While it’s customary for guests, especially on charter yachts, to leave a gratuity for the crew, you shouldn’t expect to walk away with “stacks of cash” after every trip.
The custom of guests leaving a tip for the crew at the end of their yacht vacation has become so ingrained in the industry that most crew working aboard charter yachts expect to be rewarded for their efforts with a pile of money on top of their salaries.
“I’ve had charters where we’re anchored in the BVIs, the guests had left, we’re eating leftover lobster, drinking leftover Champagne…counting our stacks of cash,” Chief Stewardess Kate Chastain of Below Deck told ET during an interview. “I felt pretty special at that moment.”
The reality isn’t always so rosy, however. There are a number of factors that play into the amount crew receive as a gratuity — if the guests leave anything at all.
New crew may not understand that gratuity is entirely up to the charter client, and tips are earned rather than being mandatory. The current MYBA Charter Agreement template, widely used in the Med and Caribbean, has sections devoted to financial matters like the charter fee, VAT (if applicable), APA, security deposit, and broker’s fee, but not to the gratuity.
New crew may not understand that gratuity is entirely up to the charter client, and tips are earned rather than being mandatory.
There is a “Special Conditions” section at the start of the MYBA Agreement where the charter manager may write in stipulations for the charter such as “no smoking except in designated areas,” “no pets,” and “children must be supervised by an adult charter guest or nanny at all times.” It’s also common for him or her to include a clause related to tipping in this section, stating: “Gratuities are left solely at the charterers’ discretion…,” and providing guidelines as to the percentage of the yacht’s gross charter fee customary for clients to leave as a tip (usually given as a range). The gratuity clause is only a suggestion, however, not a binding part of the contract.
“I sometimes have crew who get upset when they do not get a certain amount [for a tip],” says Capt. Jason Halvorsen of the 141-foot expedition yacht M/Y Marcato. “I tell the crew that if you made a dollar, then you did okay — anything above that is great.”
The good news is that yachts typically don’t reduce their employees’ salaries by what they expect the employee to make in gratuities. “We do not take charter tips into consideration,” Capt. Halvorsen says. “I pay all my crew based on an industry standard, and if you get tips, it’s over and above that.”
Yacht Crew Placement Manager Jill Maderia of Denison Yachting in Fort Lauderdale adds, “It’s always beneficial to ask if there are charters booked and how many have been confirmed when placing crew on board. It gives crew a good idea how the season may go and if it will be busy or will it be a mix of owner vs. charter trips.”
No Standard Percentage
“[The average charter tip] can range depending on the yacht, the charter broker, and the crew,” says Katie Macpherson, a charter consultant with IYC in Palm Beach, Florida. In many cases, especially with first-time clients, it’s left up to the broker who books the trip to educate the client about charter etiquette, including tipping practices. One captain said not all charter brokers do a good job of this, however. “Not usually, NO…,” he says. “Only the really better ones and they are far and few between.”
In many cases, especially with first-time clients, it’s left up to the broker who books the trip to educate the client about charter etiquette, including tipping practices.
MYBA does provide charter guidelines for captains and brokers, which state: “…. Brokers generally suggest to charterers that a gratuity calculated between five percent and fifteen percent of the contracted gross charter fee only is appropriate if the crew has given excellent service. However, it is important to understand that a charterer is under no obligation to leave a gratuity and at no time should a gratuity be solicited, either verbally or in written form, when settling the final account.”
Based on her experience, Maderia quotes a slightly higher percentage: “Charter managers and brokers encourage clients to tip fifteen percent to twenty percent, though tipping can vary in different countries and what might be customary [to their] culture.”
Nicci Perides of Burgess in London quotes her firm’s charter team as saying it’s not uncommon for clients to leave crew gratuities of less than 10 percent of the charter rate. “It doesn’t necessarily mean anything was wrong [with the charter]; tipping might not be in their culture,” she says.
“Some cultures are not used to tipping,” Capt. Halvorsen agrees, adding, “Americans are used to it, and eighty-five percent of our charters have had American clientele.” While U.S. citizens typically tip in the 15- to 20-percent range, the customary range for Europeans is around 10 to 15 percent. According to the Travel Channel, 10 to 15 percent also is the customary range for gratuities in the Middle East. Japan, however, has a “no-tipping” culture where some people feel that leaving a gratuity actually is rude.
While U.S. citizens typically tip in the 15- to 20-percent range, the customary range for Europeans is around 10 to 15 percent.
Private vs. Charter Crew
Private yacht owners often want to acknowledge crew financially for exceptional service, but this can be a slippery slope. “A lot of owners ask me for advice on how that works, especially if they are new,” says Michael Reardon, president and owner of Reardon Yacht Consulting. “It’s much appreciated [by the crew], but then does it become an expected entitlement? It’s supposed to be a reward for going above and beyond.” Reardon adds that some owners will treat their crew to an annual dinner at a memorable upscale restaurant rather than handing out cash tips.
If the owner’s private guests tip the crew, it can also be a difficult issue, since it can place the owner and his guests in an awkward position regarding hospitality and obligation. “My boss says no gratuities [from his friends], but they can give a ‘gift,’ like a couple of hundred bucks,” Capt. Halvorsen says. “Sometimes we appreciate it a little more, even if it’s less money because we weren’t expecting it.”
Splitting the Tip
Although some crew, like the chief stew, chef, and deckhands who work with the tenders and toys, may play a larger role in entertaining the guests, charter captains say those crew shouldn’t expect to get bigger tips than other crew who are seen less frequently by the guests. “All gratuities are divided equally between all crew. Everyone plays an important role in the success of a charter,” says Capt. Bob Corcoran, master of the 252-foot Devonport M/Y Samar. He adds that this practice helps to prevent conflict on board. “Keeping all equal has been a good policy,” he says.
“Everyone gets the exact same amount of money,” Capt. Halvorsen agrees. “Maybe [the guests] don’t see the engineer the whole time because he was below keeping the toilets running or the A/C on….” He adds, “If [the tip amount] doesn’t come out evenly, I will bump the crew up to an even number and take the shortage myself.”
“All gratuities are divided equally between all crew. Everyone plays an important role in the success of a charter,” says Capt. Bob Corcoran, master of the 252-foot Devonport M/Y Samar.
Brokers usually recommend their clients give the captain an envelope with the entire crew gratuity, in cash, at the end of the trip and let them distribute it. According to the Burgess charter team, “[Clients] generally follow these guidelines, giving the tip to the captain and allowing him to manage it,” Perides says.
That doesn’t mean the clients take their broker’s advice, however. Some will persist in singling out the captain or another crewmember for an extra bonus. “I had clients once give me envelopes for everyone,” Capt. Halvorsen says. “I asked the crew, can we just split it, and they agreed. No one had even opened their envelope yet.”
Bigger Boats, Bigger Tips?
Crew working their way up to larger yachts usually can expect a pay raise, but it doesn’t always follow that they will receive bigger tips as well. “The bigger the boat doesn’t necessarily mean you’re going to get more money,” Capt. Halvorsen says. “As I’ve grown into bigger and bigger boats, the charter rates go up and the [tip] percentage goes up, but you are splitting it with more crew.” For example, if a superyacht that commands a $300,000-per-week charter rate has 15 crew on board, a 10 percent gratuity of $30,000 nets out to $2,000 per crewmember. A four-person crew on an $80,000-per-week yacht could get exactly the same tip.
Capt. Halvorsen adds that gratuities are only paid as a percentage of the charter rate, not on the APA. “If you are on a boat that burns more fuel, that doesn’t mean you need to tip better,” he says.
Tipping & Taxes
The industry veterans recommend that yacht crew include tips with their salaried compensation when they file their annual taxes. Due to the international nature of the industry, however, with crew hailing from all over the globe, most captains and yacht managers are forced to leave it to the crew to self-police on this issue. “That is up to the individual crewmember,” Capt. Corcoran says.
The Right Attitude
USA Today recently published a story citing a growing “do-not-tip” movement. “Travelers say the ever-present tip jars and outstretched hands leave them confused and frustrated,” it read in part. “Gradually, consumers are easing up on gratuities — and businesses are moving away from compensating staff with tips.”
“I never tell the crew what they get until the charter clients [leave],” he says. “I want the crew to behave the exact same way until the guests are gone.”
Reardon says he also has witnessed a change in attitude toward tipping in the industry over the years. While chartering a yacht generally comes with fewer headaches than owning one, he recalls that an owner recently told him: “When you charter, it’s fun; it’s for a limited time…[but] there is a sense throughout that no matter how good a job [the crew] do, they are only doing it for a tip.”
Halvorsen recommends captains wait until all the guests have left before dividing up the gratuity amongst the crew, so the amount they receive won’t influence them, consciously or unconsciously. “I never tell the crew what they get until the charter clients [leave],” he says. “I want the crew to behave the exact same way until the guests are gone.”
Capt. Corcoran agrees. “Always stress that it is a ‘gratuity’ and therefore should not affect the level of service.”
This article originally ran in the February 2021 issue of Dockwalk.