As service charges become more common in Malta’s restaurant sector, db Group has said its decision to introduce the practice was primarily aimed at addressing what it describes as the island’s “inconsistent culture of tipping” and improving earnings for restaurant staff.

The hospitality group said to WhosWho.mt that all restaurants within its portfolio have introduced a 9.5 per cent discretionary service charge. Its restaurant brands include Manta, Tora, Hard Rock Café, LOA, AMAMI, AKI, Tatel, EL&N, and Al Kasbah, among others.

“Our main objective was to tackle the island’s inconsistent culture of tipping, which was leaving workers in Malta worse off than their counterparts abroad and making it harder for us to attract and retain the best talent,” a db Group spokesperson told Who’sWho.mt.

The group said it wanted to standardise the system so that employees could earn more while being directly rewarded for the quality of service provided.

“The better service they provide, the more likely the service charge is to be accepted and the more likely customers are to return, tip extra and spend more,” the spokesperson said.

Service charges began attracting greater public attention in Malta in August, as restaurants started adding a percentage or additional fee to customers’ bills.

The practice has prompted debate over both the additional cost to consumers and how clearly customers are informed about the charge before ordering.

Despite the wider controversy, db Group said it has not observed a negative impact on its restaurants since introducing the 9.5 per cent charge.

“The response has been very positive. Rather than seeing any negative impact on business, we have continued to see strong growth, repeat business and positive feedback from customers, particularly about the quality of service across our establishments,” the spokesperson said.

According to the group, the system has also resulted in higher earnings for employees.

“Their income has increased considerably and they feel more directly responsible for ensuring that customers feel the service charge is justified,” it said, adding that the system is intended to reward good service in a more consistent and transparent manner.

db Group stressed that its service charge is discretionary and can be removed from a customer's bill.

The group said customers are informed about the charge through its websites, menus and reservation process before dining.

“We understand the concerns that have been raised, and we believe customers are right to expect three things: That they are informed about the service charge in advance, that it is genuinely discretionary and can be removed, and that the amount collected for staff goes to the staff,” the spokesperson said.

According to db Group, the 9.5 per cent charge is VAT-inclusive. After VAT, the equivalent of eight per cent of the bill is allocated to employees and distributed through what the group described as a transparent system.

The amount forms part of employees’ declared income and is therefore subject to the applicable income tax.

“If a customer does not wish to pay it, it can be removed,” the group said.

Consumer authorities stress advance disclosure

The Malta Competition and Consumer Affairs Authority (MCCAA) had told Malta Today that restaurants are obliged to clearly inform customers of applicable service charges before they place an order.

“Consumers should be clearly informed of any applicable service charge before placing their order, so that they are aware of the total charges that may apply and can make an informed decision,” an MCCAA spokesperson previously told the newspaper.

The authority said this also applies to charges described as discretionary or optional, warning that failing to disclose an additional charge beforehand may raise concerns under rules governing unfair commercial practices.

The issue gained public attention after former minister Roderick Galdes shared a restaurant receipt on Facebook showing a €6.92 service charge added to a €72.80 subtotal, bringing the final bill to €79.72.

Mr Galdes likened the practice to Italy’s “coperto” system – traditionally a fixed per-person cover charge associated with costs such as table settings, cutlery, glasses and napkins.

The MCCAA has confirmed receiving a “small number of requests for information” from consumers on the issue, while the Association for Consumer Rights Malta has called for authorities to actively monitor the trend and for restaurants to disclose service charges across menus, online booking platforms and advertising.

A website has also since been launched to alert consumers to restaurants applying service charges.