Marriott has a new feature in its app to let you tip hotel employees. A third party service processes the tips, and presumably passing a portion onto the hotel for staff. This isn’t about guest convenience, except to the extent that more convenient means more tips – and more tips means the hotel can hire workers at lower wages.
Digital tipping update on Marriott app
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This is a new escalation in hotel tipping, going a step beyond QR codes which finally found a use case during the pandemic. We started seeing QR codes for menus and various other applications. Hotels started using them to encourage tipping.
Tipping via QR code has spread in hospitality so that you now may find QR codes for tipping the front desk staff who checks you in, not just housekeeping. There are also now airport hotels that encourage tipping the shuttle driver via QR code, too.
QR code tipping is often a service provided by a third party. There isn’t just a credit card processing cost to the hotel there’s also a service charge from the provider. That can be as high as 11%! The Fair Labor Standards Act allows deducting credit card processing costs from amounts passed on to employees. Auditing whether a hotel is passing through the full tip minus card processing fee, versus deducting the entire transaction fee charged, seems like fertile ground.
From The Tray Table is “torn” because he’s not confident tips make it to specific employees. One Mile at a Time “can’t decide whether to be annoyed…[or] making it easy [to tip] is good.”
So allow me to explain. This is all about reducing hotel wage costs. That’s why Marriott invested in building this out in the app. It’s about owner expenses.
- If an employee demands $25, it doesn’t really matter whether it all comes from their employer, or $15 comes from the hotel and $10 comes from the guest.
- When the wage comes directly from the hotel, that comes out of their bottom line.
- When the guest tips, that’s incremental revenue. So the hotel gets the employees they need, without spending more money and cutting into profit.
The CEO of HEI Hotels, which owns and manages more than 100 properties in the U.S. across Marriott, Hilton, Hyatt, IHG, and others including the Westin Grand Central, The Gwen in Chicago, and Revere Hotel in Boston as well as Liberty Hotel Boston and Claremont Resort & Club in Berkeley, explained that,
- He was having a difficult time recruiting employees
- Because they were demanding to be paid more
- So he needed to encourage guests to pay them more via tipping
- If he raised wages, other hotels would match that – but doing a better job getting guests to pay the wages via tipping was a sustainable advantage.
My reaction to hotels expecting me to pay their employees, as well as pay for their services, is this:
Comment
byu/Bored_Millenial- from discussion
inEndTipping
Any given employee is part of this structure and I don’t want to penalize them, but I still don’t like the structure. The employer should pay their wages, and not create awkwardness and uncertainty for the guest with variable costs separate from advertised prices. Building out technology to reinforce and extend the burden on guests to figure out what to pay each person they interact with is a terrible experience, and Marriott should be shamed for it – even if it is something their owners prefer and helps the chain advance its primary goal of ‘net rooms growth.’
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