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War declared on tipping but cruise lines just ramp it up

October 26, 2015 Cruise, Headline News 3 Comments Email Email

egtmedia59War has been declared on the custom of tipping for service, a practice that greatly affects tourism and tourists. Amazingly, the revolt has begun in the spiritual heart of tipping – New York City – and ripples are spreading.

One of the most famous names in America’s dining business, Danny Meyer, chief executive of Union Square Hospitality Group, has announced that he plans to gradually eliminate tipping at the company’s 13 restaurants and instead charge higher menu prices to ensure staff are paid fairly. Bills presented to diners won’t even include a line to write a tip on.

Meyer is the founder of the fast-growing US burger chain Shake Shack, whose average store performance of USD 4 million was more than twice that of McDonald’s within the US, at last count.Tips

Apart from Shake Shack, Meyer has long been “one of the most prominent and influential restaurateurs in New York City, the force behind celebrated establishments including Gramercy Tavern, Union Square Cafe, Blue Smoke, and the Modern at the Museum of Modern Art” – according to online magazine Slate.com, which is linked with Amazon.com.

Slate feels that if anybody is capable of turning the tide against tipping, “at least in the upper echelons of the restaurant world”, it may be Meyer.

Tipping is widespread and has long since taken hold in Australia, but in America, the practice is a different beast entirely. Some US establishments pay staff abysmal wages and expect them to survive on tips. US federal law lets restaurants pay workers as little as USD 2.13 hour (though many states require somewhat more) with the rest being made up of tips, or “gratuities” as they are sometimes called.

As a result, restaurant waiters can earn more than chefs, even though the latter have often been expensively trained.

Apart from places like New York, tipping is rampant among cruise lines. Some Australian wholesalers and cruise firms offer cruise holidays in which the tips are taken care of. Note to consumers: these are worthwhile and well worth looking for.

P&O Australia, Princess Cruises, Scenic Tours and Avalon Waterways include the cost of tips in the overall up-front price when cruisers book and pay for their holidays in Australia. It’s easier that way. Consumers should check before paying.

Internationally, many cruise lines regard tips the same way airlines regard “ancillaries” – a way of reducing the upfront price the customer pays, only to load on chargeable extras later. In the same way that many US airlines charge their customers to check in a suitcase, cruise lines often expect customers to pay substantial tips to a host of onboard personnel, from waiters and bar staff to cabin stewards. Even shore excursions can attract a hefty “gratuity”.

Royal Caribbean International imposed a new tipping schedule on passengers from 1 July 2015, Cruise Critic reported. The new amount is USD 12.95 per day (up from USD 12) for standard cabin cruisers and USD 15.95 (up from USD 14.25) for passengers in suites.

“Passengers with existing bookings can pre-pay their gratuities before June 1 to lock in the current rate,” Cruise Critic noted. “Any gratuities pre-paid after June 1 will be charged at the new amount.”

In July, Cruise Critic reported that gratuities paid to onboard staff on Norwegian Cruise Line were set to rise for the second time this year.

Effective for all sailings beginning on or after 1 August 2015, passengers staying in any cabin up to and including a mini-suite have been charged USD 13.50 per person, per day; suite passengers have been charged USD 15.50 per person, per day.

In February, the line increased daily service charges from USD 12 to USD 12.95.

The daily service charge or DSC is put on passengers’ bills automatically at the end of a cruise. Travellers can remove the automatic gratuities at the guest services desk if they wish  and substitute their own tips, which lets the line say that it is not compulsory.

NCL also announced it would charge a la carte pricing in many of its specialty restaurants, beginning fleetwide in 2016. In May, the line began charging a USD 7.95 fee for room service (excluding coffee and Continental breakfast), Cruise Critic said.

Written by Peter Needham

Currently there are "3 comments" on this Article:

  1. AgentGerko says:

    Princess Cruises only include tips in their Australian-based fleet, not on their international fleet.
    The absolute worst tips on cruise ships are the compulsory 15% ‘gratuity’ on drinks over the bar. These are mandatory, cannot be removed and they still have a line on the receipts to add a discretionary tip on top. For a family of four, cruise line tips can add up to $1000 to the onboard costs of a cruise.

  2. Dan Nebauer says:

    We do not include tipping in InterAsia’s tour products – this would make tipping compulsory which it should never be. The practice of cruise lines demanding set tipping is abhorrent and should not be allowed as it is stacking the prices.

    We do provide recommended guidelines but it is entirely up to the consumer how much they tip for any given service.

  3. Crystal Cruises abolished tips a few years ago. It’s the right way to go.

    In NY the pressure to tip high (20%+) in restaurants used to be uncomfortable. I hated it. Haven’t been to NY for a long time so I’m not sure what the current ‘norm’ is.

    I strongly concur it’s an outdated practice and I believe like Japan we should remove it completely. A fair wage for a fair days work to be paid by the employer not the customer!

    Tourism and hospitality owners are guilty of keeping the practice ‘alive’ when majority of consumers oppose it. It’s an anomaly and eventually market forces will prevail.

    Andrew J Wood – THAILAND.

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