NCL Extends Mandatory Service Charge

August 6, 2004
Beginning May 2005, Norwegian Cruise Line will be the first cruise line in the industry to charge a non-removable and non-adjustable onboard gratuity on a fleetwide basis. The fee will be dunned from passengers' onboard accounts at the amount of $10 per person, per day. Prior to implementation next spring, all NCL ships will maintain current gratuity policy, which is still priced at $10 per person, per day, but offers passengers the opportunity to alter their tip -- or remove it altogether.

That's with the exception, of course, of NCL's Pride of Aloha which has already embraced the non-refundable, non-adjustable practice. On that ship, which was inaugurated on July 4 and sails all-Hawaii itineraries, the company had originally announced it was charging a hotel-style "resort fee," but has since transitioned that charge to a "service fee."

NCL's proposed new program may be the industry's most controversial, but cruise lines have been moving away from the traditional "final night, cash in the envelope" ceremony for the past few years. Holland America is another cruise line that's made headlines this year for tipping practices as the line, which had long maintained a "no gratuity required" policy, adopted the industry's standard. At this point, most cruise lines are automatically charging tips to passengers' onboard accounts -- the average amount is $10 per person per day (less for children) -- and can be changed at the customer's discretion.

NCL's rationale for the mandatory service charge, says spokeswoman Susan Robison, is that "our carefully designed incentive programs are predicated on all crew having to be team players and being treated equally in compensation as a result. It throws everything out of balance for some crew members to be receiving amounts from some passengers and other crew members not."

Interestingly, the concept of "tips," which originated in England in the 17th century and whose acronym stands for "to insure proper service," is not as popular a concept in Asian countries as it is in Western ones. In fact, in countries ranging from Japan to Singapore, tipping in places like restaurants doesn't generally exist -- patrons pay a mandated service charge instead.