Chances are, if you’ve been on a cruise you would have seen something about a ‘Service Charge’. This is typically charged to your account, and is a set amount charged per person per day. I have had a few questions about what this is and how it works, so I’ll try and answer them here. As a Deck Officer, I never benefited from the Service Charge, however many of my friends and colleagues did!
Why do cruise lines add this ‘Service Charge’?
The daily ‘Service Charge’ is used by cruise lines to make the tipping or gratuity process easier to manage through the entire guest service experience. It is typically paid direct to the eligible crew members, and the company doesn’t take a cut from it at all. The ‘Service Charge’ amount is an important part of the total pay package for many crew members – though they often have a daily guaranteed amount, if every guest pays the daily ‘Service Charge’ the amount the crew actually receive can be significantly higher.
As the service charge is distributed to many crew members who have a part in the guest service experience, it encourages excellent service in all areas. Some cruise lines allow guests to adjust the daily rate or even stop it all together. Of course the goal is to have as many guests as possible maintain or even increase the ‘Service Charge’ rate, in order to maximise the amount paid to each crew member.
Can’t I just tip the crew that serve me?
During your cruise, you may come face-to-face with only ten to fifteen crew members regularly. These would likely include your stateroom steward, your dining room waiters and the bar tender who knows your favourite drink. While these crew members do play an important part in your cruise, they are supported by hundreds of other crew members who each play their part in the shipboard operation. By adding a ‘Service Charge’ that is distributed by the company, crew members through the entire hotel operation can be rewarded for their part in providing you with excellent service.
You are welcome to tip crew members who go above and beyond directly, but check what the policy is on these tips. Some cruise lines require these tips to be reported and added to the ‘Service Charge’ fund anyway, particularly if you have chosen to opt out of the daily rate completely.
Which crew actually get paid the ‘Service Charge’?
This will vary from cruise line to cruise line, but guest relations on board may be able to better answer this on your particular cruise.
Typically the daily charge is only paid out to crew from the Hotel Department – this immediately excludes the Nautical and Technical crew members who maintain the ship side of the operation, fixing break downs and getting the ship safely from port to port.
Many cruise lines also exclude Beverage Service crew from the daily rate, instead adding a percentage to each beverage purchase. This is often somewhere around 10-20%, and will be paid out to either the individual involved in the sale or added to a pool to be divided amongst the beverage department. Similarly, crew members working in the Casino or Salon are often excluded as tips or gratuities are also handled separately.
In general, the crew that do receive part of your daily charge are from the Galley, Dining Room, Housekeeping and Laundry. This means that even though your cabin steward changes your bed linen and towels, the laundry staff that wash and press them are also rewarded. The same applies when you eat in the Dining Room – your waiter gives fast, attentive service however they are supported by the entire team in the galley to make sure your meal is ready for you!
How much do crew members actually receive?
There is a wide spread of pay rates on a cruise ship, and many different ways that crew compensation is calculated. This is partly due to the international nature of cruise line crew, meaning different currencies, exchange rates and tax obligations need to be considered, and also the buying power of each crew member’s currency.
To give you some idea of how the daily ‘Service Charge’ affects crew members, look at the example below. However please note that these figures are not meant to represent the actual pay rates of crew members, and are for illustration only.
For a ship with 2000 guests, you might expect to have 800 crew members on board. Of these, only around 1/3 to 1/2 will be eligible to receive the Service Charge – let’s say 350 crew.
We will assume that the Service Charge is set at $12 per person, per day, for a 7 day cruise.
50% Opt-Out of Service Charge
|Daily Guaranteed Amount||$40 x 7 days||$280.00|
|Daily Service Charge||(1000 guests x $12 x 7 days) / 350 crew||$240.00|
|Total Received per Cruise||$280.00|
100% paying Service Charge
|Daily Guaranteed Amount||$40 x 7 days||$280.00|
|Daily Service Charge||(2000 guests x $12 x 7 days) / 350 crew||$480.00|
|Company Contribution||(DGA)-(DSC)||N/A as DSC > DGA|
|Total Received per Cruise||$480.00|
As you can see, where every guest pays the suggested Daily Service Charge, it benefits crew members directly.
However where guests choose to opt out of the Service Charge, it not only directly impacts the take-home pay of the crew members, but also can cost the company should they need to contribute to make up the Guaranteed Amount. If you have found your service to be poor, this may be exactly what you intended.
Because this Daily Service Charge makes it in both the company and the crew’s best interests to give excellent service to every guest, this is a great way to make sure you have an amazing cruise vacation, and to reward the hard-working crew who make it happen.
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