Tipping customs in Indonesia, Bali, Wakatobi?

[runsongas]

Last year, a customer gave a wonderful tip of $50,000IRD. I asked about their generous tip of $3.35. They told me that life was so simple for Indonesians - catching fish, living in small huts, etc. The cost of a new scooter or boat engine was not that different in Indonesia than in the USA, so perhaps life is not that simple in remote Indonesia.

did you tell him the 1800s wanted its racism back?

 

[Luko]

why should the minimum wage matter? would you be happy if your job paid you only minimum wage?

The question i am asking if you read me is : what are the liveaboard paying their staff given they're asking you 400USD per day + and expecting 300USD tip?
i'm also highlighting the fact that the tip is more than the minimum wage in Indonesia,hence probably more than what the Liveaboards are paying their staff.

You are talking about racism in your next post about people not giving a tip, I am surprized you forgot the most racist people in the 1800's were the slave owners not paying their workers..

 

[runsongas]

sure the liveaboards could pay their staff more, but why would they if they don't have to? they are businesses not charities. it really doesn't matter if the tip is more or less than the minimum wage, are you going to argue that 700 usd a month means liveaboard crew are overpaid?

the racism is to think that indonesians should be happy to live a less developed existence (eg subsistence farming/gathering and living in huts) and get by with a meager income. how dare they expect a higher income and standard of living from modernization and industrialization?

 

[Wisnu]

In general, tipping in the term used by "western" culture (or other - note I live in Egypt for the last four years) is not something that is compulsory or mandatory in Indonesia. However, traditionally in Indonesia also recognize the culture of "tipping" which is often packaged in the form of gifts, gratuity for appreciation of excellent service or expectation to get more services, which in this case is often close to bribery.
The tourism industry has been changing the behavior or probably tipping culture in Indonesia, from being tipping was an appreciation, expectation, then compulsory on some industry where they have the opportunity to make it compulsory..
I was not surprised when this tipping culture is now expanding to another area; even though I wasn't surprised when someone was so shocked when he got a tip for his good job..

Minimum wage is another thing that is not directly related to the tipping culture. Often those who receive wages below the minimum wage do not expect or do not have the opportunity to receive tip; on the other hand those who earn a good income still hope or even require tipping; as usual the industry environment, market conditions / demand will dictate more.

Personally, my tipping rule is no rule, solely up to me though I also consider the typical condition; I will tip if I'm happy or in good mood or for another reason case by case. No minimum amount and no maximum limitation. Can be nothing at all, or significant amount of money plus my BCD, wetsuit or even camera.

 

[paolobl65]

Personally, my tipping rule is no rule, solely up to me though I also consider the typical condition; I will tip if I'm happy or in good mood or for another reason case by case. No minimum amount and no maximum limitation. Can be nothing at all, or significant amount of money plus my BCD, wetsuit or even camera.

I agree 100% and also my way .

 

[Luko]

sure the liveaboards could pay their staff more, but why would they if they don't have to? they are businesses not charities. it really doesn't matter if the tip is more or less than the minimum wage, are you going to argue that 700 usd a month means liveaboard crew are overpaid?

Looks like we're not on the same page AT ALL.
Firstly, you don't manage a business by not paying your employees, Like a famous entrepreneur said, "if you think good employees cost you too much, try the bad ones".
All I'm saying is that the recognition of the work should be a little more on the employer side given some seem to be doing well in this business (just look at the number of Liveaboards launched every year in Indo).

The minimum wage is an illustration of the share between wages/profit in this industry, it also works for people who have not the slightest idea of the level of income in Indonesia (FYI there are not many people earning 700USD/month in Indonesia) : as a customer, you pay a high price for the liveaboards, what I'm showing here is that a diver paying one day on a liveaboard allows to pay two staff for a month at minimum wage, let's say the company is a tad more generous than that and consequently the first day of the liveaboard pays for the whole crew.
On that basis 90% of the rest of the income goes to the owners paying the gasoline, the ship investment and their villa with a splendid pool in Bali. FWIW the normal cost % of salary expenses to the general income is around 25% in most of the service industries like tourism. (say 20-30% to be fair although in the hospitality industry it can reach up to 50%, mind you).
On such liveaboard making 2 trips per month there should be more than10kUSD/month spent on wages if we take a 20% ratio, that is monthly 1000USD/staff on average which in Indonesia is huge, equivalent or more to any professor.
But no... some liveaboard companies still think it's on the customer to pay additionnally for the crew (in fact, you didn't know you were booking a boat with no crew), again I'm recalling the minimum wage to serve as a comparison on who's ACTUALLY paying the crew.

the racism is to think that indonesians should be happy to live a less developed existence (eg subsistence farming/gathering and living in huts) and get by with a meager income. how dare they expect a higher income and standard of living from modernization and industrialization?

Who said that? Where? Are you interpreting? Quite funny that racism lecture coming from the US, where employees are not paid or are supposed to pay for building a wall that will exclude them ...

As an answer, for your last question, what do you think about:asking their employers to pay them accordingly. What is certain is that if the staff relies more on your tip than on the employers income, you're either not encouraging the owners to pay them fairly or you are creating vocations of sailors rather than professors.
Not sure that's all for the benefit of Indonesia in either way.

 

[WetInPortland]

Thanks to all for the variety of opinions. Things did get a little off the rails from time to time, but not at badly as I feared. The one area where I didn't see many comments was regarding tips for hospitality staff (land-based). For hotels and resorts, what are the customs?

I plan to get IDR from the aiprort ATM. Wakatobi states that they accept all currencies, but for the individual operators, I now have some ideas as to what is a reasonable IDR range.

That means I will probably have IDR left over, so is there a Starbucks in the DPS airport? Reloading one's Starbucks card as one is leaving the country is a suggestion I've seen to avoid the generally bad rates at the exchange desks. Is it appropriate/would it be helpful to offer to buy dollars from staff for IDR at a fair rate?

@Luko - you said you generally tip around 100K IDR per day - how many dives is that?

@charlier - while crew work may require more physical effort, I'm counting on the guide to know the local waters and dive conditions, and to help keep me safe, so I'm not certain I agree that the crew is necessarily more deserving.

@Wisnu 's suggestion of leaving gear behind as a tip hadn't occurred to me. Are there any other small western items that one could bring for gifts that would be appreciated?

The difference in expectations for Europeans / Canadians / American's is somehow sadly humorous (no one mentioned the Aussies / Kiwis?). While I am a USA citizen, it will be interesting to see if there's any reaction when they ask where I'm from and I tell them, "Mexico".

My own opinion is that tips are for the people that I'm interacting with directly. I've been to resorts where the tip pool included people like the gardener and the engineering staff, and I won't tip to that pool - I'll tip individuals separately.

With respect to wages versus tips, there's the law of supply and demand for labor, and there is clearly a lot more labor supply than demand. Legislative laws attempt to interject a morality and overrule the law of supply and demand for of what should be considered a reasonable or basic or "human right to not live in poverty" wage. The moral compass of some business owners may motivate them to pay employees more, but they have to be competitive in the marketplace. Unless a government sets absolute prices and wages, things will, by and large, roughly approximate what the law of supply and demand dictates. All the legislative efforts have unintended consequences (and some big ones, at that). So while we lament that it's an imperfect system, tipping isn't likely to go away time soon.

 

[runsongas]

Looks like we're not on the same page AT ALL.
Firstly, you don't manage a business by not paying your employees, Like a famous entrepreneur said, "if you think good employees cost you too much, try the bad ones".
All I'm saying is that the recognition of the work should be a little more on the employer side given some seem to be doing well in this business (just look at the number of Liveaboards launched every year in Indo).

The minimum wage is an illustration of the share between wages/profit in this industry, it also works for people who have not the slightest idea of the level of income in Indonesia (FYI there are not many people earning 700USD/month in Indonesia) : as a customer, you pay a high price for the liveaboards, what I'm showing here is that a diver paying one day on a liveaboard allows to pay two staff for a month at minimum wage, let's say the company is a tad more generous than that and consequently the first day of the liveaboard pays for the whole crew.
On that basis 90% of the rest of the income goes to the owners paying the gasoline, the ship investment and their villa with a splendid pool in Bali. FWIW the normal cost % of salary expenses to the general income is around 25% in most of the service industries like tourism. (say 20-30% to be fair although in the hospitality industry it can reach up to 50%, mind you).
On such liveaboard making 2 trips per month there should be more than10kUSD/month spent on wages if we take a 20% ratio, that is monthly 1000USD/staff on average which in Indonesia is huge, equivalent or more to any professor.
But no... some liveaboard companies still think it's on the customer to pay additionnally for the crew (in fact, you didn't know you were booking a boat with no crew), again I'm recalling the minimum wage to serve as a comparison on who's ACTUALLY paying the crew.



Who said that? Where? Are you interpreting? Quite funny that racism lecture coming from the US, where employees are not paid or are supposed to pay for building a wall that will exclude them ...

As an answer, for your last question, what do you think about:asking their employers to pay them accordingly. What is certain is that if the staff relies more on your tip than on the employers income, you're either not encouraging the owners to pay them fairly or you are creating vocations of sailors rather than professors.
Not sure that's all for the benefit of Indonesia in either way.

You are ignoring the option where the crew are paid fairly by local standards and the tip is what makes working on the liveaboard desirable.

Doesn't matter if that makes the pay higher than a teacher in Indonesia, that is capitalism.

You are right we aren't on the same page. Because you are complaining that the liveaboards don't pay enough on one hand such that the crew expect tips and then that the tips make the pay too generous such that it is more than other more "Noble" professions. Can't have it both ways. Just admit you would like rock bottom prices without having to tip by having the crew only making local minimum wage.

 

[charlier]

@Luko - you said you generally tip around 100K IDR per day - how many dives is that?

Here, Luke and I disagree. A 100K IDR per day or $6.50 seems a bit low. After spending thousands of dollars on a dive trip, tipping a dive guide $6.50/day is inappropriate, at least to me.

@charlier - while crew work may require more physical effort, I'm counting on the guide to know the local waters and dive conditions, and to help keep me safe, so I'm not certain I agree that the crew is necessarily more deserving.

I keep my divers safe and show them the “goods”, but the crew works way harder and adds a lot to the overall experience. I understand that I am a western, but I am given a personal tip, I always suggest that the tip unto the group kitty. A beer or cocktail is always appreciated for sure.

@Wisnu 's suggestion of leaving gear behind as a tip hadn't occurred to me. Are there any other small western items that one could bring for gifts that would be appreciated?

I have left dive gear or more frequently arrived with new gear for my guiding friends. Please do not not leave junky or super tattered gear.

 

[Luko]

That means I will probably have IDR left over, so is there a Starbucks in the DPS airport? Reloading one's Starbucks card as one is leaving the country is a suggestion I've seen to avoid the generally bad rates at the exchange desks. Is it appropriate/would it be helpful to offer to buy dollars from staff for IDR at a fair rate?

@Luko - you said you generally tip around 100K IDR per day - how many dives is that?

Thanks to a competitive market (we'll about what is a competitive market later on) the rate offered by money changers vary very slightly between the airport change offices and Ubud money changers (where you get the best rates) I've only seen something like a 2% difference, this is really marginal when you're talking about a hundred USD (I usually change 1500 to 2000EUR overall when going to the remoter parts of Indonesia, -watch out for credit card fees that add up to your bank fees, etc-) .

A day diving is generally for me 3 dives, but it can be 2 or 4 as well.

The difference in expectations for Europeans / Canadians / American's is somehow sadly humorous (no one mentioned the Aussies / Kiwis?). .

The Ozzies and the Kiwis are even more radical than europeans on that aspect. they are probably even worst tippers.
Reminds me about a german diver I met in PNG : he told me he dived with 2 liveaboards plying PNG waters. A US owned and an australian owned, it was the same level of comfort and diving but the only difference was that you had to pay a 15% tip at the end on one of the boats while on the ozzie boat the customer departure was only "ta' mates, see ya". His conclusion was he would go back on the australian one for his third trip.

With respect to wages versus tips, there's the law of supply and demand for labor, and there is clearly a lot more labor supply than demand. ...
Unless a government sets absolute prices and wages, things will, by and large, roughly approximate what the law of supply and demand dictates.

I do not agree with your statements, it's getting a bit technical but you're applying market generalities like for instance Indonesia had pure and perfect information on their labor market. I would be very surprized if that was the case. You could be right there was only one scheme, but the debate here shows there is not.
Talk a little with the dive centers or the liveaboards in Indonesia, you might see it's not the case : how would you explain then there are US minded boats encouraging high tipping while some european dive centers/boats do not. If your explanation was right, there would not be such difference in terms of customer behavior. In fact the labor market seems to me very segmented and more driven by the offer/customer segment than the labor demand itself.

Another factor should be taken into account, I read a multicultural business management study that assumed the relationship between the employee and the manager are different in Indonesia than in say in the US, . (And why shouldn't they be : Indonesian sailors are not north american white collars.).
According to these studies there's almost a family bond : the employee agrees to work loyally for his manager providing he's willing to take care of him, support him in front of others, etc.This might sound a bit paternalistic but it reminds me of the japanese culture too where a firm will never fire one of his employee. (try to give a japanse or korean worker a tip and you'll see what's his reaction)
Hence I would not think sending the message "work for me for peanuts and go find your tip by yourself, I don''t wanna know" is something deep rooted into indonesian culture.

In this case "the law of supply and demand" is a just nice story to hide a rent situation and also, I'll say the word : exploitation.

All the legislative efforts have unintended consequences (and some big ones, at that). So while we lament that it's an imperfect system, tipping isn't likely to go away time soon.

I will agree with you with the imperfect word applied to the economy itself , hence there is an imbalance in this market.