone the increases I am facing daily.  

I'd love to be a supplier to these companies and tell them my rate is going up 35%.  I'm sure they would scream and find someone else to do it cheaper.  

On the other hand Royal cruise fare has increased up to 300%.  What used to be an inexpensive weekend cruise is now... nope.  Fortunately MSC hasn't lost their minds yet, I booked another one on them tonight.  I can't afford Royal anymore.  

25% gratuity increase seems cheap compared to the cruise fare increases. 

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11 hours ago, Swar said:

We have stopped paying for automatic gratuities. We pay our room attendant $10-$15 /day. We tip for every drink we order, We do not do MDR. We pay 18% gratuity for specialty dining and sometimes an extra tip. On the first day of every cruise, we go to customer service and have them delete gratuities. No discussion or argument.

Aren't  you  missing the staff who work behind the scenes?

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Missing staff? Maybe. If RCL gives me a better breakdown of where the gratuity goes, I could add them in. Paying almost $40 /day seems excessive. Some people say "if you cannot afford the gratuities, how can you afford to cruise". I pay for the service I see. I'm not saying my procedure is the best, but it is what I do. Baking gratuities into the cruise price seems the best method. 

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Understood, and by no means am I questioning anyone's generosity.  I just think, as a retired job analyst/compensation specialist, that we need a fairer compensation system.  I think of the staff I see cleaning bathrooms, vacuuming hallways, and performing other behind-the-scenes work and wonder how they are recognized/compensated.  I try to thank them for their service when I see them - "I appreciate your hard work" or similar statements.  I hope they get a share of the gratuities we pay daily, but I honestly don't know.  So in the end, I'd rather keep the default gratuities at a reasonable rate and add on extra tips when appropriate.  Frankly, I haven't seen our tipping of bartenders or servers improve our service, but I have seen our stateroom attendants and MDR staff graciously acknowledge extra gratuities.  I guess, collectively, our experiences vary widely, as does our behavior.  Happy cruises to all!

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I was informed a long time ago that because the ‘automatic gratuities’ are accumulated and dispersed by the cruise lines…which of course makes sense as the money is coming through their internal accounting…the cruise lines determine where that money goes.
They, of course, like to publicize that each penny is being sent directly into the crew’s accounts…but I understand that is only a generalization. Although they don’t put that little asterisk (*) next to the explanation, some of that money stays with the company.
The reasoning is ‘to support crew wellness activities, off duty events, theme parties, celebrations and recognition dinners’…even the cost of such things as the bicycles that the cruise lines provide for crew members to use while on shore leave.  
If that is truly where all of that money goes, along with the rest going directly to the crew…that’s fine with me. But, as with all big businesses, I’m guessing there is the usual ‘service fee’ or ‘account operating costs’ where a percentage is skimmed off the top. 
“Everybody just wants to wet their beak’.

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I just got off an NCL cruise.  I'm planning on writing up a contrast/compare later, but I have to say the number of cabin staff on Breakaway was the largest I've seen.  If I had to estimate, my steward had 10 rooms tops. Our rooms were half way between the mid ship elevators and the aft, and I passed at least 5 stewards along the way.

I also think that the bartenders pre-paid tips are all pooled, and the divided up by the number of transactions each bartender makes.  They were hustling and working non-stop when on duty, and I rarely had to wait for a drink.  There had to be some sort of incentive to work at that level for so long.

@BrianB I see you liked Breakway based on the number of cruises taken on it. I have to admit, I really liked the ship and Royal could take a few lessons from NCL.

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On 12/9/2022 at 7:29 AM, ChessE4 said:

Aren't  you  missing the staff who work behind the scenes?

How did those people get tipped before automatic gratuities? 

I'm not being rude, genuinely curious.  When we started cruising you tipped who you saw.  And now we just roll with the auto gratuities and give extra to those we see.  But when people ask about taking off gratuities, someone on here always mentions that someone then won't get a tip.  But really, how is that different from what used to happen?  Or did Royal just make more positions dependent upon tips for decent wages once auto tipping started?  I've always wondered about this.

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4 hours ago, sleepy425 said:

How did those people get tipped before automatic gratuities? 

I'm not being rude, genuinely curious.  When we started cruising you tipped who you saw.  And now we just roll with the auto gratuities and give extra to those we see.  But when people ask about taking off gratuities, someone on here always mentions that someone then won't get a tip.  But really, how is that different from what used to happen?  Or did Royal just make more positions dependent upon tips for decent wages once auto tipping started?  I've always wondered about this.

From a compensation perspective, different types of work are paid differently.  Whether "fair" or "unfair", that is the way it is.  Wage system, marine, sales, and other white-collar work are treated differently in fundamental ways.  Skilled occupations that don't have customer contact are paid differently than other occupations with less-technical skills but extensive customer contact.  Private sector compensation practices are rarely disclosed, except through certain surveys or discussions with employees/former employees.  Public sector compensation practices are normally published.  I haven't the foggiest idea how Royal pays its employees, but given more information, I might tip differently to improve the chances of pay equity.  I brought up restroom cleaners because the job doesn't appear to have a high skill requirement but is very important to the health, welfare, and satisfaction of guests.  if they aren't paid enough in normal wages, they deserve tips.  Again, I am clueless how they are paid.  I just believe that all workers, regardless of the assigned job, deserve dignity. respect, and reasonable compensation (fair compensation is always elusive).  My vote is for employee profit-sharing/gainsharing, but that is another story.....

Thus, what I do is add tips rather than subtract them.

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  • 3 weeks later...
1 hour ago, smokeybandit said:

Crew Center suggested lower tier stewards would get a raise but highest tier salaries would go down.

And it's not like room stewards are raking it in to begin with

My company played something like this a few years ago….people who were paid higher wages got less of a percentage raise than people who were making less, all other things being equal. 

It didn’t go over well.  

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January 3, 2023 

Dear Carnival Guest,

We are writing to let you know that we will be adjusting internet prices and onboard gratuity guidelines with all cruises based on the schedule below. However, we will honor existing prices for pre-paid internet purchases and pre-paid gratuities, per the dates outlined below.

  • Internet prices – effective with embarkations January 16, 2023 
    - Social: $12.75, per day 
    - Value: $17, per day 
    - Premium: $18.70, per day 
     
  • Gratuity guidelines – effective with embarkations April 1, 2023 
    - Standard staterooms: $16, per guest, per day 
    - Suites: $18, per guest, per day
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4 hours ago, smokeybandit said:

Still pretty cheap for internet, comparatively

$18.70 per day?  Carnival blocks WiFi calling.  You can't really stream very well either.  I did get 50Mbps speeds on Mardi Gras but no WiFi calling, no VPN and no streaming it made it less functional.  

The social plan is really basic texting or non-video social media only.  

A lot of people who try Value get frustrated and upgrade it to Premium, then not doing any better they get the premium refunded because it isn't really anything better than Value.  

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For NCL, it's a Daily Service Charge so they don't even try to pretend it's gratuities or tips. Translation, they can do with it as they seem fit. How's it being distributed? Is it really extra for the crew or is it baked in to the base pay? Don't know. Does the crew care? Probably not. They're happy to be working. (Although, if they work on multiple cruise lines they'll find which ones are best for them.) They also don't allow your non-refundable credit to be used for it. Their base alcohol drink package is super high and they make you pay gratuities on the full price. (Royal does this but at least the package isn't super expensive but it's probably creeping up. Follow the leader I guess.) Get just one drink on a day, you still paid gratuities on the full package price. Their free at sea is misleading. They have a sail away rate that's less than the base price for free at sea. And that's not including all the gratuities on the drink and dining you see at the end of checkout. I just gave up and don't tip EXTRA on NCL. I only sail with them because I get a good bottom line price for a solo cruiser with the drinks package and $50 excursion credit per port. I don't drink a lot but all things being equal (they aren't) it still works out better with all the extra discounts (solo cruisers, Amex offers, CruiseFirst, Shareholder credit, Caesars Diamond 20% off). There's a ton of sales/marketing engineering going on. I find a lot of hidden and confusing things. I don't find it as shady on the Royal side. I sail Royal if I can get a good deal. Obviously all the cruise lines make it hard to compare since they offer so many different things you can't directly compare. Some things are worth the extra money.

One last thing, NCL is clear they never lowered prices during the pandemic. They have directly said this publicly a couple of times because they want their shareholders to hear it. Customers don't like to hear it but NCL seems to think everything's working out for them and they're making the most money possible. I'm just trying to get the best deal possible while trying to limit the surprises. Royal is much more straight forward to me.

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