Special Report: The great cruise gratuities debate


I took this Photo on the Norwegian Jade, the gentleman in the front has gained a promotion. The crew that you see and don’t see work hard to make sure that we have the best possible cruise experience, they deserve our Gratuities and more.

A hike in rates by Royal Caribbean and Celebrity Cruises reignited the debate about onboard tipping. Amie Keelie and Harry Kemble report

News that Royal Caribbean International and Celebrity Cruises have upped their gratuities by 7% prompted dozens of responses from cruisers on consumer forums (Travel Weekly, January 4).

Some questioned whether the service they receive justified the hike. Some asked if charging gratuities meant cruise lines get away with paying staff low basic salaries. And some wondered if the tips even went to the staff.

Others said they were happy to reward hardworking crew for the long hours they put in to make their holidays as good as possible.

So which lines charge the most, why do gratuities even exist and are they justified?

Why do gratuities exist?

The concept of automatic gratuities stemmed from cruise ships being a cashless environment. Generally, passengers did not carry wads of cash and so were unable to reward crew members for excellent service.

It also became a way to distribute tips fairly to all the crew, including those behind the scenes working just as hard as the butler that passengers saw every day.

Lines justify the cost by claiming a superior level of customer service guests receives on a cruise ship compared with a hotel or resort on land.

“When we do our survey of guests, one of their top reasons they give to cruise is the service levels, so we stand up well against other sectors,” says Andy Harmer, Clia’s senior vice-president for membership.

“In cruise, you get to build up a relationship with the crew – you see them several times a day – compared to a hotel where you might not see the person turning down your bed at all.”

Ben Bouldin, associate vice-president of Royal Caribbean International and managing director for the UK and Ireland, agrees. “Gratuities are something our customers are comfortable with because they understand the outstanding level of service.”

However, as one agent told Travel Weekly: “If a cruise line is going to increase its gratuities, it had better make sure its customer service is impeccable”.

It is accepted that American cruisers are more than happy to pay automatic gratuities, often in advance of their cruise, but Brits much less so. Cruise lines have adapted their policies to reflect the different markets they sell in, allowing cruise customers to opt out of paying auto-gratuities at the end of their cruise when they pay their final bill.

“[In Britain] we don’t have a history of tipping in the way other cultures have,” says Harmer. “What a lot of passengers don’t realise is that if they do have issues, they should raise these on the ship so they can be dealt with and if they’re not happy they can have [the gratuity] taken off.”

Mike Hall, Cruise & Maritime Voyages’ head of marketing, says: “The reason why gratuities are such an issue is because of that cultural difference. Americans will give a staff member $50, while here in the UK, a conversation about gratuities is one we do not want to have.”

Gratuity rates

Royal and Celebrity Cruises’ recent increases now mean passengers pay $14.50 a day in standard accommodation, making it one of the highest in the sector.

“Royal and Celebrity need to be careful because it could put customers off,” the cruise agent added. “For a couple travelling on a 14-night cruise that’s an extra $400, so it needs to be better than a hotel which doesn’t have auto-gratuities.”

The agent also warned that if gratuities continued to rise on mainstream lines, luxury cruise brands, which more often than not include them in the price, would become more appealing.

By comparison, discretionary gratuity fees for P&O Cruises, MSC Cruises, Fred Olsen Cruise Lines, CMV and Carnival Cruise Line range from £4 to €13 per passenger per night and continue to be automatically added to onboard accounts. The majority of river cruise lines suggest a recommended amount to give the crew at the end of their cruise.

Last year, Norwegian Cruise Line became the first mainstream line to incorporate gratuities, among a host of other ‘extras’, into its fares, when it rolled out its Premium All Inclusive concept.

NCL’s Nick Wilkinson said: “Premium All Inclusive has driven greater simplicity for agents having to explain and sell cruises, and greater confidence in consumers having to budget.

“The biggest change since introducing Premium All-Inclusive is double-digit growth we’ve seen in the long-tail of agents we’ve never worked with before, now selling Norwegian. They are comfortable selling us.”

So could other mainstream lines follow suit? Wilkinson added: “I think it’s very telling how many mainstream lines are using the term ‘all-inclusive’ in their wave campaigns as they recognise it appeals to agents and consumers.

“But we are the only mainstream line offering a truly all-inclusive product, including gratuities.”

Full breakdown by cruise line here

Views on gratuities

“Gratuity fees should be phased out, not increased. They are an archaic way of paying salaries, they should be included in the fare.”

David Speakman, chairman, Travel Counsellors

“I wish all cruise companies would include them [gratuities], then everyone would pay the same. It would stop a lot of people asking for them to be taken off once on board.”

Travel agent, name withheld

“As customers, we would never take off service and hotel charges but, in a way, I hope many do. You never know, we might yet see the dawn of non-deductible service or all-inclusive charges on cruises. If all passengers paid their gratuities on a two-week cruise, that would be $578,000 on Eclipse – getting a little silly, don’t you think? The cruise lines are cutting back and increasing gratuities.”

New Fred Olsen ships ‘on the drawing board’

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Fred Olsen Cruise four ships together

Time is right to consider building new ships for Fred Olsen Cruises, according to the cruise line’s chairman.

Speaking at the launch of the operator’s 2018/19 season brochures Fred Olsen Jnr, son of the company’s founder Fred Olsen Snr, said there were plans ‘on the drawing board’ for new ocean vessels.

“Just over ten years ago in 2005 we looked at having a new ship but in terms of finances it didn’t make sense at the time. We are looking at it again and we have ships on the drawing board.

“Any new ships we do produce in the future will be smaller ocean ships which is what we want as a brand and what our customers want.”

UK managing director for the cruise line Mike Rodwell said: “We look at opportunities all the time and a new ship is of course an aspiration of ours but it has to make financial sense.”

At the London launch event on Wednesday evening, the cruise line unveiled its first ever dedicated fly-cruise brochure which Rodwell said had been created following support from the travel trade.

“We’re known for our ex-UK sailings but in the last few years fly cruises have become more important to our customers and to the agents who are selling them,” he said.

“This is a brochure we believe the travel trade can really get behind, as it is what they have told us their customers want.”

In addition to the fly-cruises the line’s four ships – Balmoral, Braemar, Boudicca and Black Watch – will visit 13 new ports of call, including Anavilhanas in Brazil, Khasab in Oman, St Tropez in France and Sanremo in Italy.

Newly appointed sales and marketing director Justin Stanton revealed the line was almost 80% sold for 2017/18, and said he looked forward to working with the trade and sales team to increase agent engagement and knowledge of the brand.

“Travel agents are absolutely key to our continuing success, especially as more than two-thirds of our sales are done through the trade,” he said.

“The next year will see a renewed focus on supporting agents in their knowledge of the product and we can’t wait to get agents on board Black Watch since its drastic renovation.”

CRUISE SEASON BRINGS IN £7M

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Cunard’s Three Queens in Liverpool

Liverpool Cruise Terminal helped to generate an economic impact of about £7m during the summer season after welcoming more than 100,000 passengers, according to the latest figures.

A report to go before the city council’s Culture, Tourism and Events Select Committee next week said 63 cruise liners visited, bringing 114,676 passengers and crew to Liverpool. Inaugural calls were made in 2016 by four different vessels, including two visits by the Disney Magic ship.

To coincide with second the Disney Magic visit, a free family-focused event was programmed comprising an outdoor cinema screen showing Disney films, a Victorian bandstand with performances and a firework finale for both passengers and spectators.

In 2017 – a year when Liverpool Cruise Terminal celebrates its tenth anniversary – there have already been 65 confirmed cruise calls, with more than 108,000 passengers and crew expected.

Earlier this year, it was revealed that plans are being drawn up to build a permanent cruise liner building. Liverpool City Council has identified the former Princes Jetty at Princes Parade, close to the landing stage, as a preferred location.