{"id":1163,"date":"2026-08-17T16:30:07","date_gmt":"2026-08-17T14:30:07","guid":{"rendered":"https:\/\/torreshospitalityconsulting.com\/?p=1163"},"modified":"2026-08-17T16:30:09","modified_gmt":"2026-08-17T14:30:09","slug":"when-the-adr-is-stretched-ancillary-revenue-is-your-fastest-lever-for-hotel-profitability","status":"publish","type":"post","link":"https:\/\/torreshospitalityconsulting.com\/en\/2026\/08\/17\/when-the-adr-is-stretched-ancillary-revenue-is-your-fastest-lever-for-hotel-profitability\/","title":{"rendered":"When the ADR is stretched, ancillary revenue is your fastest lever for hotel profitability"},"content":{"rendered":"

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<\/strong>.<\/p>\n\n\n\n

A recent benchmarking update published by Hospitality Net<\/a> (from Duetto\/HotStats) shows that Europe's overall GOP margin is sitting around 37% year-to-date<\/strong>, 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%)<\/strong>.<\/p>\n\n\n\n

That \u201cflat margin\u201d story is where ancillary revenue stops being a \u201cnice-to-have\u201d and becomes a profit strategy<\/strong>.<\/p>\n\n\n\n

The margin squeeze is real<\/h3>\n\n\n\n

The same report highlights cost pressure lines that operators feel every day:<\/p>\n\n\n\n

    \n
  • Labour costs<\/strong>: up ~5% across Europe, ~4% in Spain.<\/li>\n\n\n\n
  • Undistributed costs<\/strong> 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.<\/li>\n<\/ul>\n\n\n\n

    So even when rooms revenue holds up, profit doesn't automatically follow<\/strong>. That's why the conversation has to move from RevPAR to total revenue + flow-through<\/strong>.<\/p>\n\n\n\n

    Ancillary revenue is where hotels regain control<\/h3>\n\n\n\n

    Rooms are (in many markets) close to a ceiling: rate resistance, channel costs, and demand shifts make it hard to push ADR forever.<\/p>\n\n\n\n

    Ancillary revenue is different because it lets you:<\/p>\n\n\n\n

      \n
    1. Increase spend per guest<\/strong> without relying only on rate.<\/li>\n\n\n\n
    2. Distribute demand across the property<\/strong><\/li>\n\n\n\n
    3. Build higher-margin revenue streams<\/strong> (if & when executed with discipline).<\/li>\n<\/ol>\n\n\n\n

      The HotStats data makes this tangible: \u201cSpend beyond the Room\u201d is explicitly called out: wellness, spa, memberships, health club, and conference & banqueting are all part of the profitability equation.<\/p>\n\n\n\n

      A detail I found particularly telling: spa treatment revenue per occupied room (POR) softened slightly<\/strong> (from ~\u20ac8.4 to ~\u20ac8.0), while Membership fees and health club revenue grew<\/strong> (from smaller bases). Translation: guests are still spending, but the mix is changing<\/em>, and hotels that don't track and adapt will miss the upside.<\/p>\n\n\n\n

      The operational blind spot: \u201cWe offer it\u201d \u2260 \u201cWe sell it\u201d<\/h3>\n\n\n\n

      Many hotels have<\/em> ancillaries (spa, parking, late check-out, upgrades, cabins, meeting spaces, experiences)\u2026 but leave results to chance.<\/p>\n\n\n\n

      The fix is to engineer ancillaries across the guest journey<\/strong>not just at check-in.<\/p>\n\n\n\n

      One framework I like (and that modern PMS\/RMS thinking reinforces) is to create upsell moments at five points: booking \u2192 pre-arrival \u2192 arrival \u2192 during stay \u2192 post-stay<\/strong>.<\/p>\n\n\n\n

      If you only depend on reception at arrival, you're basically choosing \u2155 <\/strong>of all opportunities.<\/p>\n\n\n\n

      4 practical moves that lift profitability (not just revenue)<\/strong><\/p>\n\n\n\n

      1) Build an \u201cancillary menu\u201d that's easy to buy<\/h3>\n\n\n\n
        \n
      • Limit to 8\u201312 high-impact items (clarity sells).<\/li>\n\n\n\n
      • Write them like products: benefit-led, specific, priced, with scarcity if real (limited slots, peak hours).<\/li>\n<\/ul>\n\n\n\n

        2) Price like revenue management, not like a brochure<\/h3>\n\n\n\n
          \n
        • Use attribute-based pricing<\/strong> for what guests actually value (view, location, space, quiet floors, early check-in\/late check-out).<\/li>\n\n\n\n
        • Bundle smartly: upgrades + breakfast, spa + dinner, parking + fast-track check-in.<\/li>\n<\/ul>\n\n\n\n

          3) Track the right KPIs. Examples for SPA:<\/h3>\n\n\n\n
            \n
          • SRevPOR<\/strong> (Spa Revenue per Occupied Room): Are you monetizing the in-house base?<\/li>\n\n\n\n
          • RevPATH<\/strong> (Revenue per Available Treatment Hour): Are you using spa capacity profitably?<\/li>\n\n\n\n
          • ATR<\/strong> (Average Treatment Rate): Are you trading up or discounting?<\/li>\n\n\n\n
          • Therapist productivity<\/strong> (utilization + revenue\/hour): Is scheduling aligned to demand?<\/li>\n\n\n\n
          • GOPPATH<\/strong> (Gross Operating Profit per Available Treatment Hour): Are you growing profit<\/em>not just top line?<\/li>\n<\/ul>\n\n\n\n

            (If you're not measuring at least 3\u20134 of these consistently, you're managing by vibes.)<\/em><\/p>\n\n\n\n

            4) Train + incentivize teams (this is where most programs win or die)<\/h3>\n\n\n\n

            Ancillary revenue is a people game<\/strong> dressed up as a pricing game.<\/p>\n\n\n\n

            What works in practice:<\/p>\n\n\n\n

              \n
            • Micro-training<\/strong> (15\u201320 minutes\/week): 1 product, 1 script, 1 objection, 1 upsell moment.<\/li>\n\n\n\n
            • Recognition loops:<\/strong> daily leaderboard + weekly shout-outs. Simple, but it changes behavior quickly.<\/li>\n<\/ul>\n\n\n\n

              <\/p>","protected":false},"excerpt":{"rendered":"

              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. TO [\u2026]<\/span><\/p>","protected":false},"author":5,"featured_media":1164,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-1163","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/posts\/1163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/comments?post=1163"}],"version-history":[{"count":1,"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/posts\/1163\/revisions"}],"predecessor-version":[{"id":1165,"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/posts\/1163\/revisions\/1165"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/media\/1164"}],"wp:attachment":[{"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/media?parent=1163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/categories?post=1163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/torreshospitalityconsulting.com\/en\/wp-json\/wp\/v2\/tags?post=1163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}