UK hotels adding service charge to room rate

https://www.headforpoints.com/2021/09/13/uk-hotels-adding-service-charges-to-room-rate/

by edward • 5 years ago

57 68 5 years ago

headforpoints.com

adoxyz• 5 years ago

Optional service charge added by default. What a bizzaro world we live in.

AnimalMuppet2• 5 years ago

"You keep using that word. I do not think it means what you think it means." - Inigo Montoya

I mean, maybe if I had the option of not paying it, but somehow I suspect I don't...

vimda• 5 years ago

You do. You can ask for it to be removed. You just have to deal with the staff judging you, and a mandatory interrogation from a manager about why.

jonpurdy• 5 years ago

One of the things I loved about living in Asia (and traveling to Europe) was all-in prices posted everywhere. Made it so much simpler to add up, and was great paying cash due to the even numbers and lack of change.

After moving back to Toronto (and now living in SF), my biggest beef at cafes and restaurants is with the Stripe/Square terminals that force the customer to decide whether to tip or not, requiring the user to interact with the screen. Just let me tap my phone/card and be done with it.

Raise prices 20% or do whatever you have to do so workers can be paid fairly. Don't make the purchasing UX worse by introducing decision fatigue or guilt.

sasaf5• 5 years ago

Yes, I can't understand how making things unpleasant for the costumer will work in the long term.

zwieback• 5 years ago

When I grew up in Germany you had to tell your server to their face when they brought the bill how much you want to tip them. Granted, base price includes reasonable service so tips are smaller but still always seemed unpleasant to me.

Now, living in the US I got used to putting the tip on credit card bill or leaving as cash (rarely any more), which is a bit better since I have more control over the tip amount although I wish servers got better base pay and tips were smaller.

The Square terminal approach actually seems pretty good to me, I feel totally fine leaving a smaller or no tip for counter service or larger for Covid times, etc. Once you get used to the UI it takes 5s to enter custom tip.

jandrewrogers4• 5 years ago

It isn't that simple, this has been tried many times at restaurants in my city. Raising prices 20% and eliminating tipping reduces employee income even though it is nominally revenue neutral because it changes customer spending behavior. Employees don't get paid a 20% service charge for money customers don't spend. The assumption that the customer is not influenced by the structure of the transaction if the final bill would be the same does not hold up empirically. This is not an intuitive outcome, I don't think either restauranteurs or employees expected it when it was first tried, but the result was replicated many times.

Since the market for good employees is competitive, restaurants that replace tipping with a 20% service charge have more difficulty finding and retaining employees. Most of the restaurants that tried this here eventually abandoned it because employees were quite reasonably unhappy about the reduced income.

It is a fascinating example of the structural complexity of even relatively simple economic transactions.

fredophile3• 5 years ago

Has it really been tried? I know individual restaurants have tried it but I can understand customer confusion when one place includes the amount by default but most don't. I think you'd need to do this across a reasonably large geographic area, such as a complete city, to give it a proper test.

gumby2• 5 years ago

How about raising minimum wage for restaurant staff to the same level of everyone else and eliminating tips?

The federal minimum wage for jobs with tips is $2.13 per hour.

chillwaves• 5 years ago

How many people working in a restaurant get tips?

I am sure there are winners and losers, but on the balance, paying a fair wage beats tipping.

geodel• 5 years ago

Raising prices 20% and eliminating tipping reduces employee income even though it is nominally revenue neutral because it changes customer spending behavior. Employees don't get paid a 20% service charge for money customers don't spend.

This seems right thing to me if customer know beforehand the cost of eating out.

I often receive these advertorials in mail about food festivals etc admonishing customers to be generous with restaurant pop-ups to add at least 20% tip and order extra food and drinks so that restaurants make money. It could be just me this thing pisses me off to stand in line for re-heated food and order extra stuff which I do not want for the privilege of not getting called cheapskate or not having someone spit in my food.

Most of the restaurants that tried this here eventually abandoned it because employees were quite reasonably unhappy about the reduced income.

Gouging money from customer that they did not plan to spend does not seem ethical to me. I don't get how employee welfare becomes direct customer's responsibility instead of employers'.

Fnoord2• 5 years ago

A more simple explanation to the problem is that customers, consciously or not, calculate a socially enforced tip within the price. Even during the time this was changed.

I am not against tipping. I am against mandatory tipping. I know a hairdresser which costs me 17 EUR, and I know one which costs me 26,50 EUR. I tip the 17 EUR one 3 EUR, and the other one 0 EUR. Since COVID-19, the 17 EUR one has mandatory hair washing which is IMO bullshit. Now it costs 19 EUR. They get 1 EUR tip. The 26,50 EUR one does not require the mandatory hair washing which makes my preference for the cheaper one (its a slightly longer travel) less my preference.

Anyway, mandatory tipping is part of the final fee and should be processed as such (including taxes). Simple as that. It isn't my responsibility to care about all kind of service fees.

dan-robertson• 5 years ago

When I was last in the U.S. it was reasonably convenient: if the price was $X then after tax and a tip, you would pay around £X.

bin_bash3• 5 years ago

It's funny you used Asia as an example when the article literally starts with:

Anyone who has travelled in Asia or the Middle East will be familiar with the concept of ‘++’ pricing. Any published rate you see for a hotel will come with ‘++’ after the price, meaning that you will also be subject to local taxes and a service charge. These are likely to add at least 20% to the total price.

ohazi• 5 years ago

For the moment, let's ignore the discussion about opt-out vs. opt-in... If the fee is truly discretionary, then you should be able to go to the front desk and ask them to remove the charge, and they should do so without a fuss.

Has anyone tried this? My suspicion is that you either can't actually do this, or that the staff have been instructed to make this difficult. In that case, it would obvious that the fee isn't actually optional, and the regulators should be having a field day.

chrisseaton• 5 years ago

My suspicion is that you either can't actually do this, or that the staff have been instructed to make this difficult.

No I imagine they're extremely polite when you try to remove it - that way that get the charge from most people, and the few who actually care about 5% this way or that way will remove it and if you're polite to them you can try to avoid angering them while still getting it from the people who don't care.

AnimalMuppet2• 5 years ago

If they're smart, you're probably right. That would almost certainly be the best strategy.

The question is, are they smart?

nmstoker• 5 years ago

I've done it occasionally in UK restaurants where the service clearly did not meet the level expected for the overall charge. It's certainly not a regular occurrence but equally it doesn't keep me up at night (it's optional, we don't have a warped view of tipping here and I wouldn't dream of withholding it unless the experience was undeniably poor)

uberman• 5 years ago

I would actually rather pay an optional fee like this baked into my bill than have to leave 5 to 20 bucks cash a day on the night stand for maid service. I hate the USA tipping culture that allow businesses to get thier clients to directly pay their staff. In NYC my wife once made me pay the guy "helping me out of my taxi" $20 bucks

eptcyka2• 5 years ago

Hey, tips are tax-free. I think this is mostly the reason why businesses encourage tipping. I think it's a collective failure of the electorate and the government that you end up in such a situation.

larkost• 5 years ago

Where do you get this idea? In the US there is a line on the income tax form that explicitly asks for how much you earned in tips, and that is explicitly counted into your wages for income tax purposes.

robocat• 5 years ago

Tips are not tax-free in the US nor the UK — you are supposed to declare them and pay the tax yourself.

Sure, individuals often don’t pay tax on their tips, but blaming that on the government seems harsh.

techrat• 5 years ago

Tips are counted as pay, buddy. Legally if hourly rate + tips falls under minimum wage, the employer has to cover the difference. Either way, tips are income and thus taxed as such. No idea why you could ever expect that it's tax free.

dustintrex• 5 years ago

Is it now normal to tip housekeeping $20 per day?! I've been leaving a few bucks per day.

bin_bash3• 5 years ago

People tip housekeeping?! I've probably stayed in a close to a thousand nights in hotels and honestly had no idea this was done.

I have left money on rare occasions when I left a mess that I wasn't able to clean up though.

mikhailt• 5 years ago

One US hotel CEO has publicly said that he wants guests to start tipping on room rates because otherwise he will have to increase wages.

Of course he does, tipping cost them nothing.

Tipping is not supposed to be the norm nor is it supposed to cover people's living wages.

I would be happy to tip for people that go above the line of duty but I shouldn't be tipping every worker for doing their job nor should I be guilt-tripped into doing it, especially since I need the money as well.

Ekaros• 5 years ago

Should I also go and personally give the CEO dollar? I mean that would allow company to lower his wage. I wonder if CEO would be up to this...

Fogest• 5 years ago

Don't the shareholders already kinda "tip" the CEO's in a way? A lot of the time they get performance based bonuses or extra incentives from shareholders.

Except they want to get bigger "tips" from shareholders by exploiting their workers and not paying them fairly so that they get better performance.

elliekelly• 5 years ago

I wonder how tips factor in to CPI and/or cost of living indices? If the average hotel is $100/night but most people start to tip (in order to pay hotel staff a living wage) would a one night stay go into the basket as $100 or $120?

Someone1234• 5 years ago

The problem with allowing stuff like this is that it creates an arms race: If one company can reduce their room rate 5% and shift it to a hidden "charge" then all their competitors MUST do the same to remain competitive. The net result is that nobody is making more than they were before, but customers feel mislead.

So while there a prevailing "regulation is bad" attitude about stuff like this, it really does benefit both the customer AND business if all pricing is listed equivalently up-front. Which is to say: I hope the UK bans this too, and room-rates are again flat (with or without VAT).

hamandcheese• 5 years ago

Or they can stay competitive by normalizing (and very clearly advertising) “all in, no additional fees”. I would certainly notice this, at least.

foobarian• 5 years ago

It's pretty infuriating that this is a thing. Even if you think you might be able to get your users to notice if you went against this grain, you are still asking the product leaders to give up a significant chunk of revenue for a probably very long time. It would take major commitment from the top to pull this off and would not work as some quarterly site improvement project by a rank and file engineer or product manager.

hakfoo• 5 years ago

We had his happen with airline tickets... everything got unbundled so as to show the lowest price on Travelocity or whoever.

I never understood why there was no backlash at the aggregators for disguising the true price of the product (or offering "comparison" of noncomparable products.

A service that accurately shows comparable, out the door prices is more useful than the one that says "$30 cheaper" only to find out after the fact there's $50 in missing services or hidden costs buried in it.

I wonder if there's anyone that accurately does it now: a flight search that lets you say "show me lowest fare inclusive of a checked bag an inflight meal" or "hotel prices including the various undisclosed fees and taxes."

eloff• 5 years ago

This has definately made it much less pleasant to search for and compare flights. Now I have to read through all the fine print for various carriers just to know what the final price will be before I buy. I really wish regulators or travels search platforms would step up here and fix it.

bin_bash3• 5 years ago

with Google Flights you can add a checked bag to the fare. You can also add a carry-on bag which I often do to filter out (some) Basic Economy fares.

macksd• 5 years ago

I'm usually in the "regulation is bad" camp but one thing I find myself saying more and more is that you can't have an ideal market if people are allowed to lie about and hide their prices. It's one of the reasons health care isn't a very good market in the US, and it's one of the reasons people don't like this practice.

Essentially companies are getting away with lying about their prices until after a purchase has been made. In an ideal free market, people can't lie just lie about their prices and get away with it because "everyone does it". So enforcing honesty on this particular point at least would be good of you like free markets.

systemvoltage• 5 years ago

Regulations that improve fairness of competition without any side-effects get my vote even though I generally hold the view that less-regulatory environments are more conducive to innovation and efficiency.

rjh29• 5 years ago

UK hotels are already 50% more expensive than normal due to the post-covid domestic travel boom, on top of being more expensive than most other European countries to begin with. I won't use them unless I absolutely have to.

Cullinet• 5 years ago

and staff shortages supposedly Brexit induced.

in 2019 I met a young eastern European hotel worker who proudly showed me his British passport while telling me how he'd merely recorded six years of entry and exit documents for obtaining nationality despite having spent almost all his adult life in his home country in prison. I discovered this is tip of the iceberg for the failure of visa application and immigration systems in the UK, and I am thinking that post covid rehiring processes of laid off and furloughed staff is exposing significant numbers of unemployables.

edit : because obtaining furlough funds and other assistance is only possible in relation to individuals who have recourse to public funds and new UK nationals don't have automatic recourse to public funds and this will trigger a new hiring process and background check, as I understand it.

sofixa• 5 years ago

I find that hard to believe. In France, you need to show tax returns, a diploma, a work certificate from your employer, etc. to prove you've been in the country and contributing to it somehow. Either the UK bureaucracy is that much worse than the French one, or something smells.

mmarq• 5 years ago

You can apply for naturalisation one year after you are granted indefinite leave to remain. If they had a passport in 2019, this person must have applied for ILR before the EU Settlement Scheme, which started in 2019. So in order to prove they lived in the UK, they must have sent kilograms of payslips (2-3 per year), reference letters, various proofs of address (2-3 per year) and a list of all travels abroad (to prove you haven’t been outside of the UK for more that 6 months), which you can’t do if you are in prison abroad. It took me 2-3 weeks to collect all the documentation, and I never changed address and I only worked for blue chip companies. My partner could not apply for ILR before the settlement scheme because half the companies she worked for went out of business and couldn’t provide reference letters.

He may have been very lucky with his case worker, but this is definitely not the “tip of the iceberg” of anything.

You don’t need to be a British citizen to claim benefits or furlough money or public funds. An ILR or having worked for X months should suffice (assuming you can live in the UK on 150£ per week).

noahmbarr• 5 years ago

Law should be adjusted to say: any “defaulted on” fees should be rolled in.

Huge proponent of “the price you see is the price you pay”.

jb_s• 5 years ago

OT, but does anyone know how Yahoo managed to auto-play videos in Chrome without user interaction? I thought this had been blocked since years ago.

cheradenine_uk• 5 years ago

Why would anyone pay this?

What next, a "cutlery" charge at a restaurant?

scriptease• 5 years ago

A cutlery charge exists in Italy

bsd44• 5 years ago

I understood from the article that only some high-end hotels are doing this. I mean as long as it's optional why pay it? Even if I could afford to spend £500/night for a hotel, why pay some additional optional charge? If they can charge me that much money for a room, they can afford to pay their staff.

foxyv• 5 years ago

I think something that should be blatantly illegal is hidden fees. When I go to buy a car or rent a room and I end up paying 20-80% more because there are a bunch of hidden fees that is just too much. I could understand offering addons, but stuff that is required as part of the sale is just plain unethical. It's bald faced false advertising.

Fnoord2• 5 years ago

The Mafia and other crooks must love the tipping culture (which seemed to be true according to what I heard in E392/E393 of Jordan Harbinger Show [1]) as it allows them both special treatment, easy way of using black money, and a way to avoid taxes. Wouldn't surprise me if they're deep proponents of it.

Its also a race to the bottom: how much BS can I get away with squeezing the customer. "They do it, too" is just an equivalent of "they are getting away with it, too".

You get this kind of crap when there's no regulations or when they are not actively enforced.

[1] https://www.stitcher.com/show/the-jordan-harbinger-show/epis...

UK hotels adding service charge to room rate

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