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Time to Remove Service Charges?

Is the automatically applied service charge an out-dated concept?

Is right now the opportunity to create a service-led tipping culture in the UK?

By publicly removing the charges, would it send a message to the UK customer that they should reward service, perhaps leading to larger tips?

Would it make careers in hospitality seem more attractive as seen in other countries?

Hospitality around the world stands at a crossroad. The pandemic has punched the industry again and again. Some have fallen away - some are firmly on the ropes.

New ideas are needed.

I sat in a hotel bar yesterday for about 90 minutes doing some work. I had one drink (no attempt to sell me a second) and the service was pretty poor. Then I got the bill.

  • 1x Diet Coke: £4.50. It was a nice spot, so I don't begrudge what many might refer to as premium pricing.

  • VAT: 5%. Great to see that they were passing on the discounted VAT to the customer

  • Service Charge: 12.5% (£0.56). I paid it, but I didn't like it.

  • I paid service charge on the VAT element of my bill. Did I just get taxed on my tax?

  • Do the staff see any of that money anyway?

This article isn't about the experience I had - but rather the fact that it triggered my thinking.

Hospitality is restarting.

Hospitality Customers are restarting.

Maybe we need to be sending them a different message about Tips and Service Charges.

Instead of asking the customer to 'Be Kind' maybe our focus should be on 'Rewarding our Service'.

New recruits to the industry are hard to find - but those that are great at service, should be able to make a decent living at it - and perhaps a more generous tipping culture could be something to come out of the last 18 months. To do that though, the industry should stand as one and level with the British public

  1. We are getting going again and our service levels will take time

  2. We don't want to hide behind enforced service charges that don't find their way into the pockets of our teams

  3. Reward your service - if its been great, be great with your Tip!

These coming months represent the ONE chance we get to change the future of how we operate. Let's look at things differently.

My Diet Coke.

If I had had any level of service I would have of course left a tip, to be honest, maybe a £1 a drink.

As it was, my 56p charge just disappointed me. I paid it, but was never going to add to it.


Our HCC Purchasing Specialist, Austen Bushrod has held senior roles in the UK Hospitality Industry for over 20 years and is a long-term champion of improving the customer experience.

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