When you book a Ryanair flight, the base fare is almost irrelevant. The money is in seat selection, priority boarding, checked baggage, travel insurance, hotel cross-selling, car rental. The "product" is the chassis. Everything else is the margin.<\/p>\n\n\n\n
Hotels have had the same opportunity in front of them for years. And yet, in most properties, the minibar is full of items no one buys, the spa operates at 40% capacity, and the reception staff still ask, "Would you like to upgrade?" the same way a fast-food cashier asks, "Would you like fries?"<\/p>\n\n\n\n
That is changing, faster than most of the industry realizes.<\/p>\n\n\n\n
A few months ago, PhocusWire published an article that got me thinking. The headline talked about ancillary technology "transforming the stay experience." Fair enough. But the interesting part was the detail.<\/p>\n\n\n\n
Erik Tengen (now President of Hospitality Upselling at Plusgrade, and someone whose work I know well from my role at Oaky) described how specialized ancillary platforms have evolved from single-purpose upsell engines to what he called a "Swiss Army knife." Hotels are discovering that these tools don't just generate incremental revenue. They improve online reputation, build loyalty, and help properties reposition themselves for entirely new guest segments.<\/p>\n\n\n\n
That's a significant change in how we think about the ROI of this technology.<\/p>\n\n\n\n
The data backs it up. Wyndham reported an 18% increase in ancillary revenue in Q3 2025 compared to the same period in 2024. Oracle's Nor1 platform generated $300 million in upsell demand among its partner hotels between June 2024 and 2025, a year-over-year increase of 20%. Choice Hotels saw a 17% increase in upsell revenue per transaction using the same platform.<\/p>\n\n\n\n
These aren't rounding errors. It's a revenue stream that most hotels still treat as secondary.<\/p>\n\n\n\n
Here's a figure that should make any revenue strategist uncomfortable: approximately 50% of global ancillary revenue is still related to room upgrades.<\/p>\n\n\n\n
Think about what that means. The industry has had access for years to upselling platforms, pre-arrival communication tools, AI-powered personalization engines, and dynamic pricing for ancillaries. And yet, collectively, we continue to sell room upgrades as our primary lever.<\/p>\n\n\n\n
Upgrades are great. High margins, low friction, easy to automate. But they represent the floor of what's possible, not the ceiling.<\/p>\n\n\n\n
Airport transfers. Spa packages. Selected local experiences. Menus tailored to dietary preferences, booked in advance. Late check-outs with dynamic pricing based on demand. The ancillary long tail is extraordinary. Erik mentioned that Plusgrade's partner hotels collectively sell more than 10,000 different types of services.<\/p>\n\n\n\n
Most hotels sell maybe a dozen.<\/p>\n\n\n\n
The most useful framework I've seen for thinking about ancillary strategy comes from that same PhocusWire article. It described two distinct approaches hotels are taking:<\/p>\n\n\n\n
The easyJet model: breaking down the stay. Letting guests build their own package by adding components individually: parking, breakfast, early check-in. Price transparency. Clear add-on logic. Efficient.<\/p>\n\n\n\n
The "something out of nothing" model: creating experiences that didn't exist before. The example that stuck with me was the boutique hotel group The House of Gods and its Treat Me Like I'm Famous package. Guests arrive and are greeted by photographers taking pictures and asking for autographs. They feel like celebrities throughout their stay.<\/p>\n\n\n\n
That package didn't require capital investment. It required imagination and execution.<\/p>\n\n\n\n
Both models work. But they serve different properties, different brands, and different guest profiles. The strategic question isn't which model is better. It's: which one are you truly capable of consistently executing?<\/p>\n\n\n\n
I want to address something here, because I've seen it repeated in too many properties.<\/p>\n\n\n\n
The hospitality industry tends to frame underperforming ancillary services as a technology problem. Get the right platform, connect it to your PMS, automate your campaigns, and watch the revenue roll in.<\/p>\n\n\n\n
It's not that simple; because technology is a multiplier, not a substitute. If your front office team doesn't believe in upselling, Front Desk Upsell automation won't save you. If your operations team can't fulfill a spa reservation made three days before arrival, the pre-arrival campaign will hurt you. If your revenue manager and your F&B director are still working on separate spreadsheets, your TRevPAR will never reflect what your property is truly capable of generating.<\/p>\n\n\n\n
Hotels that achieve 18-20% increases in ancillary revenue don't just use better tools. They've built a business culture around total guest value, where every department understands that the room booking is the beginning of the revenue conversation, not the end.<\/p>\n\n\n\n
That culture doesn't come from implementing software. It comes from looking at leadership, training, and a clear business strategy.<\/p>\n\n\n\n
This is what's interesting about all of this: the market is still early.<\/p>\n\n\n\n
Despite the platforms, despite the data, despite PhocusWire publishing articles on the subject, ancillary revenue remains one of the most underutilized levers in hospitality. Small and medium-sized properties, especially in Europe, still haven't integrated upsell strategies into their pricing and operations in a structured way.<\/p>\n\n\n\n
What about the 40% of total revenue that ancillaries can represent in a full-service property? Most independent hotels generate only a fraction of that.<\/p>\n\n\n\n
That's not a technological failure. It's a gap in strategy, training, and execution.<\/p>\n\n\n\n
So, if you're wondering where the consulting and training opportunities are in this market... it's right there.<\/p>\n\n\n\n