Royal Caribbean has completed its covid comeback.
The cruise line saw its net income rise from $33 million in the year-ago quarter to $1 billion in the third quarter of 2023.
Royal Caribbean’s RCL numbers were even better than the company expected as they beat the company’s guidance.
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“These results were better than the company’s guidance due to stronger close-in demand and further strength in onboard revenue. The company is also increasing its full-year 2023 Adjusted EPS guidance to $6.58 – $6.63, driven by strong demand and continued strength in onboard revenue,” the company shared in its Q3 earnings release.
To put things simply, Royal Caribbean has been able to charge higher prices for cruise fares. It has also been able to raise prices on add-ons like specialty dining, drink packages, WiFi, and special offerings like its escape rooms while also selling more of all of those.
Prices for the Royal Beach Club at Coco Cay keep pushing higher as does the cost for cabanas or other add-ons. Future bookings suggest that won’t slow down anytime soon, so if people want to cruise, they can generally expect to pay more.
Royal Caribbean’s customers do complain on social media about the higher prices, but most people seem to understand that higher demand equals rising prices. Where passengers and fans of the brand have been less understanding is when it comes to how passengers subsidize some crew members’ wages through daily tips automatically charged to each passenger.
Royal Caribbean has raised the daily gratuity fees again and that’s not sitting well with some of the brand’s customers. That move comes about a year after the previous increase.
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Royal Caribbean’s tip pool includes room stewards, waiters, and some people you don’t see like the workers who wash linens and towels.
Image source: Daniel Kline/TheStreet
Royal Caribbean raises daily gratuities
Every Royal Caribbean passenger gets charged a daily gratuity which gets added to their bill each day. You can opt to pre-pay your gratuities or you can modify them onboard, or even remove them.
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The gratuities go to workers including your room steward, main dining room waiters, and some service workers who are not passenger-facing. This tip pool is a part of how those workers are paid and the cost is going up once again, according to an email the cruise line sent to upcoming passengers.
As you prepare to set sail, we wanted to notify you of an update to our daily gratuity charges. As of November 11th, 2023, the automatic daily gratuity charge will increase from $16 to $18 per guest, per day for non-suite staterooms and from $18.50 to $20.50 per guest, per day for suites. The daily gratuity is shared among dining, bar & culinary services staff, stateroom attendants, and other hotel services teams.
That’s a relatively small increase that’s similar to what the company’s Celebrity Cruises brand did with its gratuities. Royal Caribbean passengers, however, seemed pretty fed up with the change and talked about it on the various Facebook groups devoted to the company.
Royal Caribbean customers are angry
The general argument is not about the increase, but about how Royal Caribbean pays its workers. Posters in a group devoted to fans of Royal Caribbean’s Casino Royale — a group that is not public so posts cannot be shared — seemed to overwhelmingly suggest that the cruise line should pay its workers more, not pass that on to customers.
“I don’t care about the $2, it’s the overall principle,” was a sentiment shared in multiple posts.
“They made a net income of over a billion dollars last quarter, but their staff still have to rely on tips to make a decent wage? And instead of giving them even a small increase, they want their customers to subsidize their incomes further? I’m all for tipping for good service but making their staff rely on tips is sad,” wrote Julie Oag on the Royal Caribbean Blog’s Facebook page.
“Hmmmmmm RCCL had a huge profit this year and the cruise industry is making record profits as a whole seems to me that they need to pass that along to their employees instead of putting more on us. I am all about tipping I even give more if it’s warranted but that may stop,” Betty Marie Lumbert shared on the same page.
Both posts were representative of the overall empathy with the crew members, but questioning why the cruise line could not simply increase wages without passing that burden onto customers.
