Hyatt adding CC surcharge?

[oz_mark]

Looking at some dates at Hyatts and this message keeps cropping up

From 1 November 2011 onwards, an additional 1.5% service fee will apply to the total stay account when paying with a credit card upon departure

:evil:

 

[Danger]

It seems all Hyatts in Australia have added that little gem, just this past week.

 

[Mal]

Not surprising. Why not implement a way to increase your profit - especially since most of your major competitors are doing exactly the same thing.

Why stop at 1.5%? Should be 5 or 6%. That would teach those nasty credit card holders giving the hotel business that they aren't wanted.

 

[scheps]

It's annoying isnt it. The CC company doesnt charge them anywhere near that much....

 

[NM]

It's annoying isnt it. The CC company doesnt charge them anywhere near that much....

And I reckon greater than 90% of heir customers pay by credit card.

 

[Foreigner]

Not surprising. Why not implement a way to increase your profit - especially since most of your major competitors are doing exactly the same thing.

They're just recovering direct costs which they pay banks and credit card companies. Btw, I don't think the surcharge is that much of a burden. $1.50 per $100?

 

[Foreigner]

It's annoying isnt it. The CC company doesnt charge them anywhere near that much....

And how do you know that?

Amex and DC most likely charge relatively more than 1.5%. Which may explain why many merchants shy away from accepting these cards.

 

[cove]

We only use the Perth Club at the Hyatt cards as dining cards so it makes dinner for four go from $130 to $131.95. I haven't noticed it so far.
We don't use Sofitel because of their surcharge so for 1.5% they miss 100%.......

 

[Mal]

They're just recovering direct costs which they pay banks and credit card companies. Btw, I don't think the surcharge is that much of a burden. $1.50 per $100?

Nope. It's more complex than that. Handling a credit card does not cost the hotel 1.5% more than handling cash, it's just a convenient thing they can charge and get away with.

I'd like to see a cash handling fee added, a gift card handling fee applied etc as well - or all payment fees removed. Would be more fair.

 

[simongr]

They're just recovering direct costs which they pay banks and credit card companies. Btw, I don't think the surcharge is that much of a burden. $1.50 per $100?

Nope. It's more complex than that. Handling a credit card does not cost the hotel 1.5% more than handling cash, it's just a convenient thing they can charge and get away with.

I'd like to see a cash handling fee added, a gift card handling fee applied etc as well - or all payment fees removed. Would be more fair.

I agree with Mal - it isn't that simple. Handling cash is an expensive business. I can't imagine what they would do if I turned up to pay a $2,000 bill in $1 coins... Cash is expensive to move, retain and transact with - it is just that the cost is not visible and directly attributable to an individual transaction.

I also think NM's estimate of 90% is a little shy of the mark - I would expect it to be closer to 99% paying by card.

A big chunk of people staying will be corporates who don't have any choice but to use a card (I am directed to use a card at all times).

This is just a money grab.

 

[Stephen65]

It might only be 1.5% to the guest but for a hotel running on, say, a 10% profit margin then 1.5% added to every bill is a 15% boost in profits.

As others have pointed out the merchant fee is not an accurate representation of the additional cost to a hotel of taking CCs instead of cash. Cash has a cost in terms of extra handling, additional security and safe transportation to the bank. This is simply a pure money grab. This is exactly the sort of cost that should be dealt with as overheads as they have been since the 1960s especially as accepting CCs has advantages to the hotel.

If I have to stay at a hotel that has this charge I am minded to pay in cash. So far I have not had to resort to this.

 

[Foreigner]

If I have to stay at a hotel that has this charge I am minded to pay in cash. So far I have not had to resort to this.

One can pay in cash or by EFTPOS and avoid the fee.

 

[Moopere]

Whilst it certainly annoys the heck out of me to have to track all this stuff, in the end, its a cost of product to me and I treat it as such. Same with the multitude of extra costs exposed to the customer when renting a car. Its a lot of work, but ultimately it all boils down to a per day cost and I use this to compare the different services.

This cost+ obfuscation is rife. A lot of Asian hotels for instance are happy to advertise pricing that is much lower than that which you will pay on the day, with 20% taxes (and more) not displayed in prominent advertising.

So, in this vein, the Hyatt just got 1.5% more expensive to stay at, presumably this will have some effect on sales ... and if not, then they've pulled a master stroke by increasing profit without impacting customer retention.

 

[UP4014]

They're just recovering direct costs which they pay banks and credit card companies. Btw, I don't think the surcharge is that much of a burden. $1.50 per $100?

It's not a matter of it being a burden, but a matter of morals and ethics in charging what they get charged as to increasing that further to increase their own profit via the back door. (well front door in this case)

One can pay in cash or by EFTPOS and avoid the fee.

They can now charge a fee on EFTPOS if they so wish as that cost is shifting to the customer. As for paying a week long stay at a Hyatt by cash I'm not the the ATM could dispense that much in one go (my credit union anyway).

 

[Foreigner]

They can now charge a fee on EFTPOS if they so wish as that cost is shifting to the customer. As for paying a week long stay at a Hyatt by cash I'm not the the ATM could dispense that much in one go (my credit union anyway).

The point is you have a choice. Same as for taking your business to another hotel chain or establishment...as one poster said, he'd rather not stay at the Sofitel because of $1.50 per $100 fee.

 

[Moopere]

It's not a matter of it being a burden, but a matter of morals and ethics in charging what they get charged as to increasing that further to increase their own profit via the back door. (well front door in this case)

Whilst I understand this angle, it doesn't really bother me from that perspective. I am of the belief that businesses should be broadly free to add their own margin to any cost of business and on-charge that as part of their overall profitability plan in whatever way best suits them.

However, I can't understand the reason for obfuscating retail pricing by the addition of levies and cost recovery fees and so on and so forth. If you advertise something at $100, then it should cost $100 in my view. Not $100 + $1.5 CC fee + 10% GST + $27.56 of energy recovery + $59.32 employee wage recovery, etc,etc.

The argument goes that its not a mandatory charge and that it can be avoided by paying cash. Well, ok then, if 90%+ of your customers pay using card, why not offer a discount for cash? This will mean that 90% of your customers will pay the front facing cost as advertised, and those few who want to save a buck 50 can pay with cash and redeem their discount.

I'm certain its a form of indirect false advertising. They want Pax to make a purchasing decision before those people see the full cost. Assuming, probably correctly, that folks won't revisit their decision for such a (relatively) low additional fee.

 

[cove]

Just as I said I don't use Sofitel in Australia because of their surcharge the same applies to Sheraton in the US where they charge $1 each call for calling 1 800 free phone numbers.
It is up to the hotel to figure it out but I will tell them if I get surveyed.
We live in a land of plenty of hotels (provided you exclude Perth from that idea).

 

[drron]

And how do you know that?

Amex and DC most likely charge relatively more than 1.5%. Which may explain why many merchants shy away from accepting these cards.

And when I was in business and I know was still applicable last year I could accept Amex with a cost of 1.27%.I am sure Hyatt is a large enough business to get that rate.The ATO has a rate of 1.25% for Amex.

 

[oz_mark]

Whilst I understand this angle, it doesn't really bother me from that perspective. I am of the belief that businesses should be broadly free to add their own margin to any cost of business and on-charge that as part of their overall profitability plan in whatever way best suits them.

While I agree to an extent, I do have an issue with business that embed the use of credit cards into their business processes (in the case of hotels wanting to swipe you card for a hold at check-in), and then want to charge you for using them.

 

[Mal]

While I agree to an extent, I do have an issue with business that embed the use of credit cards into their business processes (in the case of hotels wanting to swipe you card for a hold at check-in), and then want to charge you for using them.

Even the Hotel Industry association agrees that credit cards are embedded into their processes .... Very interesting.