HotelsMag January-February 2018 | Page 22

TERMINATING TIPS
TRENDING
by the U . S . Federal Trade Commission ’ s Bureau of Economics , “ Separating mandatory resort fees from posted room rates without first disclosing the total price is likely to harm consumers by increasing the search costs and cognitive costs of finding and choosing hotel accommodations .” Lawyers following the issue say an FTC enforcement action is unlikely in light of President Donald Trump ’ s penchant for deregulation .
SEEKING TRANSPARENCY On the other hand , consumers have grown accustomed to add-on fees , a constant on sites that sell entertainment or sports tickets , says Dan Prywes , an attorney at Morris , Manning & Martin in Washington , D . C .
Hotels are concerned how far the state attorney generals will push the point . The AGs are taking a conventional approach to consumer protection if they require hotels to disclose mandatory resort fees before a reservation is made final , and not just in fine print , Prywes says . However , they are on more tenuous legal ground if they assert hotels must disclose fees upfront along with the initial advertised price .
Many large chains have begun prominently posting their resort fee at the top of web pages that list room rates .
“ Marriott clearly and prominently discloses the existence and amount of the resort fee through all reservation channels , from the time of reservation to check-in ,” the company said in a September filing in the D . C . case . Its disclosure “ fully complies with FTC guidance and state consumer protection laws ,” Marriott said .
Hospitality attorney Butler says resort fees may be annoying , but that doesn ’ t mean they ’ re deceptive or illegal . Hotels can tout that they don ’ t charge fees and turn that distinction to a competitive advantage . “ We can always give our business to another hotel ,” Butler says .

TERMINATING TIPS

Contributed BY MEGAN ROWE
Some restaurants have replaced tipping in favor of “ service included ” pricing or fees , but it might not be the right solution for every hotel property .
Tipped income must be replaced , whether by higher room rates or a service fee . Laws covering service charges often specify who can share in fees and whether an employer can retain some of it , says attorney Bernice Blessing , associate at Garvey Schubert Barer in Seattle .
The Waldorf Astoria in Chicago pays hourly employees , who don ’ t take gratuities , a 25 %
The Waldorf Astoria in Chicago
to 30 % premium over market wages and folds the additional wages into rates . “ But we ’ re still very competitive in our set ,” says Todd Chambers , managing director , adding that higher pay attracts higher-caliber talent .
Expect a learning curve . Daniel Hostettler , president and group MD of Rhode Islandbased OHM Collection , says it ’ s easier to introduce a no-tipping rule either in a new-build or when new
management steps in . Typically , though , staff is trained to politely decline tips and explain the policy . At OHM ’ s four luxury resorts , tips are forbidden ( aside from the restaurants ) and the consequences of accepting gratuities include possible dismissal .
Guests will need training , too . At The Siam in Bangkok , General Manager Nick Downing often fields questions about the proper amount to
tip , and he uses the exchange to educate guests . “ I explain that while it is nice to recognize someone who may have stood out providing exceptional service , we also have a service charge to recognize those behind the scenes who make everything possible for the team in front of the guests ,” he says .
Retention could be challenging . “ We do an annual wage survey comparing us with the competition , and we
can show employees at the end of the year how they are making more at our property ,” Hostettler says .
It can encourage teamwork . OHM Collection uses an algorithm based on guest satisfaction scores by department and other factors to divvy up most of the US $ 38 resort fee . “ The staff goal is aligned with the hotels ’, and they are making more money as we are ,” Hostettler says .
18 hotelsmag . com January / February 2018