Ancillary revenue used to be simple: breakfast, parking, upgrades. Easy to explain, easy to justify.
Today, ancillary is evolving into something more sophisticated (and sometimes more controversial): micro-products embedded into the journey, designed to monetise certainty, convenience, speed, and risk reduction; often in a single tap.
This week I bumped into two examples that perfectly frame the debate:
- OTAs turning luggage disruption into a checkout add-on
- Hotels experimenting with charging for what many consider a courtesy (umbrellas)
They look similar (“another fee”), but they’re actually two different models of modern ancillary: monetising risk vs monetising hospitality moments.
Case study #1: Selling peace of mind at checkout (OTAs + luggage disruption)
A piece circulating via Yahoo Finance described how OTAs are integrating “luggage disruption” products into the booking flow. An option you can add at checkout, promising a guaranteed payment if checked baggage doesn’t arrive within a defined time window (commonly referenced as 96 hours).
Why this matters: This isn’t just an extra product. It’s a new category of ancillary (risk monetisation, same as travel insurance) and OTAs love it for three reasons:
- It’s easy to merchandise. A clear “what if” scenario + a clear outcome converts well at checkout. No one wants to read insurance terms mid-booking.
- It’s high-margin, low-operational friction for the seller. The service delivery is pushed to a partner, while the OTA keeps the booking flow and the attachment opportunity.
- It turns disruption into revenue. And that’s where the ethical line appears: guests will accept paying for peace of mind… up to the point it feels like we’re profiting from broken systems.
Case study #2: When a courtesy becomes a transaction (umbrella rentals in hotels)
The second example came from a recent personal experience at a Hotel in Amsterdam. The post on Linkedin (over 15,000 views + more than 100 interactions) shows that it’s a sensible topic: an automated umbrella rental where you tap your card and pay €2 for 48 hours (roughly the average stay), and if you keep it, it’s €20.
The comments were exactly what you’d expect—and that’s the point. The umbrella isn’t just a product; it’s a brand moment:
- Luxury voices said “no-go: just lend it” (or at most, handle it via PMS notes / deposit logic).
- Lifestyle/premium operators noted it can work when it matches expectations and is frictionless.
- Others reframed it as sustainability: fewer cheap umbrellas bought-and-ditched, more sharing, less waste.
There’s also a broader “umbrella-as-a-service” model floating in hospitality circles: pay a small fee for 48h, return via a tracked system, and the product is designed to last (sometimes with a sustainability hook like planting a tree).
Why this matters: This is the other side of ancillary evolution: monetising micro-conveniences.
And micro-conveniences are dangerous if they touch “hospitality DNA.” The guest’s brain doesn’t judge an umbrella like minibar snacks. It judges it like care.
- If it feels like help → guests smile
- If it feels like monetising courtesy → guests remember it (and not in a good way)
So… how far is ancillary going?
Further than most teams realise; and not just in volume, but in philosophy:
- From “add-ons” → to micro-products
- From “extra services” → to certainty, speed, and risk protection
- From “front desk upsell” → to automated, embedded, 1-click checkout
The winners won’t be the hotels/brands that charge for the most things. They’ll be the ones that choose the right moments to monetise without damaging trust.
The Ancillary line test (3 questions)
Before launching any new paid add-on, I’d run this quick filter:
- Is the value exchange obvious in 5 seconds? If the guest needs a paragraph, you’ll buy complaints with your revenue.
- Does it reduce friction or create friction? Automation can be a gift… or a cold interaction if it replaces care.
- Is this aligned with our segment promise? Luxury sells “effortless care.” Lifestyle can sell “pay-per-use convenience.” Same product, totally different perception.
3 Actions to take this week
- Audit your “courtesy moments.” List 10 small items/services you currently give away (umbrellas, water, adapters, gym access, late checkout “sometimes”). Decide which ones are brand-defining (keep free), which are cost-heavy (deposit model), and which can be monetised without harming sentiment.
- Build a simple “attach rate vs complaint rate” dashboard. Every ancillary should be tracked beyond revenue: attachment %, margin, refunds, and complaint/sentiment signals. If you can’t measure the downside, you’ll only see the upside…until it’s too late.
- Move one ancillary upstream, but ethically. Pick a single add-on that genuinely solves a pain point and test offering it earlier in the journey (pre-arrival, booking engine, app). Transparent pricing, clear value, one-click purchase.
