The U.K. has strong laws that taxes and charges must be shown in the headline rate for hotels. They cannot advertise a price plus resort fee or service charges. The price cannot even be advertised excluding VAT (tax).
Yet many hotels in London and the surrounding area have a workaround for this. They’re adding a 5% ‘service charge’ to bills on top of the room rate which isn’t advertised or even disclosed during the booking process. The trick is that it’s a discretionary (optional) fee, which is to say that the guest can ask to have the charge removed.
A reader flagged this at the Andaz London Liverpool Street. Rates for the hotel are shown on the website as being inclusive of taxes and fees (the rate show on the initial booking is the same as the ‘total cost of stay’ shown at checkout) as required by law. However the confirmation email says,
I asked whether adding a charge that isn’t disclosed at all during the booking process is compliant with Hyatt standards, and Arnaud Desaintexupery, Hyatt’s Area Vice President UK, offered:
The discretionary service charge of 5% of the room rate was added in January 2022 as a hotel colleague benefit for three Hyatt hotels: Hyatt Regency London – The Churchill, Andaz London Liverpool Street and Great Scotland Yard, which is part of The Unbound Collection by Hyatt brand. Many other London hotels have implemented a service charge, which has been particularly important due to lack of manning in the city.
All room confirmations at participating Hyatt hotels show this discretionary service charge under “reservation details” and the service charge is clearly stated on the information invoice during check-out and may be removed from the bill upon request. Unlike similar service charges at many other hotels, this service charge at participating Hyatt hotels is not mandatory.
While this discretionary service charge is on most rates plans, certain rate plans, such as a when a World of Hyatt member books a Free Night Award, are not subject to this service charge.
He’s correct that “many other London htoels have implemented a service charge.” He attributes this to pandemic-era labor shortages but the truth is that,
- workers demand a certain wage, and receive that wage independent of this service charge.
- the fee effectively reimburses the hotel for what they need to pay in wages, it’s a revenue-raiser rather than ‘extra money for workers’
- put another way, they can pay lower wages than they’d otherwise need to in order to attract workers precisely because they also distribute this service charge
And it’s done in a deceptive way. Saying that it isn’t disclosed during the booking process but included in the fine print of the confirmation and disclosed on the guest bill at checkout doesn’t deny this.
Most guests do not realize they can ask to have the fee removed. Many do not visit the desk or go through the details of their bill, trusting that it will reflect the rate quoted. In other words it’s a deceptive practice intended to generate revenue under the guise of pro-worker marketing.
However he’s also correct that this 5% ‘optional’ service charge is increasingly common in the market and not at all limited to Hyatt – it’s charged at properties like The Connaught in Mayfair, the NoMad London in Covent Garden and the Mandarin Oriental in Knightsbridge.
At least World of Hyatt members spending points for free nights aren’t taken for a ride with this hidden fee.