What on earth is a “Hospitality Charge,” as seen at Bruegger’s Bagels in the Minneapolis airport? There’s signage explaining that a 4.5% surcharge is added on top of menu prices to cover ‘hospitality’ but also explains that this is not a tip and does not go to workers. (HT: Paul H.)
- Menu prices appear to be 4.3% lower than they actually are. The price of an item listed at $10 on the menu is not $10, it is $10.45. How can this be allowed?
- And what is this surcharge even for? There’s not even a narrative that it provides anything other than undefined hospitality – and it doesn’t go to the people providing hospitality.
It’s expensive to operate in airports. Rents are high, and a percentage of total sales is often taken by the airport as well. Usually these fees either reduce charges to airlines, or a portion are distributed back to airlines directly. In the case of Minneapolis – St. Paul airport the major beneficiary would be Delta Air Lines.
- HMSHost has the concessions contract, and they’re part of a multi-billion dollar revenue conglomerate.
- The more money they take in, the better off Delta is.
I first ran into restaurant surcharges at the San Francisco airport years ago. Businesses with more than 20 employees have to either provide employee health benefits or pay into a fund for uninsured residents that do not qualify for Medicare or Medi-Cal. It’s a cost of doing business that’s required in the jurisdiction so it should be part of the price and it comes across as sneaky, almost fraudulent when imposed as a surcharge. But that isn’t everything that’s going on.
In Washington, DC the voter-approved Initiative 82 eliminated the ‘tip credit’ that allowed restaurants to pay $5.35 an hour. The $17 minimum wage applies, and restaurants have responded by adding surcharges.
One way I’ve heard restaurant owners and managers there explain why they are doing this instead of raising the price of meals is interesting – it isn’t just “we want to trick customers who will think that prices are lower and then be surprised by the bill.” Instead they want customers to see that amount as a surcharge and have the opportunity to offset with lower tips.
If they find they can attract workers at $17, they don’t need tips to increase the wage. It’s an explicit way to shift a portion of what patrons used to spend on a meal from direct employee compensation to the bottom line of the restaurants themselves.
The Biden administration has a war on fees, but board members of the Minneapolis Airports Commission don’t seem to be listening, and neither is the D.C. City Council.
I’ll take a bagel to go, hold the hospitality.
Oh, I had a plate of nachos at the Tequileria in the Charlotte airport a week ago and they were even shadier. You pay at a credit card machine, select a tip option, and only once you get the receipt do you see that a mandatory 20% service charge was added on top of that, in addition to the tip you chose. If that’s not fraudulent, I don’t know what is.
Dumb. Just build it into the price of the menu items. Nobody in the history of flying has ever gone to an overpriced airport restaurant and thought ‘boy, I’d buy this if it were only 5% less’.
There is a new kindness charge next month
Any team member who says Thank you or please during their interaction with the guest
Can invoke the random acts of kindness surcharge @ 10% or more
Any surcharge in any restaurant reduces my tip by that same amount and maybe more. For example, I usually tip 20% of the bill. As you know many restaurants add a 15% service fee to the bill. Well since I’m already paying a service fee, there’s no need to add an addition service fee and I save 5%. And don’t tell me that I’m hurting the wait staff. The restaurant is.
I’ve seen a 5% add-on “for the benefit of workers” at Subway in OAK airport. As if it were different from every other dollar a customer pays. I thought drip pricing was illegal?
Vote with your feet. This is greedflation.
Menu pricing is one area where government regulation would do enormous good. It would be difficult for a individual businesses to post all-in pricing on their own because their prices will appear 25-50% more expensive than competitors’. Imagine paying exactly the prices listed on a menu at the end of the meal, and not a cent more. That’s one of the many things I love when traveling in Asia. I would wager that most restaurants would welcome it as well.
Additional fees should be banned. All-in pricing all the way.
I learned a new trick – the hard way….. My business partner and I took our team out for dinner a few weeks ago and we split the bill between the 2 of us – ok, no problem…. but the recommended “tip” percentages that they print out on the bill and listing of the total amounts for reference were not for my 1/2 but for the entire bill… it took me until the drive home that night to actually do the math in my head and realize that I gave a really generous tip that night..
I sense that all of this will continue to get worse…..until we all just stop not just feeding into it (no pun intended), but just stop giving these places our business….cant recall the last time I bought food at an airport.
Another guess / theory is that some lawyer justifies that this this charge is not included in the percentage of sales owed to the leasing entity as a condition of rent. They can pocket all of it.
Just wrote both my commissioner at MSP and Bruegger’s corporate HQ with links to this page. Maybe “If you see something, say something” will actually make a difference.
Please! The problem is not the retailers / restaurants. They know how to be competitive on price. The issue is the government entities that extract exorbitant rates and fees from all airport tenants. It’s what we all voted for.
I was thinking ‘F a Sky Club membership, I can just eat at a terminal restaurant for cheaper’. This is a good reminder. Surely there are kickbacks to port commissioners and such baked into this, so.don’t expect change.
Any up charges or additional charges certainly do go towards tips. Yes I said it
Yesterday at the Sheraton restaurant at MXP, two things upset me. You could not get tap water, only bottled water at 6 Euros and there was a 3 Euro per person “Cover Charge”. The latter was added to the bill in both the restaurant and bar.
At least in Europe, all the retailers include the tax (VAT) in the displayed price. Adding tax and tip to a restaurant bill in the US can add 30% or more to the total paid.
BTW, we also saw more restaurants in France, Italy and Switzerland with a “Tip” line on the bill. One time, we were even asked to add a tip.
https://www.thechalkreport.com/post/restaurant-charges-me-resort-fees
@ Mark – check out Priority Pass via Chase Reserve, and then eat at their network of airport restaurants. It beats Sky Club handily. Then cancel the Delta Reserve
All pricing on menus should be bottom line including tax. The government encourages this fraud. The situation is like the fictional law firm, Dewey, Cheatham and How. It is refreshing to be in a third world country where the price listed is the price paid unless you want to leave a very optional tip.
How about just not eating. Most of us are too fat anyway.
I’ve been in Sicily for the past month and haven’t tipped a nickel. It’s not expected and certainly not encouraged. The price on the menu is all you pay. No added taxes either.
@Gene is right. Its like we are unconsciously trained to eat in captive public spaces designed to do other things like transport and entertain.
I would never buy a thing in an airport or sports arena unless I could charge to a business expense account. Anybody that does has no respect for their money or more likely, no respect for the person or entity that provides them free handouts. I only might buy an overpriced bottle of soda or juice to mix & extend vodka I’ve brought along, but that is it.
There was a successful class action lawsuit against New York City Burger King’s for adding an “inflation fee” to all purchases many years ago.
Just stop tipping. Seriously. You feel bad the first few times, but it gets easier. Staff are paid normal wages now. Be the change you want to see in the world, and the change I want to see is no more tipping.
This isn’t just an airport thing.. I’ve been to several restaurants in Chicago area that have added a 3% surcharge due to rising costs as an alternative to raising the menu prices. See this example (scroll to the bottom of the menu) https://www.bub-city.com/rosemont/menu/
As it is the price on the menu in the US is never the price you pay due to (a) tax added on top (usually included in the menu prices in other countries) and (b) the “expected” tip (generally not expected and often lower in other countries). Yet people seem to put up with it. The worst offenders are car hire companies with their half dozen add on fees that are not optional and almost double the base rate. Why isn’t this called out more or objected to too
@Rob there are taxes on food in Italy and most (if not all) European countries but they are included in the price. It still baffles me the US don’t do this, although some cafes I’ve noticed do, but the majority don’t.
@Tom R: Taxes are different. They differ by jurisdiction, so have to be added separately. You have a single jurisdiction so it is easier to include them. Either way, they are a passthrough item.
This is not just an airport thing, I’ve eaten at restaurants in Chicago recently that have a 3% surcharge. The one states… SURCHARGE
As a way to offset rising costs associated with the restaurant (food, beverage, labor, benefits, supplies), we have added a 3% surcharge to all checks. We do this in lieu of increased menu prices. You may request to have this taken off your check, should you choose. I’m sure very few people notice let alone ask for it to be removed. It’s sneaky. I just tipped 3% less instead and won’t be going back. The worst offenders for taxes and fees are car rentals where the actual price you pay can easily be double the price advertised. Oddly I’ve seen very few blogs call this practice out compared to resort fees etc.
@Tom R: Car rental fees are invariably mandatory charges by third parties. Usually literal taxes, sometimes de facto taxes (airport access fee, etc.). These are different from the dishonest unbundling by hotels (resort fees) and restaurants.
@Vijay — I agree: if nobody tipped (like in Europe, South America, Asia and Africa), there would be no need to tip (like in Europe, South America, Asia and Africa).
Tipping fatigue is real, and we only have to point at a mirror to find out why.
Just paid $25 for two soft drinks and two granola bars at JFK. The clerk had the audacity to ask for a tip.
I the future, I’ll bring a plastic water bottle with me and well as some granola bars or snacks.
What do you expect from a country whose prices regularly exclude sales tax ?
As I’ve said previously, if a service charge or anything similar to that is added to my bill then I consider that my tip.
Meanwhile the CNBC store in charlotte is self checkout with the employee standing at the self checkout helping confused customers. Meanwhile the line to checkout just grows and grows
Nah, no thanks. Airport food prices are ridiculous. Im in the habit of bringing my own; including an empty water bottle
If they can’t have integrity, I will not s pend $ twice at a location that does this.
I walk away. I have order a sandwich question the price told there are “fees” told them no and just leave. they now have a custom sandwich they can not sell. 3% credit card surcharge. Reduce the tip…. note it on the receipt also..waiters yell about these fees. My business does not charge “check cashing fees” when a client gives me a check.
Vote with your wallet and WALK AWAY!!!!!!!
Let’s just eliminate tipping. Everything has to be listed as total cost, period. Fast food workers in CA are now going to get $20.50 if there are 60 outlets nationwide or they bake their own bread. Really? Did Subway get to the legislative branch? Eating out is like buying a new car, the price is X but then you have dealer prep, license preparation, etc. Just ways to rip you off.
Just no enough is enough
The fees are so they can subvert the “earned income” from sales
So they do not have to share that portion with the “landlord”
It is likely excluded from the lease terms.
30 years of doing commercial leasing as a broker and later as an attorney… this is likely an exploitive loophole a more “clever” attorney has figured out.
3-7 years from now this will disappear as the rest of my former colleagues will have attended enough CE units to have killed this tweak.
Thanks for the heads up. We’ll be going through MSP in a week.
And we don’t tip on carry out.