Gratuities: Whats the Point?

Gratuities: What's the Point? Cruise Tipping and Salaries Dissected

By David Swanson, Cruise Critic contributor



Tipping, the old joke goes, is not a city in China.

But for all that the average cruise passenger knows about the cruise industry's employee compensation practices, "Tipping" might as well be an obscure port of call, shrouded in mystery.

Just how much do crew members deserve or need that tip jar? With cruise lines in the driver's seat setting the seemingly mandatory tipping guidelines, are automatic gratuities added to the checkout bill a covert method for the industry to dodge paying decent wages or are they a convenience for passengers navigating a convoluted system? Can't tips be incorporated into the overall fare, or will they forever serve as an example of cruise line nickel-and-diming?

Regardless of the industry's intentions, we'd probably all be better off if passengers were more informed tippers.

What are the cruise industry tipping standards?

For a seven-night cruise on the major lines, the "auto-gratuity" currently ranges from $80.50 per person (sailing on Cunard) to $105 (on Oceania). Passengers staying in suites pay anywhere from $1 to $7 per day extra. A 15 percent gratuity is added to bar bills (18 percent aboard Celebrity, Norwegian and Oceania) and spa treatments.

With total gratuities amounting to more than $100 per person at disembarkation (including beverage gratuities), they're an add-on that rubs some frequent cruisers the wrong way. To ease the pain, many cruise lines now encourage guests to pre-pay the tips -- but doesn't that presuppose we'll receive flawless service, before we've even boarded?

And it's not hard to understand why the mainstream cruise lines prefer to leave service charges as an add-on rather than bundle them into the base cruise fare (as many luxury lines do): With cruise fares increasingly easy to research and compare, how many of us would choose one cruise line's $1,099 itinerary that included gratuities over a competing line's identical $999 sailing, with gratuities collected at check-out?



Why do cruise lines charge auto-gratuities?

The subject of gratuities comes up regularly on Cruise Critic's community boards, often sparking impassioned debate. Reading some of the comments you'd think tipping was a new or quickly evolving practice, except that it's not.

While many years ago cruise vacations were promoted as a relatively all-inclusive product -- one price pays all -- tips have long been customary for service in the mainstream cruise industry. Originally, tips were paid by passengers in cash at the end of the cruise.

Obviously, not all guests were onboard with the program -- many crew members got stiffed. So, in the 1990s, cruise lines began adding these amounts to the checkout bill, a practice that became known as the auto-gratuity. Passengers could increase (or decrease) the amount at the front desk or even have the charge removed entirely and provide tips in cash to the crew members they personally selected.

The problem with handing out cash in person is that, despite being more personalized, the average passenger does not come into contact with all the crew members that can positively impact their vacation behind the scenes. In fact, most cruise lines today pool the tips to reward more positions, although the number of crew members that participate ranges widely within the industry.

A Norwegian Cruise Line spokesperson called their $13.50 add-on a "discretionary daily service charge" that is shared by behind-the-scenes support staff such as table bussers and maitre d's. "Our crew work as a team and, therefore, service charges are aggregated among all eligible crew members," she added. But Norwegian says certain staff positions -- such as concierge, butler, youth program and beverage staff -- do not receive part of the service charge, and the line encourages passengers to reward these crew members with additional "appropriate gratuities." (An 18 percent gratuity is also levied on specialty dining.)

On Carnival, the $12.95-per-day automated gratuity is divvied up, with half going to the dining team, $4.05 to housekeeping and the balance going to "alternative services" -- described as culinary and hotel services, key entertainment and guest-services positions.



What are typical crew member salaries?

So, what are the cruise industry's going salaries? First, let's address the crew members that would not normally receive tips.

Ever wonder how much a captain makes? A cruise ship captain's salary can be six figures annually. Captains on the largest ships, responsible for 5,000 or more passengers and crew members, can have a salary in excess of $150,000, typically working two months on, two months off.

The hotel director on a medium-to-large ship -- the officer that oversees the majority of the crew -- will receive a salary in excess of $100,000 annually, usually working four months on, with two months off. The food and beverage manager on a similar ship can gross anywhere from $3,500 to $7,500 or more per month, depending not just on the size of the ship but on the level of cuisine being prepared.

An executive chef can expect to earn $4,000 to $8,000 monthly, while a chef de partie salary ranges from $1,000 to $2,500. The assistant chef or trainee cook takes home anywhere from $700 to $1,000, while kitchen cleaners come in at about $600 per month. Such entry-level positions in the kitchen offer some of the lowest wages on the ship, but also typically provide the best opportunities for advancement. Muddying the waters further: Compensation for an entry-level kitchen position may be different for someone from Indonesia versus a crew member hailing from India performing the same job.

"Although the monthly amounts may seem meager to people in developed countries, they are significantly higher than what those crew members would earn in their home countries," explains Katie Collins, Associate Editor with CruiseShipCareers.com, a cruise line recruiting resource. (A notable exception is Norwegian's Pride of America, a U.S.-flagged ship sailing in Hawaii, where the state and federal laws govern employment and minimum wage, and crew members must be U.S. citizens.)

For customer-facing positions, gratuities usually come into play. "Gratuities make up most of the compensation for crew in the housekeeping and food and beverage departments," says Collins. The base wage is usually low -- sometimes as little as $2 a day -- but income from tips can represent as much as 95 percent of the take-home total.

Including gratuities, total compensation for an assistant waiter position ranges anywhere from $900 to as much as $2,200 a month; experienced dining room waiters can earn upward of $3,200 a month. The assistant maitre d' can earn $4,000 or more, and is generally part of the tip pool.

Total compensation for bartenders can range anywhere from $1,800 to $2,500, while bar wait staff earn between $1,200 and $2,200 a month.

On the housekeeping side, a cabin steward salary can range between $650 and $1,150 per month, including gratuities, though on a luxury line the salary might exceed $2,000 per month once tips are factored in. A housekeeping floor supervisor is included in the tip pool on most lines, and takes home $1,300 or more. A laundry attendant is usually not compensated with gratuities and might earn as little as $700 a month.

To be sure, most crew positions are not glamorous, and their salaries are not high. Most crew members work 10 to 12 hours a day, and as many as seven full days a week. But cruise jobs come with several noteworthy benefits: Room and board is fully covered while sailing and, once an initial contract is completed, round trip airfare is picked up by the cruise line. This allows for crew members to build up savings, or to send funds back home while at sea. Some learn valuable skills while working at sea -- skills they can take with them to develop a business or service at home. Crew members receive medical treatment for work-related illness or injuries while aboard, and the cruise line will provide transfer to a land-based hospital or home, if necessary.



Do I really have to pay the auto-gratuity?

Still, for many of us, crew member compensation is below our standards for a "going wage," even for those living in developing countries where quality jobs are rare. A little cash on the side for a waiter or housekeeper is not only greatly appreciated, but it can make a big difference to a hardworking crew member who might have family back home to support.

And for those who want to do something extra, there are ways beyond tip envelopes that can positively impact a crew member's career. As a Holland America spokesperson explained:

"Write a note to the hotel director and let them know who was great. Comments like that get placed in their record, and they'll get called out for doing a great job. It may mean somebody gets moved up the chain. It's not that they don't want the tip, but that extra acknowledgement can mean a lot."

But don't be a cheapskate -- pay the gratuity. You may not agree with how the cruise line unbundles their employee compensation, but some crew members are depending on that tip for a fair wage.

After all, as another old joke goes, "Denial is not a river in Egypt."