Are OTA tips fair for hoteliers and their staff?
Should OTAs and other intermediaries be asking customers for a tip?
Digital Marketing in Hospitality — Viewpoint by Max Starkov
Order pizza from your local restaurant and you'll likely tip on delivery. Use a food delivery service and you'll be given the choice to tip when ordering or on delivery. These examples cement a social norm: as a consumer, you have the choice to recognise - and reward - the service a person has provided to you.
Which brings us to the real conundrum here - who is providing the end product or service to the consumer? It's not intermediaries and OTAs such as Hopper: they act as sales channels and, as seen during the pandemic, very few have suitable levels of customer service to assist customers when things go wrong. It's the hotels, airlines, restaurants and activity providers who make or break someone's holiday experience.
That's an important distinction that Hopper's proposal overlooks. OTAs market themselves as empowering consumers to self-service their holidays. Adding a "tip" to already record high airline, hotel and restaurant prices, is a bit rich.
A recent piece in the New York Times highlighted the "proliferation of digital payment products" as making it easier for businesses that didn't previously ask for tips to now do so. The concept of "guilt tipping" - where consumers feel pressured to oblige or don't notice charges - is on the rise. Hopper's proposed default "on" mode for extra charges fits that definition. Arguably, it could also fit what the USA's Federal Trade Commission regards as "junk fees" - "extra costs that businesses tack on to products and services while adding little to no value."
Hopper's proposal is disingenuous - they should call this charge what it really is, an additional transaction fee designed to top up their revenue. Consumers need to be on guard for hidden charges and are unlikely to tolerate additional charges which, when analysed, seem to exist only to boost the revenue of technology companies. I cannot see how this supports hoteliers and most importantly the hotel staff that have had a particularly rough time the last few years.