Bengaluru: The clarification made by Department of Consumer Affairs on hotel service charges has once again ignited the debate. Being the only industry to have such a feature on the final bill, restaurateurs and hotel unions are not happy with service charge being made optional.
“We don't have the culture of a tip anymore, usually because the customer pays by card, and might have just forgotten to leave a tip. With the current situation, it might become difficult to retain the staff and they will just leave to another industry, if this is not profitable for them,” said Ajay, owner of The Fat Fanny's Cafe.
“Not levying the charge will make it difficult for hotels and restaurants in the long term, in any city. Staff payments are affected by the service charge, hence it is needed. If revenue reduces, the customer cannot bargain for a good service,” Ajay added.
Customers in dark
The customers on the other hand complain that as they are unaware of the service charge being optional, hotels take advantage of them.
“A lot of places do not inform the customers about the service charge being levied, which is wrong. If you are running a business there must be some honesty to it. We have it printed on every page of our menu, that there is a service charge,” said Charles, owner of Connie's Restaurant and Steakhouse.
Describing the win-win situation he said, “If the hotel wants to charge for service, they will have to maintain a standard. We charge 10 per cent of the bill as service charge of which 2, 4 and 4 per cent go for breakage, service staff and kitchen staff respectively."
While on one hand, service charge affects revenue, the breakage is another aspect. Charles says that invariably, there are breakages to cutlery every day. People drink at the bar, topple the wine glass over, kids break a plate, etc.
“We never put the customer on a spot and make them pay for breakages. One wine glass costs from Rs 90-300. A consumer does not think about these expenses, which is where the service charge covers for it,” said Charles, who has been in the business for 21 years.
‘Tipping is disdainful’
The Hotel Employees Federation of India, raised service charge as a demand years ago. “Workers rightfully demanded for service charge in 2007. Tipping is a disdainful practice and should not be practiced. There was a settlement made between the Union and the workers, because of which staff would enjoy service charge,” said N. Vasudevan, President of The Hotel Employees’ Federation of India. Vasudevan pointed out that the problem occurred when the service tax was added later.
