Of course, this observation has nothing to do with any opinion regarding taxes… instead, I’m just super shocked how many hotels charge money after specifically stating in the award booking receipt I’d pay $0.00.
To go from zero to any amount of money means, at least to me, that there’s something really wrong. But when I’ve asked a hotel about this in person, nothing seems to happen, and it seems normal. But first let me explain what’s happened to me before, where I drew the line, and the results of the actions I took.
There are two main examples of this happening recently. Multiple times in the last tour of Europe did I notice taxes on rooms, but lately it seemed more than normal. Typically it’s $3 here, or $6 there… not a big deal.
But recently I checked out of a Radisson and got a bill for $34. “Um, it was a points night and I didn’t charge anything to the room.”
“Yes sir, this is the city tax”.
Okay, whatever. I know how this goes so I just paid it. Then I double checked at my next location. Yep, the confirmation when making the booking clearly stated that I’d spend $0. So I forwarded that email and pointed out the price I should have payed, and then I sent a picture of the receipt.
What really doesn’t make sense to me is that the bill at check out gave a percent for the different taxes. Something like 6% of one tax and 3% of another.
Hmm. Last time I check 9% of $0 is $0. How could they possible get $34? Which was basically the point of my email. I summed it up with two short points. 1) Your confirmation is $0 in taxes, and 2) the tax is 9% of $0, so where did $34 come from?
I didn’t get an answer on how 9% of an award night is $34, but I did get a refund. No worries.
The Big One
As I’ve said this has happened to me on hotel bookings many times before. Certainly a low percentage but definitely happens depending on the area and the chain. However, they were all small enough that I never made a fuss.
But last fall (2013) we took my Mom to Paris. Luckily a week before going a Holiday Inn in Paris went on IHG’s PointBreaks List (a list of hotels for 5,000 points a night). This is a sweet deal, so I booked 2 rooms for like 8 nights, since my mom wanted to do a lot in Paris.
The idea was that I would be spending a few points for two rooms but spending a week in hotels for free, for us and my mom. Imagine my surprise when early in the morning on the way to the airport, I mean like 5am early, when there’s one lowly staff on duty… I get the bill and it’s something like 10 Euros a night per room.
Uh… I don’t think so. I can’t remember the exact cost but over $200 for award nights!
However, it was clear that she was just doing her job. She hit check out, it printed a bill. So I paid and that was the first of two times I emailed a hotel over bogus fees and taxes that weren’t accurate to what I booked.
Here’s the kicker
I started thinking about it. The one in Paris only bothered me because it was so many nights. But really, it’s only because it was so many nights in a row that I noticed the big bill.
But think of all the hotels where I paid similar amounts just spread out over months or years. I’ve easily paid $200.
So at risk of sounding self-entitled, or like I’m trying to avoid taxes… I’m definitely going to keep track of whether or not confirmations mention the possibility of any more fees or taxes. If they specifically say the taxes are $0… then I’m going to tell them. “Hey look, it says right here that my final bill should be $0.”
This could easily make me look like a jerk, but I’ll try to be selective to times where it’s clear, and not be rude. Carrie likes to say, “ask clarifying statements”. Although I could take her advise and probably still end up sounding like a jerk.
For instance with a ‘clarifying question’ like this: “So are you stupid, or do you not know what zero dollars means?”
But am I right? Is this just mean, or is this actually a cheap move by the hotels? Inadvertently or not, if they aren’t supposed to be charging, then they shouldn’t be collecting money.
Perhaps the charges are some kind of per-night tax imposed by the local municipality. Nevertheless, it doesn’t seem fair.
Right, in many examples they occupancy taxes. Some aren’t and either way they didn’t tell me about that.
Drew,
Not sure about all the country specific rules, but for sure in Hungary there is a fixed tax that is collected by the local government for anyone spending a night at a hotel. It is a fixed amount and does not depend on the price of the room.
I know for sure that even in Croatia I had to pay some tax using CC points for taxes. I did not keep the receipt, but this is just a data point. Could it be that loyalty programs also pay for this tax and sometimes depending on the hotel some actually break it out?
This is an interesting topic…
Yea, I know many places do a per room tax… which I also wonder how that works, because in Hungry it was different at every hotel. But the weird thing is that when using points at both the Radisson and the InterContinental we didn’t have to pay this tax.
So it seems non-paid rates would be exempt but then some hotels don’t know this. Not sure how it works. Guess each case is different. And SOMEtimes, they do tell you that $5 in taxes will be due at the hotel.
“I’m confused”, “I’m surprised”, “Could you help me understand this?” “I have an inquiry”, are ways to challenge a bill without sounding like a jerk. Yes, if there are taxes that you need to pay, they definitely should be on your award booking receipt. After all, those taxes could figure into your decision as to whether to make an award booking or not, and ultimately your relative interest in participating in a program.
Right. Exactly.
It reminds me of airlines trying to rank for the search engines by charging fees later. Spirit was the worst but they all do it with bags. Clearly passing on the tax on a paid night (all hotels in Budapest did for the Orbitz deal) is a way of making the price sound lower.
Local governmental jurisdictions charge hotel occupancy taxes quite frequently. The key word is occupancy – it is a tax on you occupying a room and has nothing to do with whether you paid $200 or $0 to stay in that room. As for variations from city to city or hotel brand to hotel brand, you may or may not be charged for the tax but that’s more likely a result of how strongly a local government seeks collection of the occupancy tax from a particular hotel than inconsistent policies of a hotel brand across its hotels.
Right. But for different hotels in Budapest (a city with occupancy tax) I wasn’t charged for award nights.
But the issue at hand is mainly that many hotels specifically list $0 under “taxes and fees” and then they charge more.
Would like to know for future instances… whom do you email to get the refund? Is it the hotel manager, corporate, booking agency?
I emailed the hotel. It gets passed on to a manger. But as I said, check out at 5am… the person isn’t a decision maker.
This happened to me in Rome at the Hotel Indigo. They said that they are collecting imposed required taxes even if its a reward night. Yet at the other hotels I stayed at in Rome they didn’t collect these “required” taxes. I tried multiple approaches to not have to pay this but they didn’t budge. So I think it is at the hotel’s discretion
Right! Which discretion and “required” seem like very different terms.
Regardless, it should be listed in the booking price. If it wasn’t, totally email them. Not so they get stiffed on taxes, but because they shouldn’t be telling people we charge $0 for taxes and then don’t.
Typical in this industry. Where resort fees cover internet… you still have to pay for.
Yes, this happened at the Hilton Stucky in Venice. I was told it was an occupancy tax charged throughout Venice…not sure now if that was true. This information should be provided in advance. I know I have at times opted for an award night over a cash /points to avoid paying any taxes/fees.
Funny, I was thinking that today, that the taxes for this one hotel are so high I hope I have enough points for a cash and points… to avoid the taxes.
But it seems award nights typically don’t have this responsibility.
Regardless, they HAVE to let you know the full estimated price ahead of time.
I have had this happen at a couple of SPG hotels in Italy. They took it off as soon as I pointed it out to them. I am pretty sure that they were trying to gouge me if possible. Nothing ventured, nothing gained outlook I guess.
lol, seems to be an Italian theme. Great that they took it off.
In my experience this is usually a municipal tax that is collected regardless of price. So it makes sense that I would have to pay it, else the hotel would be giving me the room for free and paying the municipal government besides.
But in saying this, Marriott and IHG have always been very clear that I will pay this at the time of booking. And 34 dollars seems very high.
It’s rare that I’ve seen a property forewarn about these taxes. Is there a city in particular where you saw $34?
Definitely not anything near 34 dollars. But usually when I book a rewards night (thinking of Marriott and IHG) it says what the local municipal tax will be.
Additional taxes and surcharges may apply.
Total estimated cost is only available in the currency applicable to the hotel.
Total estimated cost for stay includes room rate, estimated taxes, and estimated fees. Total estimated cost for stay does not include any additional applicable service charges or fees that may be charged by the hotel. Estimated taxes and fees includes applicable local taxes, governmental fees, and resort fees as estimated by the hotel. Carlson Rezidor hotels does not and can not verify the accuracy of the estimated taxes and estimated fees, and actual rates may vary at any time and from time to time.
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I’ll put in my two cents here, although somewhat similar to other comments.
1) There probably are some sneaky hotels out there making a little bit of extra money where they can, but hopefully they’re few and far in-between.
2) I’m not intimately familiar with hotel operations, but from my understanding, most chain hotels are independently owned by franchisees who are reimbursed for points nights by the brand. Therefore, since these individually-owned properties are in fact receiving some monetary compensation for the room, many local governments likely see that as a taxable stay.
… and I totally forget to finish my thoughts.
Regardless, you’re definitely right – if the confirmation specifically says no charge, and doesn’t mention anything about local taxes or fees, you shouldn’t have to pay. But given the likelihood that these hotels legitimately do have to pay these taxes to the government, I think you’re going about handling it the proper (and simplest) way. Pay the hotel and then deal with the brand for the reimbursement you’re entitled to.
That is an interesting point about being compensated for the award nights.
However, if I were a hotel chain, I’d want the hotel to eat the taxes in order that my customers don’t feel like they earn a free night… and then they pay. Like how many frequent flyers feel.
Although, I have contacted the brand and they refer you to the hotel. They don’t get involved with such things.
In my experience, it’s usually the hotels trying to make an extra buck on an award stay, for which they usually get underpaid.
In Paris, I stayed in 4 hotels (don’t ask) — 2 Radison Blues and 2 Comfort Inns. Only my last (and dodgier) Comfort Inn added some 10-12 Euro charges for one night. The kicker was, though, it happened at the check in.
When I questioned the charge, the grumpy guy at the counter said it was the city tax. I told him, I’d stayed in three other hotels in Paris, and didn’t have to pay any taxes. He didn’t bat an eye and said something to the tune of it is what it is. Since I wasn’t going anywhere anyway, I paid the charge, planning to contest it later, but as it often happens with small charges, I forgot.
The Hotel Occupancy Fee is called differently in different places (in Paris, it’s Residency Tax, and it’s very low, like 3 Euro). It can be a flat fee, but it can also be a percentage, and it would have to be charged by all hotels in the municipality. But even though it’s a flat fee in Paris, I wasn’t charged in three hotels our of four. And in the fourth, I was ripped off. So YMMV.
This is exactly the theme. Many hotels don’t charge such “required” tax, and then one does.
Right, I don’t send an email every time it happens… only when it’s more than a couple bucks. But perhaps I should, and should tag the chain every time.
We had a night at the airport hotel in Vienna and were charged something like 2.5 euros. It was stated in advance that this was a per room occupancy tax and was also explained at the hotel. I didn’t mind it.
If I was charged any kind of % I’d be pretty annoyed if it wasn’t disclosed before.
Yea, when it’s listed, at least I made an educated decision. You should always know the price of what you’re buying.
This is an interesting subject to think about, though. They often accidentally give me a receipt with the amount on it that the award program paid the hotel itself for my points booking. I don’t think that it usually has tax calculated with on it, but maybe in some places that would be considered a taxable amount. If that were passed on to the consumer that could seriously affect lodging decisions.
I hate it when a service charge or something is calculated for something free based on an inflated original cost. i.e. recommending 20% on a free spa service with a crazy theoretical jacked up price, or leaving a tip based on the inflated hotel breakfast buffet price. ?? Sometimes the points program pay the hotel a very large amount for the room if the hotel is fully or nearly fully booked. I wouldn’t want to be paying tax based on that… it could end up being more than what you’d be willing to pay if you were making a cash booking and choosing your hotel based on that.
That’s a really good point about calculating taxes for award nights, and how it could change. Again, I think it’s about full disclosure, knowing the price ahead of time.
I hear of these bills for the program and never get them. Would be entertaining tho.
Good post and discussion. On a related note, I’m wondering what common practice is re. reward bookings and resort fees. (in my case, upcoming stays contemplated at Club Carlson & IHG properties in Orlando, where they ordinarily tack on resort fees on cash bookings.)
City taxes are part of a larger economic theme which is “tax the outsiders.” It’s another form of taxation without representation, and it’s very attractive to local governments, until the point where people start to avoid an area due to high prices.
I’ve certainly paid points-only versus cash+points in order to avoid local taxes, but usually it’s purely based on my valuation of those points.
I would love to see a hashtag, or some kind of movement to shame, or make more transparent this larger trend of hidden and surprise taxation.