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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)

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  • Lee says:

    The same issue is happening at many restaurants in hotels and elsewhere.

    A discretionary 20% tip.

    I object to such a tip being added to my bill for bar food or anything else.

    If I wish to leave a tip I will – I do not expect it to be added to the bill in this way.

    Of course – will the hotel make a note on your account ‘removes tip – beware!’ and therefore future stays come without an upgrade or poorer service at meals?

    Ironically room service has a tray charge for them bringing you the food – but no extra ‘tip’ – so whilst they have to come further – their added fees are often far less. Which just goes to show that it is a way to get more money from punters.

  • Mikeact says:

    We have a family celebration next weekend for 15 of us. Nice local hotel and a very nice dining room. They have made it clear that there will be a 15% surcharge added to benefit all staff. As we know the place very well, we will have no problem with that at all particularly being a Sunday.

    • Anna says:

      But that’s presumably a meal, not a stay? This is quite common for large bookings, I assume it reflects the greater amount of organisation involved in serving a party.

      • Rob says:

        This is totally normal at any restaurant for a party of 6+ and is there to protect the staff, effectively (because human nature means that people get a bit neurotic about tipping £50 on a £500 bill even though that is the usual 10%).

    • The Savage Squirrel says:

      Also, crucially, that’s been flagged up and agreed beforehead rather than sneaked on at the end deceptively and mentioned only in the tiniest of small print. So that I have zero problem with.

  • Richie says:

    Annoying your customers for the chance of getting no more than an additional 5% really is a bit of a bad business move. Aren’t returning customers important?

  • ZF says:

    Restaurants are getting worse with this. A few weeks ago I was presented with a bill that was food: £16, then the usual 12% service charge (not on the menu or posted, but whatever) then some donations (??) with the total price of £20. Asked to remove all; I can grit my teeth at the service charge, but cmon’ let’s start arbitrarily add more things?

  • DEREK HOGG says:

    Seems like an attempt by US hotel chains to introduce the ghastly American tipping culture to the U.K. In the US, bar staff, hotel staff are ‘paid’ in tips. The hotel / bar gives them the space to do their ‘gig’ and they rely on the public to pay them through tips. The establishments are getting away with paying nothing for service, relying on the public’s generosity, and essentially using emotional blackmail to force the punter to tip the server. I once hired a US hotel, a Sheraton, to do a hospitality event for my company, and on receiving the advance invoice, thee was an additional $2000 added on for ‘gratuities’. I told the hotel that it was to my customers discretion whether they should pay gratuities, but the hotel made it clear that the ‘gratuity’ an obligatory up front charge, to pay the wages of their serving staff who were graded as ‘minimum wage, non skilled servants’. I was aghast to realises that we were actually hosting an event where the staff were essentially slaves. I mentioned this to the hotel, saying that I was surprised that they could get away with it as I understood that slavery had been abolished in the USA. The hotel had no response to that, except to re iterate that I must pay the additional charge.

  • Colin MacKinnon says:

    I don’t understand this at high-end London hotels – do their customers really choose between them based on a few quid as revealed on a price comparison website?

    Tips – the barber, rounding up to the nearest £1 or fiver in a cafe, and similar – in cash – in a restaurant. Taxi drivers and pizza delivery drivers I speak to say they almost never get tips now everything in cashless, except at Xmas.

    No-one tips me at work!

    Gift aid: sorry, I don’t actually pay income tax.

    Charity: I actually run a not-for-profit – hence not paying income tax!

    Facilities fee (or whatever): the only time asked for one – in Hawaii – I told them I’d walk, and sue if the other hotel was more expensive. It quickly disappeared.

  • Peter says:

    In general it is really annoying that there is such a big tipping couture here. Everything should be included, that makes it fairer for everyone. And why would a tip be based on a percentage? If I order a glass of water or beer or a steak vs pasta is the same amount of work. Also unfair for more expensive Vs staff that work in cheaper restaurants.

  • GHT says:

    Just…no. Pay your staff properly. I am a huge fan of restaurants that are “service included”, where the costs are a little higher on the ticket price (usuall c17-20%) but you know staff are paid properly and aren’t reliant on (rationally) having to suck up to big-spending tables for large tips. For so many reasons the tip system is ludicrous and o can’t wait until it disappears.

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