Hotels' discretionary service charge sparks fierce debate

Top London hotels have found a new way to boost their revenues - by adding discretionary service charges to customers' final bills.

The practice is common in US hotels and UK restaurants but relatively rare among UK hotels.

The Savoy Group has made the most concerted move in this direction. Last March, it added a 5% discretionary service charge to bills at its London properties.

And Peter Birnie, the new chief hotel inspector for the AA hotel guide, has noticed that several high-quality London hotels have recently started adding an optional service charge for food and beverage consumed on site by its guests.

A Savoy spokeswoman said the optional charge was an alternative to cutting back on the variety and quality of services expected at luxury, five-star hotels in a slowing economy.

She added that it rewarded back of house staff who are less likely to be tipped than other workers, helped offset the increased costs of living in London, and solved the guest dilemma of who and how much to tip.

But the trend is opposed by the Consumers' Association. "When you pay to stay in a hotel, good service should be part and parcel of the package," said Kim Winter, editor of Holiday Which? and co-editor of the Which? Hotel Guide.

Hers is a view echoed by Birnie. "When we pay a hotel tariff for staying in the hotel, the presumption is we are paying for the hotel service," he commented.

Although Winter has encountered discretionary service charges at all levels of hotels in the UK - including a small Exmoor hotel which slapped an extra 10% on the bill - she said it was not common.

"We would really deplore that practice spreading any more over here," she added. "Hotels should pay staff wages they can live on."

As readers have complained that staff are younger and less well-trained, even at high-priced hotels, she believed charging even more for poorer service would be "clearly ridiculous".

Birnie also questioned whether extra service charges were appropriate when meals which were eaten in bedrooms already cost more than those eaten in hotel restaurants and lounges, presumably because of the service element.

Source: Caterer and Hotelkeeper magazine, 20-26 February 2003