new mandatory tip policy creates storm for NCL

[Jason]

A story last Sunday about Norwegian Cruise Line's new policy of adding a mandatory, nonrefundable service charge to passengers' shipboard accounts stirred up quite a tempest, and the storm has yet to pass.

In an unusual move, NCL late last week acknowledged service problems aboard its newest ship, Pride of Aloha, and agreed to compensate passengers. While stopping short of rescinding the controversial $10 per-person, per-day assessment, the line said it would reimburse half the fee charged to everyone who has sailed the refurbished vessel since it began cruising in the Hawaiian Islands in July. In addition, passengers will get a credit, equal to 20 percent of their Pride of Aloha fare, good toward a future NCL cruise.

The gesture is almost unprecedented among cruise lines, which seldom issue blanket apologies or credits to dissatisfied customers. But the remedy doesn't go far toward assuaging the displeasure of passengers who were deeply disappointed by their experience aboard the first major cruise ship to fly the Stars and Stripes in more than half a century. And it doesn't answer the question of when a tip is a tip, or just who gets what when a lump sum paid at the purser's office is involved.

Norwegian and other lines have assessed an automatic gratuity for several years, but it's always been voluntary and adjustable at the passenger's discretion.

Given the option, Pride of Aloha passenger Al Himenes of Sacramento might well have adjusted the amount down. He found service aboard the American-crewed vessel fell far short of expectations - and yet apparently ended up tipping twice for it, to the tune of $20 per person per day.

Himenes and 20 members of his extended family booked their Pride of Aloha cruise in October, at which time they agreed to prepay a daily gratuity to the crew of $10 per adult, $5 per child. The charge, totaling "about $1,200 or so," was added to their bill; final payment on the $28,000 tab was made in May for the cruise departing July 18, Himenes said.

Then, shortly before departure, the family's travel agent advised the group that another $140 per cabin would be added to their onboard account as a service charge covering unexplained costs.

The Himenes clan figured that since they'd already prepaid a gratuity, or a service charge, or whatever the line wanted to call it, they'd easily be able to straighten out the misunderstanding.

Little did they know.

The first sign that all was not right aboard the 2,000-passenger ship came on Day 1, when family members had to wait until 11 p.m. to be admitted to their staterooms because of housekeeping delays. (Normally, cabins are ready for passengers upon boarding.)

Things went downhill from there, Himenes said, citing a litany of unmade beds, three-hour waits for dinner, dirty tables in the cafeteria, food shortages, bars that closed at 10:30 p.m. - and breakfasts served on paper plates.

"We didn't pay all this money to eat off paper plates," he says.

The ship obviously was short-staffed, he said, and the young American crew members appeared "so exhausted they were like zombies. ... There were no smiles, no 'good mornings,' just long faces."

Adding insult to injury, when the Himenes clan went to settle the bill at the end of the cruise, there it was: a daily service charge of $10 per adult, $5 per child, due immediately - along with an unexpected $5 per person mandatory donation to the Bishop Museum in Honolulu.

"We got double billed, no two ways about it," Himenes says. "There was no remorse, no apology, and nobody onboard had any authority to refund anything back to us."

Himenes said family members were told by the disgruntled crew that the service charge was established to pay for benefits and did not go into a tip pool.

NCL has not addressed the benefits charge but said in a statement to the press that it acknowledges and apologizes for "start-up challenges that have affected some of Pride of Aloha's guests." The company said it is taking "aggressive actions to address specific issues" on the ship.

The Los Angeles travel agent who booked the Himenes family's cruise asked not to be identified in this column. But she confirms the "miseries" the passengers encountered, and she is following up on the party's plight.

"NCL ruined their experience, so do you really think they are about to use the credit extended them to rebook with NCL? Not in my lifetime," she said.

What's clear from all this is that NCL is taking a lot of heat for what amounts to a back-door price hike. And while an American-crewed ship might sound like a commendable endeavor, it's a risky one. Several previous ventures in Hawaii have failed in the wake of labor issues and complaints about American workers who don't cotton to the long hours a cruise-ship job entails.

A job at sea may sound glamorous, but when it comes down to it, changing sheets in an ocean-going hotel isn't so different from changing sheets in a land-based one - except you can't go home at night.

NCL isn't giving up. The line says it is committed to "delivering a high-quality and unique vacation experience in Hawaii" and expects the "experience aboard Pride of Aloha will be very quickly up to the company's high standards."

It remains to be seen how the mandatory service charge will play out on NCL's 12 other ships: The line apparently isn't waiting until its stated timetable of summer 2005 to impose the charge fleetwide.

Earl Worley of Sacramento has already received his documents for an October cruise out of Baltimore aboard NCL's Norwegian Crown. He learned about the charge ("For your convenience, NCL now automatically applies a service charge to your shipboard account ...") at the bottom of page 10 of the "Welcome Aboard" booklet enclosed with his ticket.

"I was taken aback by it, because I had paid the full price of the fare already and didn't think there was any basis for charging extra," he says.

The cruise booklet takes a decidedly vague stance in describing where the passengers' $10 a day goes. "All of the service personnel onboard receive gratuities from this service charge, and there is no need for you to think about additional tipping," it reads.

The next sentence: "Separately, a 15 percent gratuity is included in bar tabs and spa services."

Worley said he has written the cruise line's president suggesting a change in the policy. You can bet he's not the only one.

Source: By Janet Fullwood -- Bee Columnist

Published 2:15 am PDT Sunday, August 29, 2004

[hazelson]

Gosh - we have actually looked into this itinerary - guess it's a definite no-go now. Thanks for posting this stuff jason. It really pays to be in the "know". TTFN Jennifer

[JohnG]

The mandatory service charge is no more than the gratuity charged by other lines to the account, and they, too, still charge 15 per cent on bar bills. The only difference is that this NCL "service charge" can not be adjusted by the traveler. It is fixed. NCL says they want you to express your dissatisfaction to them onboard so that they can fix the problem, not cut the funds being channeled to the staff.

It is fairly widely accepted than it isn't wise to book ANY ship for the first six months it is in service till they get the kinks worked out. In the case of the Pride of Aloha and the 80 per cent American crew, there are a lot of kinks, more than normal. NCL has admitted that.

[jbond]

Sorry John, but I have to disagree. It is different because it is not a gratuity, it's an added fee. NCL is not including it in the fare for several reasons. They want you to believe that it is a gratuity and secondly, they don't have to pay a TA commission on it. With 2000 passengers at $10 a day, that adds up to $140,000 per week. In a year, that is a cool $7,000,000. NCL has the TA commission staying in their pockets and it amounts to around $1M annually. Pretty sneaky all round.

NCL knew about all these problems before they entered into the hair brained scheme. US citizens working on a US flagged ship out of Hawaii are subject to US income taxes etc. There must have been a red flag raised that the staff would have to be compensated a little better. If the non-US staff stay more than 182 days on their contract, they too become eligible to pay income tax, SS, etc.

What will NCL's next move be? Raise the prices so that they can hire sufficient, competent staff and then complain to the US government to impose charges on the other lines sailing Hawaii to "level the playing field"?

I have no pity for NCL, they made their bed, now they can lie in it. Instead of petitioning to change the Jones Act, they tried to pull a fast one and get a leg up on the competition. I believe that before this is over, NCL will abandon their endevour and return to the itinerary that includes Fanning Island.