(This article originally appeared in Entrepreneur)
Opinions expressed by Entrepreneur contributors are their own.
Can you guess what a “porterage fee” is? No, don’t Google it. Just take a guess. I couldn’t guess. I’ve never heard of it. But I wound up paying it — $25 — during a recent stay at a resort hotel in Hawaii with my wife.
In addition to the $359 daily room rate (and the $62.53 for general, excise, county and — ready? — a localized “transit accommodation tax”) I was also charged a daily $5 “housekeeping” and $50 “resort fee” and, of course, the one-time $25 “porterage” fee.
When I asked at check-in what the “porterage fee” was for, I was told it was the fee for taking our luggage to our room. One hotel (not the one I stayed at) defines it as “a fee that may be given to a group or individual guest for the use of a doorman and bellboy. This fee is commonly given to large groups in hotels, hotels with unions and resort hotels where a gratitude is automatically charged to a guest through a porterage fee.” Ahhhh…mystery solved.
No matter that my wife and I each had just one suitcase which we simply wheeled ourselves to our room. Or that we had absolutely no use of a bellboy or doorman. Oh, and we declined the housekeeping for all but one of the days we stayed. None of this makes a difference. The hotel still charged us these extra fees and we had no choice.
Hotels are notorious for this stuff. Even as they cut back on services, reduce the number of towels, discontinue the little shampoo bottles and eliminate the free morning coffee service many still like to charge extra fees for early check-in, additional persons, a spare cot, Wi-Fi, parking, use of the gym….and now there’s “porterage.” Love it.
Actually, I don’t love it. And neither should you. If you’re running a small business like I do, here’s some advice: Don’t adopt this practice.
I’m sure you’ve got extra things you’d like to bill to your customers, just like the hotels. Maybe you’d like to tack on an overhead charge. Or a shipping and handling fee. Maybe you want to bill extra for administrative time. During the height of the pandemic some restaurants — and dentists — tried to charge extra for the protective equipment they used. Some retailers I know charge a fee for when a credit card is used — or they give a discount for cash, which is the same thing. Some businesses add on extra fees for activation and setup of a service, removals, service changes and no-shows.
Indiscriminately charging extra fees is a bad model. Why? Because it makes people angry. They get told a price is one thing and then it winds up being something higher — in my hotel’s case a LOT higher — and you are hostage to the fleecing, because what am I going to do, fly back to Philly? My hotel will charge me a “cancellation fee.” And my airline of course will be ready to charge me a “change fee” and then for bags, carry-ons, snacks and a seat with a cushion!
I’m not sure why the hotel and even some airlines still insist on layering on a bunch of extra fees on top of their room fee. I don’t understand why some businesses also do this. Some people think that listing out all of their fees demonstrates transparency. What they don’t realize is that customers don’t really care about the details. They just care about what they’re ultimately paying. And what they’re told upfront is what they expect to pay. When that number changes because a business is being “transparent” as they indiscriminately add extra fees it only causes confusion and anger. Rather than being open and honest, the practice actually comes across as a bit unethical.
The bottom line for your business is this: Don’t do what my hotel did. Figure out all of your costs and charge a single price. Period. Don’t tack on extra fees unless a customer has requested additional services or products. And even then, tread carefully. People don’t like to feel like they’re being taken advantage of. That’s the way I felt at the hotel in Hawaii. Frankly, I’m still feeling it.
