Ancillary revenue: 9 ways hotels can drive revenue

While occupancy drives the basics, savvy hoteliers know that true profitability comes from maximizing every guest interaction, well beyond the nightly stay.

That’s where ancillary revenue becomes a key.

By offering value-added services, upgrades and local experiences, you can unlock additional income streams that boost additional revenue per available room.

From spa treatments to in-room amenities and beyond, ancillary revenue helps diversify profits and enhances the guest experience.

In this blog post, we outline nine practical ways you can drive ancillary revenue, turning everyday revenue opportunities into meaningful growth.

Whether you’re aiming to increase guest satisfaction or improve your bottom line – or ideally both – tapping into ancillary revenue is the way forward.

What is ancillary revenue?

Ancillary revenue refers to the income hotels generate from additional services and offerings beyond the basic room rate.

Think of it as the ‘extra’ that guests pay for, so everything from breakfast buffets to spa treatments and airport transfers.

While room revenue remains a core pillar of the hotel industry, ancillary revenue can significantly boost your hotel’s total profitability, especially in competitive or low-occupancy periods.

For many properties, it can represent anywhere from 10% to 30% of total revenue, depending on location, amenities and guest profile, so it should be factored into your hotel budget season.

When approached strategically, ancillary offerings not only enhance guest satisfaction but unlock untapped revenue potential.

How ancillary revenue supports hotel profitability

Sometimes underestimated in revenue management, hotel ancillary revenue plays a critical role in boosting profitability by elevating both revenue per available room (RevPAR) and revenue per occupied room (RevPOR).

While room rates cover the basics, it’s the extras – dining, spa treatments, room upgrades and other services – that can turn a modest booking into a high-value transaction

By increasing guest spend without significantly increasing operating costs, ancillary revenue improves margins and drives more value from each stay.

This kind of revenue also provides resilience during low-demand periods. Even if occupancy dips, strong ancillary offerings help maintain cash flow.

Plus, personalized upsells and unique experiences can improve guest satisfaction and loyalty, leading to repeat business.

If you want your hotel to differentiate itself, a smart ancillary strategy can enhance brand perception, attract new market segments and create new income streams, all without relying solely on room sales.

9 Amenities and value adds that increase ancillary revenue

The most effective way to boost ancillary revenue is by enriching the guest experience and thinking beyond the overnight stay.

Guests are willing to spend more when offered convenience, comfort or something memorable, especially when those extras feel personalized.

Don’t overlook local residents, either; they may not need a room but could be drawn to your spa, restaurant, event space or curated experiences.

By expanding your offering and thinking creatively about how to serve both in-house and local guests, your hotel can unlock new ancillary revenue streams.

Let’s explore nine proven amenities and value-adds that help drive ancillary income.

1. Room upgrades

Offering paid room upgrades is one of the most direct and effective ways to increase ancillary revenue.

Whether it’s a larger room, a better view or added amenities, many guests are willing to pay more for a superior experience, especially at check-in or via pre-arrival emails.

Success depends on timing and presentation: gently nudge guests with clear, appealing upgrade options and price them dynamically based on demand.

This strategy works particularly well during periods of low occupancy or when premium rooms would otherwise sit empty. It not only boosts revenue but also enhances guest satisfaction by giving them more control over their stay.

2. On-site dining

On-site restaurants and bars are powerful drivers of ancillary revenue, especially when positioned as more than just a convenience.

Offering distinctive menus, locally inspired cuisine or signature cocktails can attract not only hotel guests but also local patrons.

To maximize impact, you should promote dining options at check-in through in-room materials and via guest messaging platforms.

Offering dining credits as part of package deals or loyalty perks can also encourage guests to spend more, a strategy that’s especially valuable for full-service hotels or properties in high-footfall areas, where food and beverage outlets can become profitable hubs that elevate both revenue and the overall guest experience.

3. Spa services

An on-site spa can significantly boost ancillary revenue by offering guests a premium, wellness-focused experience.

From massages to facials and beauty treatments, spa services cater to both leisure and business travelers seeking relaxation.

To succeed, ensure spa offerings are well-marketed – both online and in-room – and consider bundling treatments with overnight stays or loyalty rewards.

This strategy works especially well for resort-style or upscale urban hotels, where guests expect elevated amenities. Even limited-service hotels can partner with local providers for pop-up or appointment-based offerings.

A thoughtfully run spa not only adds revenue but also enhances guest satisfaction and retention.

4. Transportation

Transportation services – such as airport shuttles, local transfers or car rentals – can be a strong source of ancillary revenue while adding convenience for guests.

To implement this successfully, you can either operate your own fleet or partner with reputable providers on a commission or flat-rate basis.

Make sure you clearly promote transport options on your website, in confirmation emails and at check-in.

This strategy is especially effective for airport hotels, resorts or properties in locations with limited public transport.

By offering reliable, bookable transportation, hotels can tap into additional spend, enhance the guest experience and differentiate themselves in competitive markets.

5. Laundry and dry cleaning

Offering laundry and dry cleaning services can provide a steady stream of ancillary revenue, especially in urban hotels, business-focused properties or extended-stay accommodations.

To implement this successfully, ensure services are clearly listed in guest directories, booking confirmations and in-room signage. You can manage laundry in-house or outsource to a trusted local provider.

Offering express service for a premium can further boost earnings.

This amenity is particularly valuable for guests attending events, traveling for business or staying multiple nights, turning a basic necessity into a profitable convenience while enhancing overall guest satisfaction.

6. In-room amenities

In-room add-ons are a tried-and-tested way to boost ancillary revenue by creating convenient, personalized experiences that guests are willing to pay extra for.

These offerings transform the room into a mini revenue center, especially effective in properties where guests spend significant time in their rooms, such as resorts, extended-stay hotels or boutique accommodation.

So don’t forget to highlight and elevate these amenities on your website.

Common revenue-generating in-room amenities include:

• Mini bars with snacks, soft drinks, wine or spirits

• Premium coffee machines or tea assortments

• Room service or on-demand dining

• Pay-per-view movie rentals or streaming subscriptions

• Curated welcome baskets (e.g. local treats, wine, wellness kits)

• Late check-out or early check-in options

• In-room spa or wellness kits

To implement this strategy successfully, ensure your pricing is transparent and clearly communicated at check-in, on in-room menus and within your booking engine.

Personalization also helps, so offer options aligned with guest profiles or with the purpose of their booking.

This strategy works well year-round but especially during peak leisure seasons or event-heavy periods when guests are more likely to indulge and spend more during their stay.

7. Local activity partnerships

Partnering with local businesses – like tour operators, restaurants, museums or wellness providers – allows you to offer curated packages or exclusive guest discounts, driving ancillary revenue while enhancing the guest experience.

These partnerships not only generate commission or referral fees but increase your property’s appeal as a local hub.

To implement this strategy successfully, build relationships with reputable partners, ensure the offerings align with your guests’ interests, and integrate them seamlessly into the booking journey or front desk upselling.

This approach works especially well for leisure travelers, weekend stays or properties in culturally rich or activity-driven destinations where guests seek local experiences.

8. Product sales

Selling popular in-room products – such as branded linens, signature toiletries, local snacks or the coffee served in-room – offers a smart way to boost ancillary revenue while deepening guest engagement.

Guests often want to take home a piece of their experience , so offering these items for purchase turns their stay into an extended brand relationship.

To implement this successfully, highlight products in-room and at reception, drive guests to your gift shops – off- and online, offering QR codes that link to the latter – and train staff to upsell.

This strategy is especially effective for boutique or lifestyle hotels with distinctive amenities that guests may not easily find elsewhere.

9. Space rentals

Renting out meeting rooms, event spaces or even outdoor areas can be a powerful way to generate ancillary revenue, especially during off-peak periods.

From corporate conferences and workshops to weddings and community events, these rentals provide a steady income stream that’s not tied to overnight stays.

To implement successfully, promote availability on your website and through local partnerships, offer flexible packages (including catering or AV support) and ensure your staff are trained in event coordination.

This strategy works particularly well for urban and mid-to-large hotels with adaptable spaces that appeal to both business and leisure audiences year-round.

Best practices for sustainable ancillary revenue growth

To build sustainable ancillary revenue, start by focusing on a few high-impact initiatives rather than trying to do everything at once.

Prioritize based on your property’s strengths, guest preferences and operational capacity. Conducting guest research – through surveys, feedback or booking data – can help identify which amenities or services will resonate most and drive additional spend. Such insight ensures your efforts are strategic, not scattergun.

Automation tools play a crucial role in scaling your ancillary revenue strategy efficiently.

For example, automated upselling during booking or check-in can boost room upgrades or add-on sales with minimal staff effort. Similarly, integrating point-of-sale and guest management systems simplifies tracking and managing ancillary purchases, improving operational efficiency.

Regularly monitor performance metrics and guest feedback to refine offerings over time. This iterative approach helps avoid wasted investment and ensures ancillary services evolve alongside guest needs, supporting lasting revenue growth without sacrificing the quality of the guest experience.

Strengthen hotel revenue streams and maximize profitability

While growing ancillary revenue can significantly boost hotel profits, it’s not a standalone solution and is, of course, just one of a great many revenue management strategies.

Over-reliance on ancillary sales without optimizing core revenue streams – like room rates and occupancy – may limit overall profitability. So for the best results, you should combine ancillary revenue tactics with broader strategies such as dynamic pricing, cost control and targeted marketing.

This balanced approach strengthens all revenue channels, maximizing long-term profitability and business resilience.