Beware ‘Optional’ 5% Service Charge At Hotels In London

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,
DISCRETIONARY SERVICE CHARGE OF 5% WILL BE ADDED TO YOUR ACCOMMODATION BILL.

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Heads will roll at Marriott for not being first to the market with this. But they’ll no doubt go one further and add it to Bonvoy redemptions.

  2. Wow. Hyatt hospitality management now supports discretionary service charges being discretionary. Did Hyatt adopt the Marriott screw-the-guest playbook?

  3. It seems cheap to ask to have something like this removed and I’m not about to be the one to do it.

  4. Lol @ac, probably why they are doing it for people like you. I see it as a stupid tax (and fraud).

  5. I have no issue with demanding ( politely of course) that this “ optional” fee be removed

  6. It should be the other way around. The hotel should ask the guest if it is ok to add an optional charge.

  7. I was hit with this charge at the GSY Hotel in London a couple weeks ago. This charge is incredibly deceptive.

    It’s nearly impossible to find during the booking process, and let’s be honest, who actually reads the confirmation email??

    There was zero mention at check in.

    And, on the final bill – which I am looking at right now- there is NO mention of it at all! My rate, which was supposed to be £244, is simply listed as ‘accommodation… £259’. With app-based check-out, I didn’t even bother going to the front desk to try to deal with this.

    Some Hyatts prominently display the service charge. We may not like it, and some may choose to have it removed, but at least it’s not a scam.

  8. Since my reservation confirmation does not say it (booked 8 months ago), I will stay calm and ask for it to be removed.

    I do tip hotel staff (especially maids) so my conciousis clear. Not cheap.

  9. I can only speak for my home away from home in London, which is a high-end non-chain hotel.

    All 5 percent specifically goes into an employee fund.

    Team members themselves say they are paid among the best.

    So, I’m okay with it.

    As for Hilton, Hyatt, and Marriott, all bets are off.

  10. Nope nope nope.
    CHARGE THE FORKING AMOUNT YOU NEED TO CHARGE TO PAY FAIR WAGES.

    End of story. Period.

    As Gary rightly notes, crap like this ultimately doesn’t put more money in employees’ pockets, it depresses wages and just increases corporate profits.

    I’ll either avoid staying at scammy hotels that pull this crap, or if that’s not possible (corporate stay) I’ll politely but firmly ask to have the charge removed and will also post a lower-star review online.

    Chains will keep pulling this shite until/unless we make it painful for them to do so; until then, it will only get worse.

  11. So where does it explicitly say “you can have this removed?” Is the guest just supposed to figure it out?

  12. While this may be thought of as a “workaround” for UK law(s) that state that taxes and charges must be shown in the headline rate for hotels, in reality, it violates the spirit of the law, if not the actual letter of the law.

    We would not be surprised for it to be challenged at some point. In the meantime, I’m sure hotels will continue the money grab as long as they can, just as “resort fees”, “destination fees”, “facility fees”, “urban amenity fees”, and “you bet your ass we’re gonna charge you extra” fees have become ubiquitous across the US. :rolleyes:

  13. Jorge, it being listed on one’s bill as “discretionary” should do the trick. One would simply tell the front desk that one is exercising such discretionary to remove the charge. If that doesn’t work, ask for the manager. If that doesn’t work, suggest that you’ll be contacting the Times, the Evening Standard, the Daily Mail, the Guardian, and the Sun about the hotel’s business practices. Or, if you’re in a different city, it’s newspapers.

  14. Jorge, you are correct, we all have to be on our toes and think about this stuff. After all of the garbage we’ve read about what (hotel network) property owners try to pull, this might be yet another one It is a sad state of affairs.

  15. What, exactly, is THIS supposed to mean … “Many other London hotels have implemented a service charge, which has been particularly important due to lack of manning in the city.”

    This kind of fraud goes on because nobody complains or takes action. Back in the days when resort fees were just ignored at time of booking, I would demand that every penny be taken off my bill. With some hotels, it would take 20 minutes to calmly and politely repeat myself to an ever-escalating series of so-called managers. “If it wasn’t disclosed, I’m not paying it. If it’s ‘mandatory’ it belongs in the room rate’.” Hardly anyone wants to do that, and the hotels know it. This is shameful. I appreciate the warning. As soon as the mask requirement is dead, I plan to do a lot of travelling, and London is always a favorite.

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