Lawsuit against Kahala Hotel alleges deceptive service charge - Hawaii News Now - KGMB and KHNL

Lawsuit against Kahala Hotel alleges deceptive service charge

John Perkin John Perkin

By Mari-Ela David - bio | email

KAHALA (KHNL) - There's legal trouble at one of Oahu's upscale, luxury resorts. The Kahala hotel gets slapped with a lawsuit for allegedly deceiving its customers into thinking their tips are going to hotel workers.

The suit accuses The Kahala Hotel of failing to tell customers it is pocketing a portion of the service charge, which is tacked on to services like banquets, and room service.

This all started after a couple held a wedding reception at The Kahala last year. The newlyweds paid $15,000 for food and drinks for their guests, plus a 19% service charge, thinking it was tip for the workers.

But they got suspicious and hired attorneys to investigate.

Chopper 8 hovers above one of Oahu's first-class resorts, located on exclusive beach front property. But attorneys John Perkin and Brandee Faria say there is nothing first-class about The Kahala Hotel and Resort's trade practices.

"Somebody who had held a wedding reception at the hotel somehow got wind that there was something hinky about the service charge and so we investigated and lo and behold, they were keeping part of it," said Perkin.

By law, a hotel can keep the service charge, which is tacked on to the cost of food and drink services. But the hotel must tell customers if it is not going to give part or all of the money as a tip to the employees who are actually providing the service.

Faria says The Kahala Hotel failed to do that.

"When you're presented with a service charge, you're led to believe that's money that's paid to service employees. You don't think that this is just extra profit the hotel is putting in its pocket," said Faria.

If they win the case, Perkin and Faria say The Kahala Hotel must pay back triple the amount of the service fee it charged customers the past four years.

A spokesperson for the hotel says it will issue a comment once they get served.

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