UK Hotels Add Sneaky Discretionary Service Charges

UK Hotels Add Sneaky Discretionary Service Charges

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Doing some searching online, it seems like this practice has existed for over a decade, but it’s becoming increasingly common.

Why hotels are adding discretionary service charge

In the US we’ve seen the annoying practice of hotels adding destination fees and resort fees, as a way of making the rate appear lower than it actually is during the booking process, and so that online travel agencies don’t get paid a commission on a portion of a larger portion of revenue.

In the UK (and especially in London), it looks like hotels are increasingly adding a “discretionary service charge” to the room rate, which ranges anywhere from 3-12.5%, but is most commonly 5%. Here’s what makes this tricky:

  • UK hotels are required to display all-in pricing for all compulsory charges, so the initial rate you see includes all mandatory taxes and fees
  • Since these fees are technically discretionary, they don’t have to be included in the rate that’s shown, and for that matter they don’t even have to be displayed during the booking process

Take the Andaz London Liverpool Street, for example. During the booking process, you’ll see what the alleged room rate is, including all taxes and fees.

As it turns out, based on the hotel’s policies page, the hotel does have a discretionary service charge, it’s just not displayed at any point during the booking process:

Please note that a discretionary service charge of 5% will be added to your accommodation bill.

Many London hotels are adding discretionary service charges

What a frustrating practice…

I don’t have an issue with the concept of hotels adding a service charge to the room rate. You see this all over the world, from Japan to the Caribbean. As an American, I’m also more accepting of “paying” directly for service than many others are.

However, this practice rubs me the wrong way:

  • The reason the service charge is discretionary is quite literally to make consumers believe that it doesn’t exist, when they look at the rate that they’re expecting to pay during the booking process
  • I don’t want to support and encourage a practice that is designed to deceive consumers, but at the same time, I also don’t want to be cheap and punish employees for this practice
  • For that matter, who knows how fairly and equally this charge is distributed among staff
  • I don’t think I could bring myself to request to have this “discretionary” charge removed, assuming it was a hotel where service was good
Hotel service charges are nothing new, but typically they’re not hidden

Bottom line

Many hotels in the UK (especially in London) are adding discretionary service charges to room rates. In many cases these aren’t disclosed as part of the booking process, since they’re technically not mandatory. The UK requires hotels to display all-in pricing of mandatory fees, so this is clearly intended to be a workaround for that.

While I have no issue with hotels adding service charges, I do take issue with hotels trying to pull a fast one on guests, and that sure is what this feels like. The next time you’re booking a hotel in the UK, this is something to be aware of.

What do you make of these often hidden discretionary service charges? Would you ask for them to be removed?

(Tip of the hat to PortlySpartacus)

Conversations (34)
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  1. Alan Guest

    I would 100% demand this fee be removed - it's up to hotels to pay their staff properly and charge appropriate rates. I wouldn't be surprised if this charge ever makes it to employees anyway. I want an all-in price including taxes/fees when I compare properties.

  2. Michael Guest

    If it is a truly discretionary charge, I would ask the hotel to have it removed. Staff's pay should be covered by the hotel rate. If I have meals in the hotel restaurant I would tip on these occasions.
    This is indeed a sneaky practice.

  3. rrapynot Guest

    I’m British. No British person would hesitate for 1 second before demanding that this BS charge be removed. This is obviously a charge aimed at foreign guests who don’t know better and will just pay it. If anyone reading this is affected, demand the charge be removed and don’t feel bad about it. The staff likely feel like douchebags having to justify it and will be happy to make it go away.

  4. Tom Guest

    Won’t pay it, won’t book in hotels I hear do this, will be clear with management at a hotel that tries this that I won’t come back, will call it out on review sites.

  5. henare Diamond

    Nope out of this every time. life is far too short. for this BS.

  6. Kair New Member

    This reminds me of what cruise ships are doing with gratuities. I might be okay with it if the fee and its usage are clearly notified and structured in a way that it is charged per room per day (around $5~$10 a day maybe) rather than a percentage of room rate.

  7. David D Guest

    If anyone sees these, just say you are not paying it as others have said. If queried, reply you always tip individuals for their service directly.

    Then contact the Trading Standards in the UK which is available with further details from https://www.gov.uk/find-local-trading-standards-office and make a complaint relating to the issue that the hotel was unclear about the additional cost from the discretionary charge.

    A few complaints from different people should cause an investigation into the...

    If anyone sees these, just say you are not paying it as others have said. If queried, reply you always tip individuals for their service directly.

    Then contact the Trading Standards in the UK which is available with further details from https://www.gov.uk/find-local-trading-standards-office and make a complaint relating to the issue that the hotel was unclear about the additional cost from the discretionary charge.

    A few complaints from different people should cause an investigation into the the hotel or hotels.

    It is a very dodgy practice and should be stopped as it is unfair to the consumer.

    1. Phillip Member

      I agree regarding complaining to Trading Standards!

  8. RF Diamond

    Don't support hotels that do this. Ask them to remove it if you see it on your bill.

  9. beachfan Guest

    Lucky, do you tip the maid and bellman in London? If so, why are you not going to request the service charge removed (if the service is good).

    I can either tip or pay a service charge, not both.

    If enough folks say remove it, it will get bundled into the displayed total. By not pushing back, you are actually going to hurt the folks who would otherwise get tipped. Maybe it's still better for...

    Lucky, do you tip the maid and bellman in London? If so, why are you not going to request the service charge removed (if the service is good).

    I can either tip or pay a service charge, not both.

    If enough folks say remove it, it will get bundled into the displayed total. By not pushing back, you are actually going to hurt the folks who would otherwise get tipped. Maybe it's still better for them if Brit's don't tip, but is there anything guarenteing it goes to staff?

    1. rrapynot Guest

      I doubt a single penny of this charge goes to staff. This is 100% a money grab by the owners.

    2. GUWonder Guest

      Are hotels which charge this "discretionary service charge" paying employee taxes on the "discretionary service charge" amount collected supposedly on behalf of the employees (of the hotel and/or contractors???)? Why do I doubt that this money is doing much more than simply lining the pockets of the hotel owners/operators?

  10. Lars Guest

    So the hotel wrote me a follow up email to point out that the 5% discretionary fee is listed on the Hyatt website prior to booking the room. I confirmed this as well.

    Its sneaky though. When you are presented with the list of rooms and rate options you will see a text box with an informational "i" that has some text. You have to click on the "Read More" link to expand the...

    So the hotel wrote me a follow up email to point out that the 5% discretionary fee is listed on the Hyatt website prior to booking the room. I confirmed this as well.

    Its sneaky though. When you are presented with the list of rooms and rate options you will see a text box with an informational "i" that has some text. You have to click on the "Read More" link to expand the text box in order to see the information about the 5% fee. So its there prior to you booking but its kind of hidden also.

    I don't like sneaky slimy deceptive practices from any business, period.

    1. Christoph Guest

      but as far as I saw, there is no indication for this charge when booking through the app.

  11. AA Guest

    This stupid, greedy practice originally started at some London, and then wider UK restaurants with the infuriating 'discretionary' service charge of 12.5% being added to any bill maybe 15(?) years ago, not just the large parties' thing. Thats the earliest I can remember it in one restaurant I frequented in soho anyway.
    I'd hazard a guess this goes nowhere near the pockets of staff. So, simply ask for it to be removed - although...

    This stupid, greedy practice originally started at some London, and then wider UK restaurants with the infuriating 'discretionary' service charge of 12.5% being added to any bill maybe 15(?) years ago, not just the large parties' thing. Thats the earliest I can remember it in one restaurant I frequented in soho anyway.
    I'd hazard a guess this goes nowhere near the pockets of staff. So, simply ask for it to be removed - although I do agree it is shady practice both morally and legally putting it there in the first place, and you shouldn't have to ask - and if you do wish to tip then do so directly.
    But it's the UK. Tipping is not mandatory, compulsory, or expected.

  12. Tortuga Diamond

    Like @Creditcrunch, I went back to a 2019 Andaz Liverpool invoice and found nothing but the included VAT. Nada. It frustrates me that Hyatt is up to its regular tricks, tacking on extra fees for sh!ts and giggles. I'm headed back to London this fall for my first post-covid visit and had planned on staying at the Andaz but now I can't even avoid the fee by staying at the GSY. I wonder if the Shoreditch Hyatt Place is charging it?

    1. Neil Guest

      Why don't you just stay where you want and opt out of the discretionary fee?

    2. Tortuga Diamond

      Which is what I will do, @Neal. Perhaps I should have just shortened my tirade and said so? ;)

      But my frustration lies simply in the construction of the scenario qua scenario. I don't mind opting out, and I will, but I resent being placed in a situation in which I have to opt out at all. And that's where I'll leave it for now.

  13. Keyser Soze Guest

    It’s just deception, and if the employees don’t actively object to the policy, then they’re complicit. The comments questioning how much of the hidden charges are actually being distributed to employees are also germane. So, are the employees complicit, cowardly, just plain stupid, or all three?

  14. Phillip Member

    Same here - travel extensively in the U.K. and London and have never experienced it. Sounds more like Hyatt doing its usual and bringing its home ways to the international stage underhand!

  15. Regis Guest

    Discretionary means optional and voluntary, It is used as an antonym to mandatory. Incredibly dishonest of this hotel to call discretionary something that is mandatory.

    1. Tom Guest

      But it is not mandatory. You can demand that the charge be removed.

      The problem is more that it is not disclosed. So someone who checks out in a hurry and does not look carefully at the final bill will end up paying it by default.

      But then that is a problem with checking out anyway, if you don't ask to see the final bill and how it is broken down. I have caught being...

      But it is not mandatory. You can demand that the charge be removed.

      The problem is more that it is not disclosed. So someone who checks out in a hurry and does not look carefully at the final bill will end up paying it by default.

      But then that is a problem with checking out anyway, if you don't ask to see the final bill and how it is broken down. I have caught being double-charged as well occasionally. Always check the final bill and insist that any "mistakes" or random charges are removed, even if it means taking a few extra minutes and making a fuss.

  16. Creditcrunch Gold

    This as others have said is not widespread and in fact this is the first time I have seen this. I last stayed in the Andaz Liverpool Street in 2019 and it wasn’t charged back then. I regularly stay at the London Marriott Hotel County Hall and they don’t have this charge. I think Andaz are trying it on and should be called out and shamed.

  17. Richmond_Surrey Guest

    It's not common in London or UK. Never encountered it.

  18. Chris Guest

    I don’t think this is widespread practice in London at all - and certainly not outside of hotels affiliated to the major chains.

    The only sort of discrectionary service charge which is now pretty universal in London (although not elsewhere in the UK) is a 10-12.5% service charge on restaurant bills. But given that just replaces the need to tip, I don’t think most people really object to it.

  19. Stuart Guest

    "Discretionary" yet quietly hidden and probably missed by most for 1-2 night stays.

    I will never pay this. I'm sorry, they can pay their staff better. And I will tip those individually who provided exemplary service above and beyond.

    Further, I truly question how much of this is actually going to staff.

  20. David Guest

    Whilst I agree this is a terrible practice, it is absolutely not the case that "many" hotels in the UK and specifically London are doing this.

    I live in the English Midlands and travel extensively around the UK for leisure at weekends, especially to London, and usually stay in 4 and 5 star hotels of the major chains. I have NEVER paid a service charge at a UK hotel, and sincerely hope this doesn't catch on!

  21. Laurence Guest

    I stayed at the Great Scotland Yard hotel last week (thanks Ford!) and my £670 bill was inflated by nearly £34 due to this discretionary charge. Fortunately I had seen reference to the fee before check out. When I enquired about what it was for, they provide a very vague reply. I explained that I had already provided a gratuity to those I interacted with at the property and asked that it be removed.

  22. Frederik Guest

    The U.K. hotel and hospitality sectors have been hit very hard by Brexit.

    Especially now that free movement has ended with Europe after Hard Brexit, combining with few young Brits in an already ageing society going into the hospitality sector. So until the U.K. can again get more workers from elsewhere they will have these major shortage issues across hospitality and it will keep pushing up prices.

    1. GUWonder Guest

      Hotel room prices get pushed up more because of what the hotel owners think they can squeeze out of the situation than because of what is happening to their labor costs.

      At least in the US, it seems to me that hotel rates in high-demand areas have risen much more than hotel staff wages have. Blaming labor shortages and marginally higher wages for price increases has become sort of fashionable, but what really is...

      Hotel room prices get pushed up more because of what the hotel owners think they can squeeze out of the situation than because of what is happening to their labor costs.

      At least in the US, it seems to me that hotel rates in high-demand areas have risen much more than hotel staff wages have. Blaming labor shortages and marginally higher wages for price increases has become sort of fashionable, but what really is driving up prices for my hotel stays is: hotel owners' greed; hotel owners' desire to "make up" (and then some) for whatever revenue/income losses they've already suffered during the pandemic; and the public demand that is out there with the money to pay the higher rates after a period in which savings have accumulated for the wealthier segments and asset prices have had a boom run.

  23. Darin Member

    I agree that refusing puts the customer in awkward position, but I would specifically ask anyone who charges this whether 100% of the charge is going directly to employees. If not, I would have it removed - and it sends the message that you’re willing to pay it, but not if it’s just another revenue opportunity for the hotel. Even if it does go directly to employees, this is the hotel putting the burden of...

    I agree that refusing puts the customer in awkward position, but I would specifically ask anyone who charges this whether 100% of the charge is going directly to employees. If not, I would have it removed - and it sends the message that you’re willing to pay it, but not if it’s just another revenue opportunity for the hotel. Even if it does go directly to employees, this is the hotel putting the burden of higher wages on the customer, but that’s going to happen one way or another.

  24. Endre Guest

    Nothing will change as long as the majority of guests are oblivious of or indifferent about such fees.

  25. FNT Delta Diamond Guest

    I'm pretty sure hidden fees are illegal in the UK.

    "In a big win for Britain’s consumers, the British Competition and Markets Authority (CMA) has told big online travel agencies that they must include any mandatory charges like hotel 'resort' fees (which are often applied by non-resort hotels in big cities, as well) in the up-front listed price."
    https://www.smartertravel.com/britain-bans-hotel-resort-fees-and-other-hidden-charges/

    1. RJ Guest

      Discretionary by definition is the opposite of mandatory; this seems to violate the CMA rules for including all mandatory charges. I have a stay booked at this hotel over the summer; curious what will happen if I say "No thanks, I already tipped staff. Please take this off my bill."

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The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Regis Guest

Discretionary means optional and voluntary, It is used as an antonym to mandatory. Incredibly dishonest of this hotel to call discretionary something that is mandatory.

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Stuart Guest

"Discretionary" yet quietly hidden and probably missed by most for 1-2 night stays. I will never pay this. I'm sorry, they can pay their staff better. And I will tip those individually who provided exemplary service above and beyond. Further, I truly question how much of this is actually going to staff.

3
rrapynot Guest

I doubt a single penny of this charge goes to staff. This is 100% a money grab by the owners.

2
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