A 10 percent hotel “service” fee? What’ll they think of next?


You’ll never guess what Peter DeForest found on his hotel bill in Bangkok.

I won’t keep you in suspense: It was a “hidden” 10 percent service charge.

For what?

The answer reveals a growing problem among travel companies: their inability to tell the truth about their prices. Also, it suggests our options for fighting these distortions are limited.

Here’s the somewhat anticlimactic explanation. Most restaurants and hotels in Thailand add a 10 percent service charge to your final bill. It’s supposed to take the place of a tip, and generally, it’s pooled with other gratuities at the end of the month and shared among employees.

It’s hardly the only place that has “mandatory” gratuities. Many cruise lines do the same thing. High-end luxury resorts do it too for “your convenience,” because who wants to stand there doling out dollar bills on vacation? Also, it ensures your tips are sufficiently generous.

DeForest’s problem — and mine, too — is that Marriott waited until the end to tell him about the fee.

“The original booking screen said ‘Total Taxes and Fees,'” he says. “The confirmation I received by email afterward showed taxes plus a 10 percent service charge.”

How tricky.

“That’s just crazy. And they’re so proud of it that they don’t even disclose it until after you have purchased it,” he says.


No, that sounds like a hidden fee to me. These junk surcharges are meant to make the room rate look cheaper than it actually is and a company that values ethics like Marriott has no business engaging in this kind of subterfuge.

Related story:   "We are already aware of the situation"

But this isn’t just a Marriott problem, and it isn’t a Thailand problem. It’s a travel problem. Companies, even those that know the difference between right and wrong, believe it’s acceptable to lie to their own customers by omission — to not tell them the final price of a hotel room until they’ve made a reservation or have passed the point of no return on a booking.

Some of you believe the solution is easy: Spend enough time studying the fine print and you can outsmart even the most truth-impaired travel company. That’s consumer empowerment.

Perhaps.

But that kind of “do-your-due-diligence” approach to being a good consumer is unfair to the customer and lets the company off the hook. DeForest and others like him may not know the ins and outs of booking a hotel on Marriott.com, or elsewhere. They are not holding all the digital cards; the hotel is.

Such an approach to consumerism effectively gives companies a license to deceive their own customers and places the burden on us to discover their lies before it’s too late. And I think you all know which side I lean toward.

That’s right, I’m on your side.

This kind of nonsense must end, and only the big companies like Marriott, Hilton, American and Delta can stop it. Wouldn’t it be great if they all took a pledge to tell the truth, when it came to their prices?

Ah, I know. Dream on.

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

  • AJPeabody

    If in fact the fee was disclosed and added only after irrevocable payment has been committed to, then that is fraudulent and surely would be impermissible to a credit card. “Total taxes and fees” means just that and must be the final price, no ands ifs or buts. Dispute, dispute, dispute, and refuse to pay.

  • JohntheKiwi

    Exactly what I was going to say. Refuse to sign when you check out, present your credit card company with the original “total” confirmation, and they should side with you.

  • It’s only a free market if the buyer has discretion. A mandatory fee of any kind should have to be quoted as part of the base rate.

  • sirwired

    If it wasn’t quoted before purchase, I’m pretty sure it’s not legal to include it afterwards. I agree that “Total” means just that, “Total”.

  • Chris Johnson

    Just another marketing gimmick and a way to make extra money, it’s capitalism, plain and simple. The hotels can quote a certain rate on their website or in advertising to reel people in, and then list the fee(s) and taxes in fine print. As long as they do this before people have made a non-refundable reservation, I see no problem. Sooner or later there will be a hotel or chain of hotels that proudly say “the rate you see is the rate you get” (plus taxes of course). Capitalism, plain and simple.

  • taxed2themax

    In theory I’d agree… but.. it sounds like this transaction — the actual exchange of funds/bill settlement — took place IN Thailand.. as such, I’d wonder if in fact any other laws, other than those of the Kingdom of Thailand, apply to this case.. While not an expert in Thai commerce law (namely the rather broad Civil and Commercial Code of January 1, BE 2468) I doubt that such cases are either addressed or define what cost components need to be disclosed and at what point in the transaction progress.
    If the OP made the booking outside of Thailand, then perhaps other national laws might apply – again, I’m not sure, but to the larger claim of “I’m pretty sure it’s not legal..” I have doubts there as to the correctness of this presumption

  • sirwired

    If the reservation was made through Marriott.com, which is a US website for a US company, nothing else really matters.

  • David___1

    I’ve said it here before and I’ll say it again: I don’t care how a business breaks down the cost, whether it be fees or whatever. Just tell me the whole cost, all of it. I agree with full disclosure. Stop the deceit.

  • MarkKelling

    But it wasn’t taxes or fees, it was a Service Charge! :-)

    Actually I agree with you. No travel company should try and sneak in additional charges.

  • AAGK

    I agree. The hotel should be able to committ to a nightly rate, whatever it is, pre booking. The subterfuge is just annoying at this point. Disputing, advocacy- all great- but I want to come from my trip and just relax, without a to-do list. I don’t even care what they call the fee at this point, I just want a number so I will know the total before I decide.

  • Mark

    Service charges and resort fees are the reason I don’t use Priceline anymore. I refuse to agree to pay undisclosed mandatory fees. Seriously, what’s to keep a hotelier from adding a $100,000 per night “service fee”, undisclosed? It’s only a technical difference from what many hotels are trying to do now. Ban it.

  • Bill___A

    I have mentioned about Marriott adding an “optional” 12% service charge in the UK in food service facilityes as well as extensive use of DCC even when the guest has specifically stated (in writing) they do not want it. The hotel chain does not (in countless cases) follow the credit card company’s merchant agreement (as verified by an email to Visa about it). Marriott does a lot of things right, but I think it would be a good start to hold accountable what is now the world’s largest hotel company from skimming off money every which way. This must amount to a significant sum each year and it isn’t right. It has confused me for years why someone has not jumped all over this.

  • jsn55

    Kudos to the hotel industry! They’ve been getting away with this kind of cheating for years, and there’s no end in sight. Does this kind of thing really need to be legislated? How about just doing the right thing by your customers? Disgusting.

  • Jerry

    This is really nonsense. All hotels in Bangkok, and most of Asia, charge a service charge and government taxes. In Thailand, that’s 10% and 7% respectively. I have stayed at Marriott hotels in Thailand dozens of times. The Marriott reservation screen always breaks down the room cost per night, the government taxes, the service charge, and the total amount of the bill.

  • The Original Joe S

    I live on Soi Rang Nam. They’ll try everything to separate you from your money, and smile at you while sticking the knife in and twisting.

    Shoe store: tried to charge me more for another pair than I paid last week, and tells me “You must be mistaken.” AND sell me one size too small and stretch it to “make it fit”. Wouldn’t order the right size; would rather lose the sale than “give in” to the farang and order the correct size. They are often stupid like that, because they think that YOU are stupid.

    Taxi: Drive on left. Open left rear door, tell him where you want to go, and he tells you twice as much as the meter would show. Leave the door open and walk back up the street; moron has to get out and close it. One dirtbag tried to over-charge me because I was with my daughter-in-law [ who is, of course, cute, and looks 18 at age 34 ], and he assumed she was my little honey, and I was a tourist. I declined. “Well, how much you give me?” I told him in Thai what to do to himself, and that I lived there, moron! Left the door open, quickly walked back up the street to get away. Ha ha.

    Taxi: Tries to take you the long way. You tell him which way to go; he refuses. You wait until stop at intersection, in traffic. Get out and walk away quickly, against traffic. Sawasdee krup, Khun Chincho!

    Taxi at airport. You are in, and about 100 meters away from taxi stand, he says “How much you give me?” “Krung me-tare, doo-ay Krup!” No further argument.

    Tout: Taxi tout takes you to jewelry shop, they ply you with Johnnie Walker Black, and offer you s*** stones. Cloudy, occluded stuff fit for grinding wheels and drill bits. Drink their booze, take out a loup, examine stones, tell ’em “I’ll have to think about it.” and split. Looks on their faces: PRECIOUS! Thanks for the drinks, TOOD MUK!

    In Bangkok Chinatown with my son: Smiley guy talks to us and tells us about a wonderful club way over on Sukhimvit. Then offers to take us there. I show him keys to my motorcycle, and tell him thanks for the information; we can find it ourselves. Smile went to anger. We laughed.

    Bangkok can be fun if you keep your head out of your back pocket and pay attention to what’s going on around you.

  • Kairho

    A “service charge” is nothing more than what we in the US call a “tip.” Tips are basically mandatory regardless of what some think. Tips and SCs are basically the same thing yet restaurants never mention the tip (except for really mandatory on larger groups) until the bill is presented.

    Having said that I’ve always seen SC at least mentioned when booking international hotels, even if it’s not included in the initial charge.

  • cscasi

    I have traveled around a lot overseas over many years and have never seen a service charge added to my final bill, except in Cancun, Mexico. And when I asked about the charge, the Hilton front desk person immediately removed it.
    I have spent some time checking with Hilton, Marriott and Hyatt, using on line reservations and see no mention of any service charge. They do break down any required taxes, such as the city tax Zurich, Switzerland and Milan, Italy charges. I did find an Autograph Hotel in Milan (falls under the Marriott group) that did have a taxes and fees rate that was more than just the 5 Euro city tax rate. It did not break it out as a 10% fee, but when I did the math, it was there and was 10%.
    So, I guess you are right. There are hotels doing that.
    Now, if they are going to charge a “service charge”, then I should not feel obligated to leave a tip for the daily maid service (which I leave daily on the bed) or any tips I may leave for the attendant in the executive lounge, etc. At today’s room rates overseas in many countries that 10% would amount to some $30-45 a day. For a two or three day stay, that should cover tips for the Concierge and probably the bellboy as well. That would be the only way I might feel that I was not getting “ripped off” by the hotel(any and all services included).

  • gpx21dlr

    I don’t believe the tips will go to the employees. In the US and specifically eateries in SF, some owners were keeping the tips that were given via a credit card.

  • Blamona

    been going on since I can remember in Caribbean. And here’s the catch, they still encourage extra for maids, etc. And by law, most islands, can keep 40% of the tips back to management! Same with restaurants. Many Americans tip 15% on top of that! (we are a country of tippers) but many wise up and supplement 5-10% more.

  • joycexyz

    Exactly. And where’s the “free market” if every merchant does the same thing?

  • joycexyz

    Sounds like a barrel of laughs!

  • greg watson

    My wife always leaves a tip (daily) for the room cleaning staff, so if this service charge that is supposed to be perceived as a tip, is paid,……….then who gets the tip? Every cost, in every situation ( air, hotel restaurant, car rental etc.) should be upfront & in dark print before you are asked to finalize the transaction. My wife & I don’t cruise any more because we are Canadian, & by adding the exchange rate & an 18% mandatory tip, we are paying at least 50% more than a USA person. That 18% tip should be shown in the cost of the cruise e.g. $799 plus 18% ( for us ~ 23.5% ) surcharge for all services. Service fees & resort fees etc. are just a disgusting cash grab & we consumers have to BEWARE !

  • The Original Joe S

    It’s fun if you are retired, and not trying to accomplish anything important, like working, investing, running a business, etc. Going to the beach, sight-seeing, schmoozing with friends, buying fresh veggies and tropical fruits, etc. are nice activities.

  • AMA

    Exchange rates don’t have anything to do with these so-called “service” fees. Currency fluctuates every day. Why would you book a cruise on a US website if you’re in another country, anyway? I wouldn’t book a European cruise on a German website; I’d use the US one to get the pricing in dollars, not Euros.

  • Harvey-6-3.5

    This is why Uber is great. You know the price (and the driver has no incentive to take the long way around).

  • bayareascott

    DCC is what I would certainly call a scam.

  • bayareascott

    Not necessarily true. Prices are approximations only.

  • The Original Joe S

    I ride my motorbike just about everywhere. Lane splitting is legal. Cars move over for motorbikes to get through. Cars stop well behind the stop line to let the bikes go first upon the green. On a bike, one-ways are optional. [Not REALLY, but the cops won’t bother you. ] If the street is jammed, go on the sidewalk. [ Everybody does it.] Many traffic lights have countdown clocks to let you know when to put it in gear. I put fuel in it about once a week, more or less.
    If you wanna go from Sukhimvit Soi 6 to Soi 8 [ one block ], your choices are:
    1] Left on Sukhimvit and jink across from left side to RIGHT side in its left lane; go about 700m to Witthayu [ Wireless Road ], right turn. 1.1 km to New Petchaburi, right turn. 675m to Nana 3, right turn across all the traffic [ driving on left, remember? ] 1.1 km back to Sukhimvit, make left. Go 410m to Soi 8, wait for traffic oncoming to clear and zip across to Soi 8.
    2] Make right and pass through bollards to go on sidewalk from Soi 6. Navigate past shirt vendors, etc, avoiding loose sidewalk paving stones, and scoot around stairs to Skytrain station. Come out on Soi 8 and make right, ensuring that oncoming traffic from Sukhimvit isn’t making their left and t-boning you. Soi 6 to Soi 8 – about 115 meters.
    Which option d’ya think is better?

  • James Moninger

    The 10% service charge has been around in most Asian countries for many years. As mentioned previously, it takes the place of tipping in countries where tipping is not the norm. I am all for disclosure of fees, but this one is not something new or insidious.

  • greg watson

    You are so brilliant !……………….now find me a cruise to a nice warm climate that I can book in $CDN………………………I won’t be holding my breath, but I do appreciate you being critical of me.

  • greg watson

    Good to know Jerry. I guess if there is an ‘unspecified’ service charge, then you don’t feel the need to leave a tip, as that is what it most likely covers ?

  • Chris Johnson

    You’re right about that but the airline industry, at least for domestic flights, has become a shared monopoly. Four airlines which include Southwest control 80%+ of the domestic market and the “load factor” (percentage of seats with butts in them) is at 85%, whereas for much of the previous decades it was usually around 66%. On 80% of all the domestic routes you either have only two airlines to pick from or no choice at all and the planes are packed, so Southwest’s attitude hasn’t impacted the other carriers – I’m surprised Southwest hasn’t started to charge like JetBlue did. But the hotel industry, by its very nature, much more competitive than the airline industry and always will be. Gimmicks and marketing are far more important to a hotel’s success than how nice the sheets and pillows are (to an extent anyway).

  • Fishplate

    I would think that the merchant agreement would cover this issue.

  • AAGK

    I’m at the point where it’s usually not a matter of paying for improper charges as I’ve learned from this site how to navigate a resolution, I just don’t feel like navigating. I don’t want to call and send certified letters and emails. I just want it to be right. The rest is a headache.

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