The new Elysian Hotel has a solution to the gratuity issue – no tipping allowed.

by Janice Hough on March 26, 2010

As a former high-school and college waitress, I understand the necessity for tipping. As a traveler, sometimes it can be maddening. It’s not just how much to tip, it’s who to tip?

The doorman? The valet who takes the car and/or the one who brings it back? The succession of bellhops who take your bags from the front door, to the front desk and eventually to your room? The various room attendants/maids, etc.?

Even knowing that you should tip, there’s often that “I would love some ice, or fresh towels, or some other little thing situation,” and realizing you don’t have any small bills.

Now, the Elysian hotel in Chicago, a member of Leading Hotels of the World, eliminates all that. It is one of the few deluxe U.S. hotels with a no-tipping policy.

(The Inn at Union Square, in San Francisco, has had such a policy for years, but it is a small 30 room limited service hotel. The ultra luxury Inn of the Five Graces in Santa Fe is also a no-tipping hotel. And some other inns and “bed and breakfasts” will suggest no tipping. But that’s about it, a little more than a handful.)

The hotel claims that their wages and benefits are high enough that their employees don’t need to rely on tips. Staff will “politely decline” if guests offer.

According to the brochure given out to travel agents, “the owner does not want clients to feel obligated to always search for money.” (Curiously enough, David Pisor, who is part-owner, and CEO, doesn’t have a hotel background, having worked in restaurants, residential development and the software industry.)

Now, while tipping isn’t allowed, the Elysian is hardly a discount property. as rates, admittedly for rooms that are all over 600 square feet, start around $500 a night. Which is high for Chicago, but not out of line with many other deluxe properties, and presumably some of that cost does go to the higher employee salaries.

Although the property doesn’t divulge those exact salaries, it would be interesting to know how the staff feels about this policy, especially industry veterans who are used to earning a good deal of their take home pay in tips, and in cash.

For that matter, travelers who are used to tipping for good service might feel awkward not handing out cash to an employee who goes the extra mile.

In any case, it is certainly an unusual experiment. What do you think, Consumer Traveler readers? Would you rather pay more up front and not have to deal with paying out small amounts on a regular basis? Or do you think the current system, with potential monetary incentives for top service (and disincentives for bad service) works better?

photo from elysian hotel website.

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Tagged as: Chicago, Elysian hotel, no tipping policy

  • JoeInAtlanta

    I love this policy. Employees should be paid a fair wage for accomplishing their jobs, and customers should not be put in the position of making up for the penny-pinching strategies of management.

    As for myself, I long ago decided on a policy of ALWAYS tipping the same percentage (20% in restaurants) REGARDLESS of the quality of service. If there’s a serious problem in the way a server handles me, I’ll discuss it with management so they can follow up as appropriate, but the tip is not changed.

    My job is as a software engineer: Very often I will come up with ideas or strategies to make people’s lives easier, even if they didn’t know to make the request. No one offers me a tip for doing so (and it would be absurd to think that they might). I do an exemplary job because I enjoy my work and want to help others — and my salary and retention reflect on the solid foundation I have built.

    The same should be true for service staff. They shouldn’t get a little extra because they were exceptionally chipper one day, or because someone thought they were “cute.” And their pay shouldn’t be penalized because they were having an “off day,” preoccupied with thoughts (for example) about a sick pet or family member, or because they got saddled with a large table of travelers unfamiliar with American tipping customs.

    Their pay should reflect the hours they put in, nothing more, and nothing less. And it should ALL come from management. I would EAGERLY give my business to any establishment that would remove me from the equation of its employee reimbursement practices.

  • Puzzled

    Amen to Joe In Atlanta!

    There are many, many industries where staff work long and hard to fulfill customer needs. Most of us know that we won’t have customers if we aren’t pleasant, creative and helpful in meeting those needs. I don’t expect tips for doing my job well – and no, I don’t make a huge salary.

  • Bodega

    Getting of the airport hotel bus to pickup our car, a fellow passenger, after tipping the driver, shouted, “Yes, I am home, done with vacation and tipping every Tom, Dick and Harry!”. We all chuckled and agreed.

    At they Hyatt Regency Embarcadero in SF, if you drive to the hotel, you are greeted by the head valet, a tip, someone gets your bags, a tip, to take them up to the checkin counter and the bell captain, a third tip before heading to dinner where you pay another tip. Should you wish a spa treatment, there are more tips. Then of course you tip the valet to get your car that has been in a parking spot at the tune of over $50 a day in addition to the cost of your room. A bit pricing and ridiculous!

  • Al Bruton

    It’s interesting to compare Canada, USA, and Europe regarding tipping.
    Americans will tip and usually are generous. They get good service and prices are usually lower than other countries. I have seen Americans in Europe putting down a tip without noticing that the tip has already been added to their bill.
    Canadians are not generous tippers and often don’t tip at all. Service is good and the prices are somewhat higher than in the USA.
    Europeans don’t tip at all. It is automatically added to your bill in the tourist areas. Service is spotty and prices are extremely high.
    Many high end hotels in tourist areas don’t pay some of the staff, they charge them to work there. Some staff do so well on tips they pay to get the job and sell their job to a replacement worker when they leave.
    The thing that bothers me about tipping is that it is the main income for most service workers, but there is no accounting of the cash tips.
    This automatically leads to abuse of the income tax laws, employee rights and minimum wage laws.

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  • http://www.bonjourparis.com Karen Fawcett

    What a good idea. This policy will eliminate so many noses being out of joint when Europeans don’t tip. Please pay employees a living wage. They should not be expected to grovel and should be professional when working and treated as such.

  • Toska Strong

    Historically one of our favorite hotels has been Las Mananitas in Cuernavaca, Mexico. It’s not a budget property but it’s not outrageous, especially for the rate of service. They have a strict no-tipping policy. The bellman who brings your bags to your room and the one who takes them upon departure are the only staff that are tipped. They are very clear about this at check-in. A small fee for the rest of the service staff is added to your charges and you pay upon check-out. The staff will not take a tip. It’s quite liberating to know that when you go to the pool the man who brings cold bottles of water and a relish tray isn’t expecting you to fumble around in your bathing suit for a tip. It’s been 5 or 6 years since we’ve visited so I don’t know if the policy changed along with the management but that’s how it was the two times we were fortunate enough to stay there.

  • Amy

    Many, many years ago, when I was working for tips in the hotel industry, I could easily make $1000 a week in gratuities, even during slow periods. I provided outstanding service, and went above and beyond for my guests, often working long hours outside my scheduled work time to ensure that their stays were ideal. Even though I had fun doing what I did, and would have provided good service regardless of whether I was tipped or not, the gratuities certainly did give an incentive to go even further. I worked with demanding guests, many of whom never thought twice about calling my personal home phone number for assistance at 2AM. And I answered, because I knew that doing so just might help me pay some bills or save up for a weekend getaway.

    In short, those tips gave me an incentive to dream up ways in which to provide amazing customer service. I can’t imagine that, short of paying me about $50K more a year, there was anything my boss could have done to incentivize me more. My service was recognized and I did move up quickly in the industry, but it was years before my salary was commensurate with my skills, experience and knowledge. That’s just the nature of the business, and I knew and accepted that.

    I’m curious as to what exactly this hotel is doing to incentivize it’s workers. Are the salaries really that high? Are there big bonuses for those who consistently get great reviews from guests? Do they have some sort of fast-track management program? Even that probably isn’t effective. You’ll often find that the very best service employees would never take a salaried position, because they often make far more than their higher-ups once tips are taken into account.

    What’s really happened here is that all of these employees have taken a pay cut. Some will be just fine with that, because they’ll be able to do a mediocre job and skate by, all while remaining on equal footing with their coworkers. But I fear that those who, like me, know that better performance leads to higher pay (as it does for many jobs), will leave this property to go somewhere else where that can make that higher pay.

    I, too, would love a world in which hotels and restaurants paid their staff so well that tips weren’t necessary. But let’s face it — most travelers and patrons are not willing to pay the higher base prices that would make that a reality. Or, as an alternative, they’re not willing to accept the lesser degree of service that would too often be the result when incentives are taken away.

    I encourage all those who say that they work hard and do great jobs and don’t make a good salary for it to turn in their resignations today. The hospitality industry is always looking for people like you. Go be a concierge or a bartender. If you’re as awesome as you say you are, you’ll make a killing. You’ll get to meet lots of new people (many of whom will become like family), you’ll enjoy the variety and the pace, and the wads of cash you take home at the end of the night will put a smile on your face. Or, you may just find out that repetitively lifting objects over 50 pounds and working till midnight is too hard on your body. Or that smiling and groveling for someone who’s an inconsiderate jerk for the tenth time in a day gets to you after a while. Or that scrubbing toilets on Christmas morning while your kids cry because you’re not home to open presents with them really sucks. You may decide that the good outweighs the bad and decide to stick with it. Or you may find a new appreciation for what service workers do, and you may not be so bitter the next time you give a valet attendant two bucks.

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  • bert

    Amy, you are so bitter, i felt bitter just reading your post, youre contagious,….lighten up, for yourself,,…geez

  • Christopher

    I am pleased to hear this. I will be staying at the Elysian. I understand it is a luxury property and applaud them for building in a fair salary for their employees into the rate. It does take one less concern away from a stay in a hotel. The rates for rooms are high and it is an added luxury to not have to deal with constant tipping so as to reward/not offend for expected services.

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