A theme I'm seeing more and more in performance data across Europe is simple: revenue is still growing, but profit is getting harder to protect.
A recent benchmarking update published by Hospitality Net (from Duetto/HotStats) shows that Europe's overall GOP margin is sitting around 37% year-to-date, broadly flat vs. last year, even as revenues move up. In Spain specifically, TRevPAR is up ~3% and GOPPAR ~4% YTD, but GOP margin is basically unchanged (~41%).
That “flat margin” story is where ancillary revenue stops being a “nice-to-have” and becomes a profit strategy.
The margin squeeze is real
The same report highlights cost pressure lines that operators feel every day:
- Labour costs: up ~5% across Europe, ~4% in Spain.
- Undistributed costs are still elevated (commissions, utilities). For example, credit card commissions and Sales & Marketing expenses are notably higher than pre-pandemic levels in the Spain snapshot.
So even when rooms revenue holds up, profit doesn't automatically follow. That's why the conversation has to move from RevPAR to total revenue + flow-through.
Ancillary revenue is where hotels regain control
Rooms are (in many markets) close to a ceiling: rate resistance, channel costs, and demand shifts make it hard to push ADR forever.
Ancillary revenue is different because it lets you:
- Increase spend per guest without relying only on rate.
- Distribute demand across the property
- Build higher-margin revenue streams (if & when executed with discipline).
The HotStats data makes this tangible: “Spend beyond the Room” is explicitly called out: wellness, spa, memberships, health club, and conference & banqueting are all part of the profitability equation.
A detail I found particularly telling: spa treatment revenue per occupied room (POR) softened slightly (from ~€8.4 to ~€8.0), while Membership fees and health club revenue grew (from smaller bases). Translation: guests are still spending, but the mix is changing, and hotels that don't track and adapt will miss the upside.
The operational blind spot: “We offer it” ≠ “We sell it”
Many hotels have ancillaries (spa, parking, late check-out, upgrades, cabins, meeting spaces, experiences)… but leave results to chance.
The fix is to engineer ancillaries across the guest journeynot just at check-in.
One framework I like (and that modern PMS/RMS thinking reinforces) is to create upsell moments at five points: booking → pre-arrival → arrival → during stay → post-stay.
If you only depend on reception at arrival, you're basically choosing ⅕ of all opportunities.
4 practical moves that lift profitability (not just revenue)
1) Build an “ancillary menu” that's easy to buy
- Limit to 8–12 high-impact items (clarity sells).
- Write them like products: benefit-led, specific, priced, with scarcity if real (limited slots, peak hours).
2) Price like revenue management, not like a brochure
- Use attribute-based pricing for what guests actually value (view, location, space, quiet floors, early check-in/late check-out).
- Bundle smartly: upgrades + breakfast, spa + dinner, parking + fast-track check-in.
3) Track the right KPIs. Examples for SPA:
- SRevPOR (Spa Revenue per Occupied Room): Are you monetizing the in-house base?
- RevPATH (Revenue per Available Treatment Hour): Are you using spa capacity profitably?
- ATR (Average Treatment Rate): Are you trading up or discounting?
- Therapist productivity (utilization + revenue/hour): Is scheduling aligned to demand?
- GOPPATH (Gross Operating Profit per Available Treatment Hour): Are you growing profitnot just top line?
(If you're not measuring at least 3–4 of these consistently, you're managing by vibes.)
4) Train + incentivize teams (this is where most programs win or die)
Ancillary revenue is a people game dressed up as a pricing game.
What works in practice:
- Micro-training (15–20 minutes/week): 1 product, 1 script, 1 objection, 1 upsell moment.
- Recognition loops: daily leaderboard + weekly shout-outs. Simple, but it changes behavior quickly.
