Is boosting ancillary revenue just one more thing on your already packed to-do list? It doesn’t have to be. If you’re already offering extras or promoting additional services, you’re on the right track. And if you’ve started using automation tools to streamline upselling and improve guest spend, even better.
Still, one key opportunity often goes overlooked: factoring ancillary revenue into your pre-booking and pricing strategies. What if you could integrate that potential value earlier in the guest journey? By recognizing and planning for possible add-on sales before guests even arrive, you set the stage for stronger ancillary performance, smarter revenue management – and, ultimately, a measurable increase in TRevPAR.
What Is Ancillary Revenue?
Ancillary revenue refers to income generated beyond room sales. This includes things like food and beverage purchases, spa treatments, meeting room rentals, retail sales, and paid extras such as early check-in or curated in-room amenities.
Selling a few extra breakfasts or spa treatments might seem minor, but those incremental sales can significantly impact your bottom line over time.
Here’s why ancillary revenue matters:
- It diversifies income sources, reducing reliance on room revenue
- It improves profitability, a key driver of TRevPAR
- It enhances the guest experience through personalization and flexibility
Why Ancillary Revenue Should Be Part of Your Broader Strategy
Hospitality is increasingly moving beyond a room-rate-only mindset. More and more hoteliers are embracing total revenue management—a strategy that accounts for every revenue stream across the property.
And it’s working.
Industry data from STR shows that, on average, non-room revenue makes up roughly 32% of total hotel income. While the breakdown varies by property type, areas like F&B, spa, events, and retail represent considerable untapped potential for many operations.
Giving strategic attention to these departments allows you to build a more balanced and resilient revenue model. That’s especially relevant in light of:
- Evolving traveler behavior
- Shifts in booking patterns and guest expectations
- Ongoing market volatility and economic pressures
No matter the reason, the message is clear: it’s time to think beyond room nights and maximize your property’s full earning potential.
Three Ways to Drive Ancillary Revenue and Increase TRevPAR
Whether you start small or implement multiple strategies, here are three effective ways to unlock new revenue opportunities across your hotel:
1. Equip Your Team to Sell Smarter
Your frontline staff are key players in generating ancillary revenue. With the right training and confidence, they can identify guest needs and suggest relevant add-ons in a natural, service-oriented way.
Ongoing training, role-playing, and clear examples of what works can build this skill over time. To keep motivation high, consider launching a simple incentive program—recognizing staff for successful upsells can make a real difference.
2. Automate Upselling and Cross-Selling
Even your most skilled team members can’t engage every guest at every touchpoint. Upselling tools can help scale personalized offers before and during the guest stay, allowing guests to customize their experience on their own time.
This not only boosts conversion but also lightens your team’s workload – improving efficiency while increasing revenue.
3. Use Smart Pricing Tools That Factor in Total Guest Value
Today’s pricing tools are evolving beyond room-focused algorithms. Forward-thinking revenue management systems now consider the broader value of a guest—including likely spend on extras such as dining, spa services, or packages.
By forecasting total booking value instead of just room rates, you can make smarter pricing decisions that reflect real revenue potential across your property.
To boost TRevPAR in 2025, look beyond room rates – strategically integrate ancillary sales into your pricing and guest journey. Leverage automation, empower your team, and use smart tools to unlock hidden revenue and deliver a richer, more profitable experience.
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