I’d like to think that I’m generally pretty understanding of how challenging it is for businesses to make money, and also that I’ve come to terms with tipping in the United States being a necessary evil. However, here’s something that crosses the line, in my opinion.
In this post:
Hotel restaurant adds 3.5% surcharge to offset costs
Live and Let’s Fly flags how Miru Restaurant at the St. Regis Chicago is charging a controversial fee on all food and beverage purchases. Miru is the hotel’s Japanese restaurant, though it’s also where breakfast is served, so it’s very much part of the hotel. As it’s explained on the checks that diners are presented (and also on the restaurant’s website):
As a way to offset rising costs we have added a 3.5% surcharge to all checks. You may request to have this taken off your check should you choose.
This fee is listed underneath the subtotal, and before the taxes. The fee doesn’t go to staff.
I find this surcharge to be super shady
Like I said, the restaurant business is tough under the best of circumstances, and there’s no denying that so many individuals and businesses are feeling the squeeze from inflation. That sucks, and it’s not easy to run a profitable business.
At the same time, adding an inflation surcharge is… quite something. I’m almost bothered more by it being voluntary rather than mandatory. Like, if costs have gone up considerably, then the restaurant should increase its pricing. The idea behind this fee is basically along the lines of “make a donation to the restaurant to cover costs, if you feel like it.”
I can’t say I’ve ever seen a surcharge exactly like this, though I have seen some surcharges intended to cover healthcare costs for employees, or things of that sort. I don’t love that either, but I at least appreciate the concept a little more, where you know what the money is (in theory) going forward.
Now, I still think restaurants should just increase prices to cover those expenses, but I can at least feel like “okay, that’s going toward these people having healthcare, which is good,” rather than “let the inflation cycle continue by paying a voluntary surcharge to offset costs.”
Does the restaurant really think the inflation that we’ve seen is temporary, and will reverse? I sure don’t think so, despite what we’ve been promised by some politicians. So it seems like the solution is to increase prices, rather than to just essentially try to hide the total cost that customers will pay.
It’s not entirely clear to me to what extent the restaurant is managed by or integrated into the St. Regis, but keep in mind that this is the same hotel that tried to find a loophole to avoid providing elite breakfast. Furthermore, while I can’t personally vouch for this, some suggest this hotel charges for butler service coffee, which would be a first for the St. Regis brand.
Bottom line
Miru Restaurant at the St. Regis Chicago has a 3.5% surcharge on all bills, to “offset rising costs.” While running a business is tough, especially with all that has changed, it sure seems like prices should just be increased outright, rather than adding a voluntary surcharge to all checks.
What do you make of this 3.5% inflation surcharge at the St. Regis Chicago?
This is only part of it at the St. Regis Chicago. My family stayed there in their Astor suite for 2 nights and NEVER had a concierge contact us once. At breakfast they also added a charge to the bill (not an inflation charge, but something similar) which I had taken of the bill. In fact, I then crossed out the charge amount and reduced THEIR payment by the extra they wanted to charge me...
This is only part of it at the St. Regis Chicago. My family stayed there in their Astor suite for 2 nights and NEVER had a concierge contact us once. At breakfast they also added a charge to the bill (not an inflation charge, but something similar) which I had taken of the bill. In fact, I then crossed out the charge amount and reduced THEIR payment by the extra they wanted to charge me - but still put the correct tip in. When the manager said something I explained why and I told them to call the cops if they wish, but that is what I'm paying.
Side note, this is something going on in general in Chicago. At 2 other restaurants, I had a bogus surcharge added. You can ask them to remove it and they will. I askes why every time and heard different answers. But the one thing in common is that it goes to the owners, not staff. And this was also at large multi million dollar restaurant groups.
"You may request to have this taken off your check should you choose."
i'd definitely ask to have this removed.
I hate this trend as well but I'm surprised to see it in here as such a shock. In San Diego I would say probably half of the restaurants I go to have this fee now. And most of them unlike Chicago don't have the line about it being taken off by request. I still ask every time and it is almost always taken off anyways, last time I did get berated for asking to take it off though they did do it. Craziness.
Americans voted to deregulate businesses.
This is what they they get, no more no less. Very much expected, since the goal of regulation is to restrain abuses.
If they raised their prices slightly nobody would notice or care. The fact that they are charging it as a separate fee gets attention. About the question if they think inflation will go down....That's not how inflation usually works...
Elections have consequences people. How many times do we have to say that?
I don’t necessarily disagree with you. The voluntary thing is dumb. Is it forever? Will the 3.5% ever increase or decrease as inflation increases or decreases? I’d decline in a heartbeat.
On the other hand, wasn’t Amazon (and others?) going to reveal inflation surcharges on its pricing/invoices until they (temporarily?) backed away?
You are thinking of tariffs, not jnflation.
Many, many restaurants in Chicago have added a similar fee over the last year in response to the elimination of the tip credit. The city is requiring restaurants to pay their servers the full minimum wage, phased in over a few years. Fees like this are intended to reduce tips proportionally to the increased base wage that the restaurant has to pay.
Essentially, the customer tips less, the restaurant passes on the fee to...
Many, many restaurants in Chicago have added a similar fee over the last year in response to the elimination of the tip credit. The city is requiring restaurants to pay their servers the full minimum wage, phased in over a few years. Fees like this are intended to reduce tips proportionally to the increased base wage that the restaurant has to pay.
Essentially, the customer tips less, the restaurant passes on the fee to the servers in the form of their higher base wage, and the server receives less in tips but ideally about the same total earnings overall.
@TA
There was no elimination of the TIP credit. What was eliminated was the Visa and Mastercard and all credit card companies making money on tips and certain taxes. And I am in total agreement with this. Why should a server pay Visa or any credit card company for the money they are earning for the work they are doing. Ridiculous.
The restaurants call the fees whatever they want, but it is a fact that Chicago eliminated the tip credit for employers starting last year. Every restaurant in the city is required to pay their servers significantly more (~8% extra every year) on top of the tips they already earn.
https://www.chicago.gov/content/dam/city/depts/bacp/OSL/07012024mwfactsheetenglishMW FACT SHEET-ENGLISH.pdf
Agree they need to raise prices instead of doing this.
The worst part, though, is that many customers reduce their tip by a corresponding amount. So in that case the restaurant group makes money, but the waitstaff has a reduced tip. Horrible.
Here's a crazy idea. Why not take all your costs into consideration, including employee welfare, a decent profit margin, etc, and price your menu accordingly?Instead of having a thousand "gotcha" charges added on. America is the world's centre of nickel and diming.
Yes I just reduce the tip. Same with the 4% healthcare supplement they add in San Francisco. Comes right off the tip.
Very shady. Looks like a place that should not be visited in anyway. They screw you on the prices, screw you on taxes. Let the hotel and staff rot for doing this.
Sixty brands and 130 restaurants across eight states... This is pure corporate bastardry. Vote with your feet, and eat somewhere else.
LOL. Like they care, or it's even an option when every restaurant follow this (as it's already happening).
The consequences if elections.
Either raise prices or don't. Optional charges such as this are absurd. The worst is London luxury hotel 5% service charge, and 5% on a hotel stay is a lot more than 3.5% on a meal. Just say no and hope places stop this.
It's even grosser, because they're actually saving money by not having to print new menus to reflect price increases. This way, as they continue to gouge customers at the POS, they do it with even less cost.
Win-win-win-win-win-win-win-win-win-win-win for St. Regis and their restaurant vendor.
It's a Lettuce restaurant. The nice ones print out new paper menus daily!
Call out who is behind this, it’s LEYE
Funds the LEYE gift card discounts that they give every Christmas that I use to discount my LEYE meal purchases for the months following that
This is sadly becoming the norm in Chicago, from high end to casual neighborhood spots. Super disappointing and very shady.
Lettuce Entertain You, the company that operates the restaurant, has imposed this fee across ALL of their dozens of restaurants. This started with COVID and was originally pitched as a way to help them get through that period. Then after the industry bounced back they not only kept the fee but raised it by half a percent.
Now understand, this is not a mom and pop operation. It’s a massive restaurant group, the largest...
Lettuce Entertain You, the company that operates the restaurant, has imposed this fee across ALL of their dozens of restaurants. This started with COVID and was originally pitched as a way to help them get through that period. Then after the industry bounced back they not only kept the fee but raised it by half a percent.
Now understand, this is not a mom and pop operation. It’s a massive restaurant group, the largest in the city by far with operations nationwide. On top of that they were investors in the reservation company “Tock” was was sold for 400 million dollars during COVID. There is no restaurant group on this planet that needs this charge less than they do.
Additionally they massively raised prices over the last several years across the board. In some cases by 50%. This surcharge is on top of that!
It’s crazy and we absolutely have it removed every time. Often take that same money and add it to the tip. I’d much rather the staff get it.
A lot of places in California or at least Bay Area do something similar although it’s typically 5-10%. Call it their ‘employee benefits expense’ or some other total bs. Just tell me what the price is
this is in active response to being required to. contribute to employee health care. I've usually seen this in downtown sf restaurants but have occasionally seen it elsewhere.
the text explaining the charge is usually some petulant bullshit. I try to avoid these restaurants.
Since Mr Trump’s “Chinese Virus” pandemic it has become a worldwide phenomenon that governments, corporations, small companies and owners run businesses have all been steadily increasing consumer costs exponentially. All claim the higher cost of materials, labour, energy and taxes are to blame. Few will acknowledge that profits, stocks and dividends, etc, continue to their upward trajectory.
You are exactly right: raise prices. Even if inflation slow, it’s almost certainly not going to reverse. On a macro level reversed inflation, i.e., deflation, is a bad thing for an economy.
Why raise prices if there's no regulation preventing you from adding a hidden fee? That would be stupid. You'd rather prefer if customers have a hard time figuring out the cost so you don't scare them away.
Lots of research on drip pricing and how it hurts consumers, that's why it's forbidden by high-ethics governments. The US elected corrupt deregulation grifters ($1.3b earned by the family just in the last month), so here we are.
Elections have consequences
I’m not a huge fan of the current administration, but you might be forgetting under which president the inflation at issue was unleashed.
You are exactly right: raise prices. Even if inflation slow, it’s almost certainly not going to reverse. On a macro level reversed inflation, i.e., deflation, is a bad thing for an economy.
It's amazing that owners don't understand their own business and consumer sensitivities. Just raise menu item prices by 3.5%. Consumers do not like the word fee or surcharge. You build labor, utilities and insurance into your costs. This should be no different. Pure lunacy.
Alonso should go run a restaurant instead of being a mid week quarterback in a travel blog.
Pure lunacy.
Ghost kitchens with robots only. Can't hire employees like you.
More and more restaurant that I go to now are adding 3% or 4% to the bill if we use a credit card. Just last Friday went to a Thai place and a note was placed at the door that 4% will be added to bill for credit card users.
We're seeing this a lot in Chicago too, and I've started paying in cash again at a lot of places as a result.
MN had a "health & wellness" mandatory fee of 4.5% for years until it was prohibited earlier this year. I simply avoid eating out as I won't pay these BS fees.
Does anyone honestly think the restaurant hasn’t already raised its prices due to inflation? The surcharge is a voluntary contribution to their profit margin.
So when costs go down, are they going to offer 3.5% back, if you request it? Don't think so...
Do you really expect costs to go down anytime soon?
I live in Chicago and as others have said, this is sadly common in the city. I agree though, it is shadier to have this be voluntary.
I live in Chicago and as others have said, this is sadly common in the city. I agree though, it is shadier to have this be voluntary.
As restaurant prices have increased, I know I have been checking menus prices in advance online to know what to expect. This is a form of bait and switch to encourage diners to go ahead and book without knowing the full price. As other commenters mentioned, if has little to do with St Regis / Marriott, but still a shady practice.
All surcharges and fees in addition to the published price are tacky and sleezy. Its deceptive to the customer to present one price on a menu but in practice charge something different. I wish the US would move to a system similar to Europe where the price you see is the price you pay and yes I am including sales tax with this.
This form of surcharge originated from Covid. Most restaurants in Chicago have removed them but some still have them. They are banking on customers who do not bother to ask the server remove it but the surcharge goes directly to the owner’s profit margin.
This is common at restaurants all around Chicago, not just this hotel
For what it is worth, nearly all nice restaurants in Chicago are doing this. Lettuce Entertain You, which operates the two St Regis restaurants, pioneered this across their other restaurants and all the nicer restaurants in the city have followed.
I wouldn't chalk this up to an evil move by the hotel, though there have been other games with food before. The fee is the operator standard practice across the city and the new...
For what it is worth, nearly all nice restaurants in Chicago are doing this. Lettuce Entertain You, which operates the two St Regis restaurants, pioneered this across their other restaurants and all the nicer restaurants in the city have followed.
I wouldn't chalk this up to an evil move by the hotel, though there have been other games with food before. The fee is the operator standard practice across the city and the new "norm" in Chicago, unfortunately.
You can request it be removed...
I’m all for it. People need to know what is causing an increase. Tariffs are a moronic policy when applied as this administration has done.
This has very little to no connection with tariffs as referenced on the receipt.
Most produce and food products and the labor working in the restaurant is from the US. Connecting this to tarrifs is weak.
From weak minds come weak allegations.
Except inflation is way down this year relative to Biden years. Turns out, as most real economists knew, inflation is driven by government spending, not tariffs.
I live in Chicago and have been to this restaurant many times. This has been on the bill for years (and is on the bill at all the other restaurants in this group - Lettuce Entertain You)
How is this different from simply rising your prices? Oh, right, by lying to your customers and not telling them price in advance, and hiding behind optionality of the fee (while knowing that most people will just suck it up).
But hey, if keep people keep spending their money in shady businesses like that, they very well deserve it.
While I agree this is obnoxious, I am not sure it's all that unique. I can't recall where off the top of my head, but I have definitely seen similar things at various independent restaurants in recent years.
Nice hotel but they're constantly finding loopholes or making them up and it seems tacky. I guess most business travelers won't care too much, but the whole ordeal is annoying. Not to mention their late night room service menu is quite limited. It isn't a 5* hotel in service but the location, views, and new-ish rooms are nice.
It's not the hotel. It's operated by Lettuce Entertain. It's a restaurant group that charges surchage for all their restaurant. They happen to have a consulting arm too and encourage other restaurants to do this. It's a form of collusive pricing if you ask me and someone should file a class action lawsuit against them.
No, it is the hotel. If you follow any of the history of the property they're always up to something shady, whether it's butler service coffee, upgrade games, denying elite breakfast, etc..
Correct, Connor. St Regis is not a real luxury brand and has not been for some time. Other than their Washington DC property, the rest are essentially tarted up Marriotts with free coffee delivery masquerading as "butler service" and concierges who think their job is to just google things for you
Do all there places have it removable upon request?
I’m not shy, if it’s removable, it’s better than a price increase.
I hate the credit card surcharges.