US hotel Union Street Guest House fines guests $500 per bad review

What is the cost of giving a bad review? According to one US hotel, it's $US500 ($A537).

Union Street Guest House, a boutique New York hotel in Hudson, New York, has threatened to charge guests hundreds of dollars if they post a negative review about their stay.

The policy outlines that a couple looking to book a wedding at the hotel will have a fine deducted from their deposit for every negative review the hotel receives from any of their wedding guests.

Guests who stay at the hotel to attend a wedding in the area will also be fined if they post a bad review.

It is not clear why the policy applies to a specific class of guests – wedding guests and wedding parties – and not all guests staying at the hotel. There is speculation that the hotel was aiming to manage its reputation following a few bad reviews by wedding guests and parties.

The policy, which has since been removed from the hotel's website, is reported to have read: "There will be a $500 dollar fine that will be deducted from your deposit for every negative review of USGH place on any internet site by anyone in your party and/or attending your wedding even if you stay here to attend a wedding anywhere in the area and leave us a negative review on any internet site you agree to a $500 fine for each negative review." 

Additionally, the hotel said it will refund the fine if the negative review is removed. 

The $US500 has outraged web users with many taking to the hotel's Facebook page and hotel review site Yelp to vent their spleen.

"If you don't want bad reviews, provide amazing service. Having a policy that fines people for expressing their opinion of the service is unbelievable. The Internet is not controlled by your organization. Any guest willing to stay here with this policy in place is ignorant of the policy or stupid," Marty B. From Chicago posted on Yelp, where the hotel has received a 1 out of 5 rating.

Julio Laliberte posted to Facebook: "Holy cow! What an epic screw up!!! The way to avoid negative reviews is to provide excellent service, not penalize negative reviews. I don't know whether to laugh or feel sad for the place."

This is the latest incident in a long-running spat over user-generated reviews of hotels by sites, such as Yelp and TripAdvisor. Earlier this year, Italy's competition watchdog conducted an investigation into TripAdvisor after complaints from consumers as well as hotels and restaurants over 'fake reviews'.

The Italian Competition Authority published a document suggesting TripAdvisor may have published reviews made by people who had not actually been to the places they rated.