Hotel Gratuities Debate Reaches Tipping Point

Hotel Gratuities Debate Reaches Tipping Point

Skift Take

The shift to a touchless society shouldn’t put guests out of touch with those who need a display of gratitude. Technology is on the brink of impacting wide-scale change when it comes to virtual tipping — and it can’t come fast enough.

Mark Fischer counts himself lucky. The general manager of the Revere Hotel in Boston is in the heart of the city, just across the street from an ATM for guests to grab a few bills for staff tips.

But whether those guests actually brave snow, rain, or traffic is another story, which is just one of the reasons why the Revere is in the final stages of beta-testing mobile solutions for collecting staff gratuities. 

“With the pandemic pushing us in the direction of ‘touchless’ with keyless entry for guest rooms and checking in via phone, this will continue to enhance the touchless and tech-forward components,” Fischer said of his HEI group hotel. “Technology is definitely where the hospitality sector is going more and more.”

Cashless tipping technology is one strategy that’s encouraged across HEI Hotels & Resorts, but rolled out on a property-by-property basis. CEO Ted Darnall faced heat last year for comments encouraging the training of guests to tip more, as opposed to raising an hourly wage for staff. In 2021, the 80-property group instituted a policy enabling customers at check-in to authorize that tips be added to their final bill. Others like Hampton Inn & Suites Las Vegas-Henderson made headlines for automatically adding gratuities onto the folios for guests who used their mobile app to check in. 

The battle over who tips what, when, and how comes at a pivotal time for the hospitality industry. Hotel volume is still down, and many brands (including Hilton) are cutting back or eliminating daily housekeeping services unless requested. Guest rack rates are higher, which could leave guests with a propensity to tip less, says one union leader. 

Marriott has previously faced criticism for putting housekeeping envelopes in rooms across the USA and Canada as a not-so-subtle nod to leaving a gratuity. (The brand did not return a request for comment.) Hilton CEO Chris Nassetta got flack over comments delivered at a hospitality conference that he typically does not tip housekeeping staff – but in 2020 earned much more than the previous year despite much of Hilton’s staff being furloughed. 

Kurt Petersen, co-president of UNITE HERE Local 11, says that the 95 percent of his 32,000 workers in hotels, restaurants, airports, and other venues across Southern California and Arizona lost their jobs “virtually overnight.” While 75 percent of members are back to work, the nature of their day to day is much different — particularly for hotel staff. 

“We agreed to cut back on daily housekeeping, but we never thought that [policy] would stay,” Petersen said. “I wish employers would increase wages and that tips were less essential to the livelihood of our members. Because of the rising cost of living, especially in urban areas like Los Angeles, those tips matter a lot more. It’s become more and more difficult to survive.” 

He says that while it’s less customary to leave a gratuity for staff abroad, the base pay outside of the U.S. is often higher. Plus, Petersen added, places like Europe have universal healthcare so paying for medical needs are less likely to eat into base pay. 

But no matter which country staff lives in, the cost of living is rising — and gratuities are often given less frequently, especially for housekeeping staff. A reduction in room cleaning means guests who would often leave a gratuity in their room daily may only be leaving one smaller sum at the end of the stay, says Petersen. Plus, because rooms haven’t been cleaned in regular intervals, they often need more effort to get spic and span — meaning housekeepers may ultimately be able to service fewer rooms in one day. 

The union leader says the taboos around tipping are a murky blend of culture, convention, and location. In other words, there’s no standard formula for who to tip or how much. Guests typically have more direct contact with a concierge or bellmen delivering their luggage to a room, often contributing to a sense of connection,  Petersen believes. But the transition to a cashless and touchless society often impacts “faceless” staff — like housekeeping — the most. While Petersen says that “cash is still king,” he’s heartened by the move across some brands to offer more options to guests.  

Those brands include Wyndham Hotels & Resorts, which last week unveiled a new portfolio-wide mobile tipping solution for its U.S. and Canadian franchisees. The cashless platform Béné lets guests tip specific hotel staff via QR code. Codes are unique to each team member and tips are deposited daily either directly into their individual bank accounts or into the hotel’s account to be distributed with regular payroll.

Hotel Gratuities Debate Reaches Tipping Point

The cashless platform Béné lets guests tip specific hotel staff via QR code. Source: Wyndham Hotels.

 “Having previously empowered our franchisees to accept digital, contactless payment for stays at their hotels, the next logical step was to find a solution that allows guests to recognize housekeepers, wait staff and other frontline team members in a similar fashion,” said chief information officer Scott Strickland.

At the Revere, the team is beta testing one mobile platform that also allows guests to tip via QR code. Another option under consideration is an option to add gratuity on to a folio when checking out at the desk, although general manager Fischer says that only 35 to 40 percent of guests opt to check out in person due to new functionality available on guest room TVs.  

No matter which innovations hotels choose, the best platforms — and properties — are those that give the guest transparency and choice surrounding who gets what, says Petersen. 

He’s opposed to resort fees, which typically don’t include staff gratuities, aren’t optional, and are not listed in the base price that appears when booking online. Petersen considers these essentially “hidden or unclear charges,” he says. “Many guests expect that these go to staff as tips, but most of the time they don’t.” 

Pennsylvania Attorney General Josh Shapiro agrees, and late last year announced a settlement with Marriott international that requires the hotel chain to disclose extra fees at the start of a booking transaction. 

“Hotels shouldn’t be able to slap hidden fees on top of your bill at the last minute,” Shapiro stated in a press release. “Thanks to this settlement, we’re putting the hotel industry on notice to put an end to this deceptive practice.” Marriott is in the process of improving its disclosure, notes the Washington Post. 

Where there is more clarity on what is included in rates — and how that impacts hotel staff — is available through FairHotel, says Petersen. The site run by UNITE HERE North America provides potential guests with a directory of which hotel franchisees are “socially responsible,” he said, including those that offer retirement and healthcare benefits. There’s also a tipping guide. 

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