It’s one of the most contentious payments cruise lines demand from their guests: gratuities have sparked debates for years about how high they are, and where the money goes.
Cruise lines say gratuities reward and recognise the men and women who do so much to make cruising special: the room attendants, waiters and waitresses, and an army of workers behind the scenes.
But questions around how much of their wages are made up of tips are never officially answered.
Some say it can be as much as 95% – and one staff recruiter told Cruise Passenger cabin attendants can receive just $50 a month before gratuities are factored in.
New reports released recently by the US Securities and Exchange Commission (SEC) reveal the 2018 median annual salary of the three largest cruise companies. They actually show, once conditions are taken into consideration, cruise crew wages are are at least equivalent to shore pay, and can be better.
But these figures always include gratuity payments. That’s what makes the difference.
Website Business Insider reported the 2018 median annual salary of the three largest cruise companies:
- Carnival Corporation: USD$16,622 ($23,850)
- Royal Caribbean Cruises: USD$19,396 ($27,831)
- Norwegian Cruise Line Holdings: USD$20,101 ($28,842)
Carnival Corporation states in its submission to the SEC: “This figure includes gratuities directly billed to our guests, but excludes any cash gratuities paid directly to the employee by guests.
“It also excludes room and meals, transportation to and from the ship and medical care, which are provided to our crew members without charge.”
Norwegian Cruise Line (NCL) states that the salary includes gratuities, fixed cash pay, overtime pay and shipboard pension.
Some reports have compared these salary figures to legislated minimum wage figures. But that’s not comparing apples with apples, as cruise lines are quick to point out.
Crews come from all over the world, so which minimum wage applies? And anyway, ships are subject to the laws of the country of registration – often chosen because they don’t impose such legislation.
Crew members are also provided with benefits like room and board, meals, medical care and other benefits.
That’s hard to quantify. But let’s take an average hostel cost in Australia of $30 per day plus $10 per day for food for a year, totalling $14,600. This figure, added to the median annual salary of Carnival Corporation’s staff, gives you $38,450, which is just over the Australian annual minimum wage of $37,398.40.
But that still means those gratuity payments are essential to ensure crews get a reasonable wage.
How are gratuities handed out and percentages calculated? No-one will say.
The Carnival website states: “100 per cent of your gratuities are distributed to the crew who you interact with, such as your stateroom attendants, dining, bar and culinary services staff, as well as others who work behind the scenes to enhance your overall cruise experience.”
When sailing abroad, many cruise lines automatically apply gratuities to the final bill, although some give guests the option to remove or change the figure should they wish.
Each line has its own guidelines on the appropriate amount of gratuities.
How much money is involved? Again, we don’t know.
But a ship with 3,000 passengers where guests pay $20 a day in gratuities would accumulate $840,000 on a 14-day sailing.
So a crew of 1,800 should receive $932 in gratuities a month if all the money were divided equally. If the crew worked 10 months a year, $9320 of their annual salary would be made up of gratuities.
According to the crew handbook by Cruise Staff, a cruise ship employment service, the expected salary range for cabin stewards is US$700 to US$1800 ($1004 to $2583).
Cruise Staff explains that the figure depends on the percentage of gratuities. The gratuities received are also a combination of those redistributed by the cruise line as well as tips received directly from passengers.
The salary of a service crew who works behind the scene like a laundry helper starts from US$500 to US$800 a month ($717 to $1148).
According to MSN Lifestyle, 9.7 per cent of the average passenger spend on Royal Caribbean goes to crew payroll.
In 2018, the average passenger spent US$1,560 ($2229) on their cruise vacation with Royal Caribbean, of which USD$151 ($215) went to the crew.
The line booked nearly 6.1 million passengers on their ships worldwide and passengers spent roughly US$9.5 billion. The crew payroll portioned out and divided across their 77,000 employees arrives at US$11,967.
Cruise Lines International Australia (CLIA) assures that “A highly skilled, highly satisfied crew is key to providing an exceptional cruise experience for passengers. Cruise lines accomplish this by investing heavily in their crew, offering extremely competitive packages of wages and benefits and ensuring they have the training to improve their skills and advance their careers.”
“In addition to their salary, crew members are provided with medical care, room and board, meals and other benefits.
“Crew members show a high level of satisfaction with their jobs and opportunities for career advancement, and employee retention rates in the cruise industry are upwards of 80 per cent.”
Norwegian Cruise Line Holdings says that it does not comment on crew salary information. Carnival declined a request for comment and Royal Caribbean did not respond to requests for comment.
So next time you question gratuities, remember how critical they are to the men and women who work hard to make cruise holidays special.
Australia and New Zealand’s homeported fleet largely don’t break out gratuities because, as cruise lines explain, tipping is not part of Australia’s culture.
So the money is consolidated into cruise fares.
Perhaps this is a fairer and more sensible way to handle this sometimes sensitive issue.
What do you think? Should gratuities be consolidated into cruise crews pay? Let us know in the comments below.
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I worked in the maritime industry most of my working life and had first hand experience with cruise lines. Basically they are bastards, nothing less. 10 years ago, the target “extraction of funds” from EACH passenger was us$100 per person per day. Drinks, tours, tips onboard sales etc. I have mentioned this to numerous friends and each have concurred similar amounts at the end of the cruise. A lot of people do not realize that most of the main cruise brands are owned by the same company P & O, Princess, Cunard, Carnival, Costa, Aida, Holland America, Seabourn and Princess. So the grab for the $$ is similar in all these companies. I would not trust ANY of them to pass 100% of gratuities back to ALL crew. We tip as we see fit, but always demand tips be eliminated from our account. Royal Caribbean stands alone in the market. They were considering working gratuities into prices in the Oz market as we hate tipping generally. But advertised rates will always prevail as the number of home port ships in Oz increases and demand for bums on beds increases. Oz home port ships crew are not paid Oz wages; it would send them broke as we could not afford the cruises!
Princess Cruises, with ships operating in Australia, actually increase the fares to pay the workers better, and do not have compulsory gratuities. I still give my table wait staff and cabin steward a tip if they have performed well, as they usually do. Gratuities are an American abomination, because they refuse to pay decent wages to employees across the whole of American industry, in the belief that it makes them more internationally competitive. IT DOES NOT!
Unfortunately even Cunard charge these gratuities, so I just refuse to buy anything on their ships, and let the “free” cabin bonuses pay for the gratuities.
Lets get something straight. The wages policy of any Cruise Liner Company do not concern me, and any notion that “gratuities” should be paid as a matter of course is rubbish. In fact, we have turned right of the “Princess Cruise Line” because it is so obviously ripping consumers off with its onboard marketing and “in your face” commercial sales operations geared to load your credit cards along the way. It was normal for us to do a daily “drinks count” for example after discovering extra drinks charges being levied against our cards. It was so bad, we would audit our account daily and had to confront desk staff each day to recover charges. Don’t get me wrong, we paid a gratuity in cash to staff that went above and beyond what we believed was good service, but we opted out (by signing the gratuity waiver) of any other. While American tradition might be the norm, it doesn’t cut it with us (nor will it ever).
I think gratuities should be in cluded in the fare price. It makes it very hard to budget for a holiday when you are suddenly expected to pay hundreds of dollars extra when boarding. When all said and done a cruise holiday is still a good option for a relaxed holiday.
I tòo would like gratuities included in the price of cruise. I am a pensioner and when going on a holiday I like to know the money I have saved is mine to spend as I choose.
My wife and I cruise with P……. .We normally travel in a ‘mini-suite’ and consequently deemed richer than other passengers and each of us is charged a higher ‘daily gratuity’. We also always tip our Room Steward generously as do we our Dining Waiter and Junior Waiter…it is personal and if our service is less than expected less is paid. Our major beef is the unavoidable 18% gratuity applied to our drinks. This is an outrageous impost! Don’t mention to us the flagrant rip-off associated with ship supplied excursions.All this, coupled with a decline in service standards, has resulted in us deciding that the cost is just not worth the angst. As ‘Elite’ passengers we have been extremely loyal to the Company but see little in return other than having laundry done for free on a daily basis. We also have travelled ‘Club Class’ however,it too has deteriorated as each trip, the number of passengers in this class been increased to milk dry those with a perception of exclusivity. Our friends travel half as much as we do yet have no beef with their choice of line. ‘S……S…’ cruises are all inclusive…everything , including gratuities, drinks, most excursions…the lot. As we leave Princess, we look forward to joining our friends on what we see as the future of value for money cruising.
What a question?
Everything else than a fair living wage is exploitation.
Putting the cost of offering a service back to the customer is illegal in Australia.
Tipping is something very different. That is saying thank you for a good service and should never ever be part of the living wage.
Shame on the US for spreading this slave related practice to the world and giving it a nice sounding name.
Compulsory Tipping or Graduities is an American invention to artificially DEFLATE the cost of living. For example, you buy a beer at a bar where the price is stated at say, $5. You leave a $2 tip. So the actual price of your beer is $7! But for the calculation of CPI, only $5 Is recorded! How fake is that?
Like many other Aussies, I firmly believe in tipping for EXCEPTIONAL service, otherwise they’re just doing their job! Why would I tip for that???
In addition, there is no transparency offered by cruise companies about the collection & distribution of tips. How do I know if it doesn’t go towards propping up the cruise company’s bottom line!
I believe cruise companies should stop this unconscionable act of not paying “fair” wages. Although “fair” is a bit hard to define. In Australia, our wages are so high because Unions keep pushing them up, which increases the cost of production, hence cost of living. And the Labor party is supportive of this as they will collect more in taxes! And one thought they were magnanimous! They’re not stupid! I think it’s time we get tax cuts to increase our after tax income, and keep costs lower.
Back to tipping on cruises, I prefer to tip individually, to those who service me well. The cruise companies argue that many “unseen” crew don’t get tips. Well, I have no assurance that they do anyway, so what’s so different?
Just don’t hold me responsible for the reprehensibly low wages the cruise companies choose to pay their crew!
Personally i believe if it’s crew salary being paid, that’s not a tip. Australians generally don’t believe in tips and that’s a reflection of the much fairer basic wage and conditions enjoyed in Australia than say the USA and not a reflection of any mean spirit. In fact it should be called something like “crew salary supplement” or similar. Australians do believe in a fair wage being paid.
When it is called tipping, if the service isn’t well over 100% we don’t expect to tip either!
So being honest with customers, at least in Australia, would be a better strategy.
Hello
I have been on many Cruises and our Cabin Staff is worthy of a Tip at the end of our cruise
What we do is we say to them if you look after us we will look after you at the end. They do a terrific job nothing is a problem room always clean and tidy.
As for Dining and Bars used to tip but no more as the price of Drinks have got out of hand mixer drinks you can hardly taste the alachol in the glass Dining rooms you just get basic service hardly anyone now asks if everything is ok so I don’t see why we have to make up their wages in the form of Tipping The company should pay the proper wage to their employees.
Gratuities should be incorporated in the fare price. Cruise lines offer a cheap cruise price as a marketing tool to get passengers to buy their product whilst hiding gratuities in the fine print as other charges…..great for marketing but it’s deceptive conduct in my view so as to get people to book due to the excitement of the price their paying that they forget to look at the fine print. It is deceptive conduct as those extra charges should be listed and amounts indicated underneath the fare price…..but they don’t do that for a reason……they may not get to book the cruise..
Having cruised on a large Italian shipping company, We experienced discrimination by the cruise line because we refused to pay the “tip money”. Like most Australians we don’t like to be TOLD to pay tips but we are always happy to reward a great service. And pay according to the service.Hotels and resorts don’t charge for extra tips for staff so why should shipping? Unless the “tips” are already figured into salaries of hotel staff and that is fine. But my issue is, fairness. Do Women staff on these Cruise Liners get the same as men? Do front line workers get the same as behind the scene workers. Are the cleaners and engine room workers recognize as important part of crew, and paid accordingly. A lot of these people have to leave home and families,for long periods of time and this can be problematic. Young people who chose the lifestyle, from my discussion with them, seem to love the lifestyle. Speaking to a lovely woman who was attending to cleaning our room, on one cruise, it was almost servitude, she was working for nothing really as she was paying off debts from gambling in her home country!!!! This was 11 years ago when we experience the poor treatment of staff by the higher ups! Where refused to pay because we know the money was going to the wrong people on this cruise line.We where pointed out as the ,”people not paying tips” they use the polite word gratuities but it is Tips for bullies.Shipping used to be controled by the Seamans’ Unions, with the loss of Unions to protect the weak and voiceless, this is what you get!!!! The World is a very different place now. It is not the 1980s any more. Sadly. We still travel, a lot, but are extremely careful of where our dollar goes.
I am australian and dont tip unless exceptional service. When I stay at a resort I do not tip unless I want to. I don’t like cruising anymore for this reason, I have been on a cruise 4 times now and I have watched the service go down and the prices go up, especially the drinks, no more I’m done. I will holiday else where.
It is my understanding that whilst the ship is in Australian waters the crew are paid at the Australian rate of pay for their work. Union members fought for the right of International crew members to recieve this.
On our last cruise we chose to remove shipboard automatic tipping and exercised our own judgement on who we tipped. Now that we are on a fixed income it is something that has a huge impact on us and if we now tipped at the ships calculated rate we simply would not be able to cruise anymore.
Shipping companies are the ones who are responsible for paying a fair rate of pay and how do they get away with the system that exists now is my question.
The highest minimum wage for a domestic in the Philippines is 4000 php per month, about 80 usd, most regions have lower rates like 2500 php (google it)
As the “gratuities ” work out at more than 20 usd per staff member per day (twice as many passengers than staff) we are in effect paying their wages I doubt if they get even some of it…
Staff should be paid a proper wages like in Europe and Australia, Americans are hopelessly behind in that regard
NO tipping, adjust cruise prices if you have to!
Just pay your staff, instead of getting the passengers to top their wages up. Or just put it in the price in the first place, hate getting told l have to pay extra, it should be my choice.
Another Aussie. I don’t mind tipping those who go above and beyond. Our laws govern that the advertised price must be all inclusive, including taxes and any tips. Hence why we do not want to pay imposed tips on cruises.
I think things are changing in Australia for overseas cruises on some lines – our cruise next year ended up with paid gratuities when I checked and it wasn’t part of the original deal?
Why should we the passenger have to make up the wage the cruise line should be paying staff anyway. This is mainly an American thing where workers are underpaid and the customer is expected to tip, to make up the wage their employer should be paying them anyway.
As an Australian we are not required to “tip” to get good service, but we do anyway if it’s exceptional. In West Australia it is NEVER expected for good service or an y service.
We always tip different staff members on the ship for good service, as we know theirs wage are poor.
I guess the price would go up for cruises if the wags went up for staff.
A lot of people have said that the staff are better off than they would be if they were in their home country in a poor village. Maybe they are, but that’s no excuse for a below average wage.
I feel that the gratuities are sufficient, but I have a very worries. If a staff member is with the cruise all the time, but leaves the ship at the end of the cruise the general census from the crew is that they do not get the extra bonus. Also why should the Personal manager who organises the onshore activities get more than the rest of the crew. I cant understand why there is not a set limit of say $400A to be divided amonst all. It would be interesting what the diference is between the captain and the cabin staff get.
Despite what other Australians have said, and being an Australian, we ALWAYS tip the staff, but cancel the automatic gratuities applied. We ALWAYS give tips to those who have given great service, but we recently heard that pressure is brought to bear on staff, especially in the dining room, who receive personal tips, that they should share with their colleagues. We NEVER tip the maitre or supervisor, but ALWAYS the worker. My tip (no pun intended) is to tip a little at the beginning of the cruise, and then on the second last or final night. Get envelopes from Customer Service.
ditto to all of the above comments. The wages of staff should be regulated by a new-ley formed union (marinetime). A uniform satisfactory minimum wage, so the shipping company has to show the wages bills on request to any relevant country authority to ensure there’s no treating staff like 2nd class people(slave labour)..
Cruise companies should not exploit their staff. A fair day’s work for a fair day’s pay
is the mantra of first world countries and has to apply to developing nation’s citizens!
I am sure that cruise companies have the expertise to minimise taxes and stabilise fair profits for shareholders without handouts from their customers.
Most passengers work for a living and save for holidays after paying taxes.
No tax havens available for us workers . . .
Get real – do NOT let cruise companies not pay their valued staff fairly!
I have to agree with the comments above. I have been on numerous cruises and have the gratuities removed at the commencement of the cruise. I then tip cabin stewards at the end of the cruise. I confirm for equality any gratuities should be included in the initial fare.
We are going on our first cruise early next year. I was surprised to hear of the gratuities we are expected tp pay. As a New Zealander we don’t tip. Anyone out there got hints for first timers. We were told by our travel agents we could use the $200 credit to pay gratuities.
I have only withdrawn gratuities once in all my cruising life and that was because the cruise line i went on was total crap and lies and this was all through out the ship. The service was bad and beyond belief. There were only 2 crew members that were deserving a tip which they got but the rest of the crew as far as I was concerned can go whistle Dixie and will never ever travel with that line again .
BUT THE BEST CRUISE SHIP I have ever been on and that was Norwegian Jewel. Fantastic crew, very friendly and the food was very good all throughout the restaurants and you could eat anywhere, anytime, the included drinks were fantastic and I was more than happy to pay the extra tips to the front line staff I had frequent dealings with. I am looking forward to going on a Norwegian Cruise again.
Why is it that the passenger is made out to be the “bad guy” here. What it boils down to is the Cruise liner is paying their staff a lousy wage and they want the passenger to feel guilty for it. I feel sure that the cruise line (whoever they may be) is making a profit from the fare they charge us passengers, so why don’t they pay their staff a reasonable wage. I am happy to tip the staff I have face to face with that go above and beyond, but I would also like to see some equality for the guys down in the engine room etc that I don’t ever see. I am reluctant to give to the ships gratuity fund for concern it isn’t going to the right people. If wages are so low, then put up the fares a “little” and chew into your profits a bit and pay a fair wage (not exploit your staff), but don’t make me feel the bad guy here because you are not paying decent wages to your staff… Aussies don’t like tipping (that is our culture), but at the same time we will tip if it is deserved, but that doesn’t help the staff we don’t have face to face with.
Being from Australia , l also don’t believe in tipping. I have been on 2 cruises, 1 out of Melbourne where there was no tipping and 1 out of the US, which on the first day l cancelled the daily tip added to my cabin account and rewarded the people l felt deserved it. I don’t believe l should prop up their poor wages, the same goes on various coach tours l have been on.
I get charged for a cruise the same way I get charged to stay at a resort.
The conditions of staff is similar.
I am never charged a percentage gratuity at a resort ????
I am a kiwi and do not tip for less than exceptional service. Just good service is a job that should have a wage. If the service is not good the employee should get another job…
So I dont pay gratuities but I am socked in to pay my cabin and dining stewards a tip…even when it is not exceptional because I worry they are underpaid.
By the way why should gratuitys go to bar staff if you dont drink? Etc etc….
Without transparency, cruise lines use gratuities to compensate their crew for poor wages. Pay your workers a fair wage and scrap gratuities. If people still want to tip, then that is their choice.
Do the sums cruise 2 pax 1 room for 12 days say balcony average $5000 plus then deduct food and drinks $120 per day hotel room $200 per day entertainment etc $100 per day average pensioner x2 gets $93 per day This is what the average pensioner couple get in Australia cruise companies should structure in salaries when posting prices for cruises just like any other company or organisation maybe look at less profit and higher returns from more incentives for average passengers.not trying to impress the upper end of the scale by offering hi end food outlets Nuevo cooking and cater more for the majority of passengers needs one does not have to scale back to get better results .just look at the big picture and cater for the majority of passengers .By age Demographics not all passengers are from North America where they structure salaries that in the hope that tipping will top up the income of staff.Top heavy companies these days don’t last long as the general employees now demand equal pay and more benefits .so the profits and returns for investors are lower dividing the wealth and increasing productivity and services and by improving these qualities for the majority of passengers not just the so called upper end passengers . I was fortunate to have a friend who took over a large company we entered the Board room there was 8 people sitting around a large table all were wearing suits and ties we had on jeans and T-shirts the guy sitting at the end of table got up and said to my friend that he was not suitably dressed I said ok take of your jackets and ties roll up your sleeves we are here to do business and we don’t need to impress anyone Never judge a book by its cover .
I agree whole heartedly that tips/ gratuities should be incorporated into the cruise fares. Because We like to know what it is all costing us before we even book a cruise. If we like someone that has done more than we expected, well, yes We would reward them adequately at the end of our Cruise by giving them a tip of some sort..
If the crew isn’t happy with the wages & conditions, then please find other employment that will pay you for your worth.
We get what we pay for & if we’re not happy with it then we won’t come back again… Simple!
It’s the paying passengers that keep the Cruise Lines Afloat.. think about it!!
The gratuities should be included in the cost of the cruise. I understand that individual tipping does not cover all staff so let’s just include it all in the cost and if you wany to tip anybody it is at your own discretion. A passenger shouldn’t feel compelled because it is part of a wage package. To me it is a real downside of a cruise
I always insist that who I reward for going the extra mile has to be my choice. I do not go on a cruise to help the company or manning agency pay an appropriate wage to their employees/contracted personnel. That these cruise companies can avoid the international regulations regarding minimum wages or hours of work is disturbing.
Being an Australian, I do not believe in tipping as such, but I always tip our Room Steward and Dining Staff and any other staff who we consider are worthy of a tip. I do not agree that it should be an added cost per day per passenger. If they wanted to d, this, then it just should be included in the all up cost in the first place, and should not be added onto your account during the cruise.
It might be a sensitive issue for some customers.. but the cruise lines simply will not tell customers ‘where’ the dollars are going. Given that – I refuse to buy into the ‘crap’ which you have stated as ‘Cruise lines say gratuities reward and recognise the men and women who do so much to make cruising special’.
It has become more of a scam/rort for the cruise lines; cheapen out the fares, and then build extra costs, charges etc etc for the cruise. Want a drink ? … well they used to be cheap, exclude various taxes – now, just hike them up, add a gratuity for someone to give you a beer. Someone cleans you room… let’s just charge per person… does 4 people in the same room get the same level of ‘cleanliness’ as two… or one ??
The cruises from Australia build in that ‘cost’ (somehow) and yet why can’t other destinations ? Or do they just not buy into the fact that tipping, once for good service, is just an ongoing scam for not paying the appropriate wages for these employees ?
No they aren’t critical. Consider a situation where everyone refused to pay these ‘tips’ – and then see how the cruise line will deal with it. This practice needs to cease – just build it into the fare… because that it fair to all.
Gratuities should always be included in the fare, not as a separate payment.
I only have been on one cruise, and withheld the gratuities. My reason was failure to fix breakages in the cabin, lousy service at the bars because the gold card holders were pawed over while budget customers were left hanging. Multiple billing problems took 6 of the 14 days of the cruise to resolve, ultimately Miami HO never replied to these issues post cruise despite 4 emails. This liner had a class system that was evident everywhere and that doesn’t go down well with Aussies or Kiwis. I did leave a generous tip handed to 3 exceptional individuals, but I’m not happy to pay the company for service that should be uniform for all passengers that may or may not finish up in the pockets of the staff.