The Hilton Burlington Lake Champlain is charging guests a surcharge to pay by credit card, and appears to be calling it a tax. Hilton has a brand standard against this. Imposing this fee on the standard method of payment is drip pricing. And mislabeling it a tax is fraud. Surely American Express won’t be pleased, either, to learn a Hilton is charging their cardmembers extra to pay with a Hilton co-brand.
Yet The Points Guy defends the practice saying “It’s perfectly understandable that struggling businesses feel the need to pass on additional costs that they are also faced with” and suggests merely that it might be counterproductive, and “hurt sales and leave a bad impression on consumers” .. gobsmacked.
It’s perfectly understandable that struggling businesses feel the need to pass on additional costs that they are also faced with. But at the same time, these questionable surcharges can also hurt sales and leave a bad impression on consumers like Wallace and Burgin.
Six weeks ago Hilton told me, “we have brand standards that do not permit hotels to charge credit card surcharges to customers.” There are exceptions granted, for instance where such fees are common in the market like in parts of Asia Pacific. There’s no doubt this is a rogue property, implementing this scam poorly. It’s both a class action lawsuit and government investigation waiting to happen.
I’m vexxed though by TPG imploring readers to feel badly for this ‘struggling business’ which needs to recoup its costs. That’s called the room rate.
- Who is this business we’re supposed to feel badly for? The property is owned by DiamondRock Hospitality which acquired it from Blackstone in 2012. DiamondRock is a REIT with 30 properties and over 9600 rooms. They’ve engaged in over $3 billion worth of transactions since 2010.
- The surcharge comes as a surprise to customers and is even worse than a resort fee since they don’t even pretend to offer customers anything in exchange.
- Credit cards aren’t even more expensive for many businesses to accept than cash. When a guest pays by credit card the hotel doesn’t risk making incorrect change, doesn’t have to store cash at the front desk, doesn’t risk employee theft, and doesn’t have to deal with depositing large sums of cash at the bank. Plus by taking the credit card up front the hotel is assured of payment while cash guests might not pay at all.
This is a scam on the part of the hotel, and a poorly executed one at that. This isn’t a case of ‘on the one hand, on the other hand’ as TPG which first reported the practice at this hotel appears to suggest.