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A disturbing new trend? UK hotels adding a service charge to your room rate

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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.

This sort of pricing is illegal in the UK. Hotel pricing – and indeed airline pricing – must show all compulsory charges as part of the headline rate.

Up to a few years ago, IHG tried to get away with showing ex-VAT pricing for some London hotels on the grounds that ‘all of our guests are business travellers’. (You are allowed to show ex-VAT pricing if your advertising is aimed at the B2B market.) They don’t do this any longer.

Similarly, Trump Turnberry in Scotland had a short-lived compulsory ‘resort fee’ which was not shown in advertised pricing. This was soon stamped out.

A new enemy is now emerging in the UK, however – the ‘optional’ service charge on your room rate.

A reader recently stayed at Rudding Park near Harrogate. When he checked out, he was surprised to see a new ‘optional service charge’ of 3% of his room charge on his bill. This is separate to the service charge added to restaurant and bar bills in the hotel.

Because the charge is ‘optional’, it does not need to disclosed as part of advertised prices. It is shown in small print as part of the Rudding Park booking process.

Generously, the hotel website states that you should still feel free to leave a cash tip as well at check-out if you wish.

When our reader challenged the hotel about this, it said that ‘all the posh hotels in London are doing it’ and specifically referenced the Mandarin Oriental and The Connaught.

What this has to do with a provincial hotel in Harrogate is a different question, but it was correct. It turns out that the Mandarin Oriental in Knightsbridge now says:

“Rates are per night and inclusive of VAT at the prevailing rate and subject to 5% discretionary service charge.“

Over at The Connaught in Mayfair, the £618 rate for a standard room on a random day in November comes with (if you click the letter ‘i’ next to the rate):

“Rates exclude discretionary service charge at 5 percent“

The brand new The NoMad London hotel in Covent Garden has also got in on the act:

“A discretionary 5% accommodation service charge will be added to your bill which is distributed amongst staff.”

To find this line during the booking process, you need to click the link which appears when you are asked to tick “I agree with the Booking Conditions” and scroll a long way through the page which appears. You will not see it otherwise.

The Ned, opposite the Bank of England, has joined in too – unsurprising as partially shares owners with The NoMad. Here you need to try even harder to find information on the charge, since there is no clickable link to take you to the booking conditions – you need to cut and paste a URL into your browser.

I don’t know if these charges are new or not. I have never paid a service charge on my room rate at a UK hotel. I wonder what happens if you book a prepaid rate? Are you given a bill at check-out for purely the optional service charge?

Given that hotels are currently benefitting from the reduced rate of 5% VAT until 31st March 2022, as well as substantially increased room rates due to post-lockdown demand (Four Seasons Hampshire now wants £750+ for a standard room at a weekend vs £350 pre-covid), adding a 3% to 5% service charge on the room rate is taking things too far.

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. With upward pressure on salaries in the hospitality sector due to a shortage of staff, the UK may be going the same way.

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Comments (248)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Anna says:
    13 Sep13 September 07:56

    This is simply unacceptable but I imagine a lot of people either won’t notice or feel pressured to pay up. The other option is to sully the end of your stay by refusing to pay it. I would personally try to avoid any hotel which does this, let’s hope it doesn’t spread too far!

    • Anna says:
      13 Sep13 September 07:59

      Just to add – I usually tip in restaurants unless the service is awful, but with a hotel (especially a large one), I’m not prepared to contribute to their wage bill.

      • Pb says:
        13 Sep13 September 08:23

        Agreed , although if I am on a long stay and the room cleaner is good, which they often are , I will leave them a tip . I often make sure the room is in reasonable order before they come in though , don’t want them to think I’m a pig 🐖

        • Fenny says:
          13 Sep13 September 11:07

          When 4 of us shared a room during Comic Con, we left a major tip for our cleaners, as they kept us well supplied with extra towels, toilet rolls and coffee.

      • Super Secret Stuff says:
        13 Sep13 September 09:14

        I am the same, when I do long stays if they keep my room to a good standard I might leave the cleaner a cash tip. Absolutely not doing that for receptions where they don’t add any value. Particularly recently where they seem to think everything is too much effort!

        • Hotelier says:
          13 Sep13 September 09:22

          Wow Super Secret Stuff, that’s nice of you to say about reception staff… you must be a favourite of hotel staff.
          To be clear the service charge doesn’t go to reception only, count cleaners, technicians, security, accounts team…

          • Nigel says:
            13 Sep13 September 20:01

            I’m sorry Hotelier. These optional resort charges are a way to:
            a) Pay staff less and top It up via the tronc. Correct me if I’m wrong but tronc payments are not counted in pension, NI or other charges/staff benefits
            b) Are therefore a way to avoid paying tax to HMRC
            c) A devious way to bring restaurant tipping to hotel room charges.

            What is to stop hotels increasing this charge to restaurant service charge levels like 10% 12.5% or 15%?

  • FrontSeatPhil says:
    13 Sep13 September 08:15

    I had this at the rather unassuming Stanhill Court hotel near Gatwick a week or so ago.

    I queried what the unexpected ‘Service Charge’ was for and was told simply “service.” I asked again for more detail and was again told it was for “service.” I explained that if this interaction is their definition of service, they’re grossly overcharging!

    I had the fee removed, not only for the sarcastic response above but also as, frankly, the stay at the hotel was awful!

  • TimM says:
    13 Sep13 September 08:21

    The cruise industry has historically relied upon ‘discretionary’ service charges automatically added to every guest’s bill as a fixed amount per day in order to pay the wages. Theoretically, you can ask for these to be removed, through form-filling, but then all the frontline staff – your cabin steward, restaurant waiters, etc. are told in effect that you are not prepared to pay their wages.

    When this practice was exposed on a BBC documentary a few years ago the cruise line concerned gave the response that the company would always make up any shortfall in service charges to the contracted minimum wages. How generous!

    I wonder if this practice is starting to come to UK hospitality?

    • Peter Taysum says:
      13 Sep13 September 09:51

      I used to work on cruise ships, staff didn’t know which customers had removed gratuities and our company guaranteed to “make up” where tips were removed.

    • Number9 says:
      13 Sep13 September 09:55

      Celebrity cruises now include the gratuities in the price. If you want to give more that’s down to you.

  • KP says:
    13 Sep13 September 08:22

    I was charged this at The Ned too in London

  • Mark says:
    13 Sep13 September 08:23

    I remove ALL service charges when travelling. I tip on service received. I’ve never paid a service charge or resort fee. EVER!

  • DDG says:
    13 Sep13 September 08:25

    We stay at the Hilton Vacations in Vegas…when we are allowed to travel…. For some time they, in line with other Vegas hotels charge the resort fee. In their case it is $25 a night plus tax. For that you get weak internet and can even use the pool.. They are now charging for ‘optional room cleaning’, which you can decline at check in. The cost for a suite is $72 a night plus tax. Covid has been a bonus for them in bringing in extra revenue.

  • TGLoyalty says:
    13 Sep13 September 08:28

    I know the Langley charge a service fee on their room rate but it’s clearly shown on the Marriott website/app and within the advertised rate

    I thought this was just a way to pay less tax / fees

  • PGW says:
    13 Sep13 September 08:29

    This lark is getting out of hand now. Last week I had lunch at a restaurant chain who not only added the ‘discretionary’ service charge but also a £1 ‘charity donation”. Very hard to refuse the £1 ‘donation” without appearing to be an absolute skinflint but the outcome is that I will be much less likely to dine there in the future.

    • Bagoly says:
      13 Sep13 September 09:02

      I refuse and explicitly say: “The person who decides where my charitable contributions go is me, not management of a restaurant/hotel.”

    • Genghis says:
      13 Sep13 September 09:32

      What annoys me is that if there’s say a 12.5% service charge, then that also gets calculated on the VAT.

      • Algor says:
        13 Sep13 September 09:58

        In every decent place the service charge is not calculated in VAT, it stands in line of ‘non taxable amount’.

        The VAT amount on a docket in any bar / restaurant will make it clear what happens to svc.

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