Restaurant slammed for unusual surcharge

Customers have grown accustomed to Sunday and public holiday surcharges but a new, additional charge at one venue has been labelled as “greed”.

Customers have hit out at a restaurant in Geelong, southwest of Melbourne, for adding a “peak season surcharge” of 10 per cent to its prices between December 27, 2023 and January 26, 2024.

One angry customer posted an image of the menu from Pavilion, a waterfront venue on Geelong’s Eastern Beach, on Reddit.

“No need for a peak season surcharge,” the customer wrote.

“Set your prices year round and absorb this bulls**t.”

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An angry customer posted an image of the menu featuring the surprise surcharge to Reddit.

Sunday and public holiday surcharges are often applied by hospitality venues to account for the higher staff costs as they have to pay employees penalty rates on these days.

But the venue, which defended the surcharge, said it was being used to cover the cost of housing the additional staff it needed over the busy holiday period in order to attract them to the regional area.

In a statement, Only Hospitality Group general manager Georgie McInnes said: “As a business we have had to rent out a house nearby with the sole purpose of housing multiple staff members that have needed to relocate from Melbourne and from surrounding areas throughout this period.”

“Without this, our venue would not be able to operate.”

Ms McInnes added: “Unfortunately the venue is unable to absorb the costs associated with the accommodation as they are very significant.”

Ms McInnes said the business opted for the surcharge, rather than increasing prices year round as it didn’t “want to pass this cost on to our local patrons who continue to support us during the quieter months”.

The customer's bill showing the surcharge applied. Picture: Reddit.

However one local resident commented on Reddit that the venue is only frequented by tourists because “locals respect themselves too much to be overpaying for anything they sell here”.

The menu also shows the venue charges a 20 per cent public holiday surcharge, causing some to question whether customers would face a double surcharge on public holidays during the period.

One wrote: “I wonder if they stack the 10% peak season surcharge on top of the 20% public holiday surcharge?”

Others questioned why there was a need to charge extra during what would be the peak trading period for the business, while some said they would walk out if they saw a seasonal surcharge on the menu, labelling it as “greed”.

According to the Australian Consumer and Competition Commission (ACCC), charging surcharges is not illegal, as long as they are clearly outlined on the menu.

The restaurant is on the waterfront of Geelong’s Eastern Beach, southwest of Melbourne.

Many hospitality businesses are struggling with increasing food costs, utility costs, rising insurance premiums and rising labour costs at a time when cost-of-living pressures are keeping customers away or compelling them to spend less.

Businesses in the food and beverage services sector were found to have the highest probability of business failure over the next 12 months, according to a recent report by CreditorWatch.

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