I think cash is the best. That is just mho though. We did get our stateroom host some candy at one of the ports after he went above and beyond and he acted like he was thankful, so I am going to assume he was not putting on an act and if he was, oh well. We still tipped well at the end. On one cruise, we did just tip the normal for our dining room staff, they were just short of being inept (one of the first Fantasy sailings, some were still learning), but it was not the traditional Disney service we had come to expect, I also don't think the dining room host visited our table even once. So yes, sometimes the prepaid gratuities are enough.
I reward service when it is at least good and hopefully excellent. I am sure, however, that the staff will gladly accept whatever you choose to give them, as any gracious person would. What they choose to do with it at the point it becomes theirs is up to them.
As far as how they are treated by
DCL, I think fairly well, since we have been cruising with Disney for 8 years and some of the staff are still working on the ships. Yes, it can get lonely, but obviously the pay is good enough to compensate for the time away from family and other such issues. Not saying DCL is perfect, but show me an employer that is.
