Should Cruise Lines Include Gratuities in the Fare?

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There is great debate among cruise passengers over gratuities and whether they should be automatically part of the cruise fare or an additional charge.

While there is no question that crew members are exceptionally hard-working and often go above and beyond to make every cruise special and memorable, how should those crew members be compensated? Should cruise lines include gratuities in the fare?

What Are Gratuities?

Gratuities are payments made for extra special service, a monetary “thank you” for the hard work a cruise crew member puts in to the service they offer. These payments are usually for passenger-facing and related crew members who serve all passengers on board, such as stateroom stewards, dining staff, laundry operators, and similar positions.

Other passenger-facing crew members, such as casino croupiers, spa staff, and bartenders, may be offered gratuities individually, or automatic gratuities will be added to the charges when their services are used.

Royal Caribbean Cruise Ships
Photo Credit: Captain Wang / Shutterstock

Gratuities may also be called tips or bonuses, but whatever they are called, a gratuity is traditionally offered only for exceptional service, above and beyond what is customarily expected.

Not every culture supports the idea of gratuities, and it can be a controversial practice where different cultures intersect, such as on a cruise ship that hosts passengers from many countries and may visit a wide range of ports of call on a single voyage.

Gratuities or Service Fees?

In any discussion of gratuities, it is important to recognize the difference between an optional gratuity and a required service fee or service charge.

While gratuities are always meant to be at guests’ discretion for extra, above-and-beyond services, service fees are typically mandatory and may be applied to regular services that require extra labor to complete expected tasks.

An example of a service charge is adding a fee to large groups at restaurants. This extra fee covers the additional labor necessary to serve a large party, which means the staff involved cannot serve as many additional tables. The service fee, then, is intended to make up for that extra required labor, but does not necessarily compensate extraordinary service.

How Gratuities Work on Cruise Ships

On cruise ships, gratuity charges are assessed at a flat rate, typically ranging from $14-18 per passenger, per day. That fee is then subdivided and distributed to the appropriate crew members with their regular paychecks.

Read More: Carnival Cruise Line to Increase Gratuities From May 2022

Carnival Cruise Ship Deck
Photo Credit: Beachside Tribe / Shutterstock

Depending on the cruise line, guests under 2 or 3 years of age may not be assessed gratuities. Guests in suites that have extra included services or personalized butler or concierge services often have slightly higher gratuity rates.

Many major cruise lines automatically add gratuities to passengers’ accounts toward the end of the cruise as a convenience. Because many guests, particularly new cruisers, may not be aware of whom to tip or what amounts are considered suitable, automatic gratuities are an easy way to acknowledge crew members’ service without awkwardness or unintentional mistakes.

Why Gratuities Aren’t Always Part of Cruise Fares

If gratuities are automatically charged to guests’ accounts, why aren’t they simply included in the cruise fare?

It can be disconcerting to passengers to suddenly have large gratuity charges appear on their account, especially if they may have spent more than anticipated during the cruise or if their budget is already tight.

For example, if gratuities are $15 per person, per day, a family of four – two parents and two older children – enjoying a 7-night cruise getaway would be assessed $420 for gratuities, a very significant charge on top of other cruise and travel expenses.

There are many thoughts as to why gratuities aren’t automatically included in all cruise fares. In part, it is because gratuities are intended to be at guests’ discretion, and adding them as a separate charge still gives cruise passengers the option to adjust these tips however they would like.

Some cruise passengers also prefer to pay gratuities in cash, offering a more personal thank you, perhaps with a note, to crew members who have made their vacation more special.

These passengers may also prefer to keep credit card purchases minimized, and therefore prefer to pay tips in cash. If gratuities were already part of the cruise fare, this option would no longer be possible.

It is also possible that different countries where cruise ships are registered, visit, or homeported have different laws related to how crew wages and gratuities may be taxed.

If gratuities were included in the fare, they may count as a different type of wage to employees, and therefore be subject to different tax rates or tax reporting requirements.

How Much Do Cruise Ship Workers Make
Photo Copyright: Cruise Hive

More controversial is the popular idea that cruise lines are forcing guests to supplement crew members’ wages in order to avoid increasing base pay rates for their employees.

It is true that crew members salaries are often lower than would be expected in similar land-based occupations. It is important, however, to remember that crew members also receive other benefits such as room and board, even though their pay may be lower.

Furthermore, the wages with which crew members support their families are often used in countries with different economies and standards of living than cruise travelers may realize.

Despite these possible issues, some cruise lines do include gratuities in cruise fares. Many premium and luxury lines, such as Celebrity Cruises, Virgin Voyages, Silversea Cruises, Regent Seven Seas Cruises, and Azamara Cruises, include crew members’ tips in the base cruise fare, with no additional gratuity charges added to passengers’ accounts during the cruise.

Pre-Paid Is Not Included

Another gratuity option available through many major cruise lines, including Carnival Cruise Line, Royal Caribbean International, and Norwegian Cruise Line, is for guests to pre-pay their gratuities.

This can be done when the cruise is initially booked or added on at any time prior to embarkation. If guests pre-pay, they may have a slightly lower or discounted gratuity rate, or be able to lock in a specific gratuity rate before a planned increase in overall gratuities.

Pre-paying gratuities, however, is a passenger’s choice, and is not considered including the tips in the cruise fare.

Pros and Cons of Including Gratuities in Cruise Fares

There are many benefits, as well as possible detriments, to incorporating crew members’ gratuities directly in cruise fares. If cruise lines did do this, the pros would include:

  • No large, unexpected charges would be added to guests’ accounts during the cruise, so there may be less confusion about onboard charges.
  • New cruise travelers would be better able to budget for their complete cruise vacation, without charges they might not have anticipated.
  • All passengers would be required to pay gratuities at the same rate, ensuring more equitable pay rates for crew members.
  • More transparent overall pricing for the entire cruise, without debates or misunderstandings about crew members’ pay rates.
  • Behind-the-scenes crew members would still receive gratuities as the overall wage pool would be divided among all tip-earning staff.

At the same time, there are also potential problems with adding gratuities to cruise fares. The cons of this option include:

  • Not permitting cruise passengers to adjust tips at their discretion, which could cause cultural conflicts and misunderstandings.
  • Potentially reducing crew members’ passion to provide excellent service, if gratuities are guaranteed and automatic.
  • Raising cruise fares to higher prices that may seem unreasonable, especially for new cruise travelers who aren’t aware of the cost breakdown.
  • Tax differences depending on where a cruise ship is based could create a more complicated system for gratuity rates.

Passenger Thoughts

When asked, the vast majority of cruise passengers do prefer the idea that gratuities should be incorporated into a cruise fare. This would eliminate the large charges to passengers’ accounts, and ensure that all the hard-working crew members receive proper gratuities.

Of course, it would always be passengers’ option to offer additional gratuities to individual crew members who stand out with extra service or extraordinary tasks, something many cruise travelers already do.

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