Hotel Ancillary Revenue: What Works

When revenue managers discuss ancillary revenue, the conversation often stays vague. "We should be doing more upselling" lacks the specificity needed to set targets, allocate resources, or measure progress. The question that matters is: how much ancillary revenue per guest should your property be generating, given its type, location, and star rating?

This article sets out what counts, how it differs by hotel type and where the gaps usually are, so you can measure your own and identify the gaps worth closing.

Defining Ancillary Revenue in Hotels

What Counts as Ancillary

For benchmarking purposes, ancillary revenue includes all non-room revenue that can be influenced by proactive selling or digital offers. This includes:

• Room upgrades: The difference between the booked rate and the upgrade price paid
• F&B: Restaurant, bar, minibar, room service, and pre-booked dining packages
• Spa and wellness: Treatments, packages, and facility access fees
• Convenience services: Early check-in, late checkout, parking, airport transfers
• Activities and experiences: Tours, classes, excursions (whether operated in-house or through partners)
• Other: Laundry, business centre, event space rental, retail

What is excluded: group and events revenue booked through sales teams, conference package F&B, and any revenue from long-term leases or concessions. The goal is to isolate revenue that can be directly influenced by upselling technology and processes.

Benchmarks by Hotel Type

City Business Hotels (3-4 Star)

City business hotels typically have limited spa facilities and smaller F&B operations. Their ancillary strength lies in convenience services and room upgrades.

• Primary revenue drivers: Room upgrades, early and late checkout, parking, F&B (largest first)

The gap between average and top performers is significant. The main differentiator is not the availability of services, it is whether the hotel actively sells them through digital channels before and during the stay.

Resort and Leisure Properties (4-5 Star)

Resorts have the broadest ancillary revenue opportunity because they operate spa, multiple F&B outlets, activities, and have wider room category spreads.

• Primary revenue drivers: F&B, spa, room upgrades, activities, convenience

At a resort level, take an example 200-room resort at 75% occupancy: the difference between€30 and €70 per room night in ancillary revenue is over €2 million annually. This is not a rounding error. It is a strategic revenue stream that warrants dedicated attention.

Boutique and Independent Hotels (4-5 Star)

Boutique properties often outperform larger hotels on a per-guest basis because their guest profile skews toward experience-seekers willing to spend on curated add-ons.

• Primary revenue drivers: Curated experiences, F&B, room upgrades, convenience

The boutique advantage is personalisation. Smaller properties can offer more tailored add-ons (private cooking classes, local guide experiences, personalised minibar) that command premium pricing. The trade-off is that these experiences often require more operational effort per transaction.

Economy and Limited-Service Hotels (2-3 Star)

Limited-service hotels have fewer ancillary products to sell, but the opportunity is not zero.

• Primary revenue drivers: Room upgrades, parking, early and late checkout, F&B and vending

For economy hotels, room upgrades and convenience services are the primary levers. The volume is high (more rooms, higher occupancy rates), so even small per-guest increases translate to meaningful annual revenue.

Where the Revenue Gaps Are

The Digital Upselling Gap

The single largest gap between average and top performers is the adoption of digital upselling tools. Many hotels still leave upselling to the front desk and in-room collateral.

WhizzCRM addresses this gap by automating pre-arrival offers based on guest segmentation and live inventory. The guest appetite for add-ons already exists. The constraint was always the delivery mechanism, not the demand.

The F&B and Spa Pre-Selling Gap

Most hotels wait until the guest arrives to sell spa and dining. By that point, the guest may have already booked a restaurant through an external platform or decided to skip the spa entirely. A pre-arrival offer gives the guest a reason to say yes before they have made other plans, rather than leaving the sale to chance during the stay. For a deeper look at this opportunity, see our digital upselling guide for spa and F&B.

The Repeat Guest Gap

Repeat guests know the property, trust the quality, and are more open to recommendations. Yet most hotels offer the same generic upsell communication to first-time and repeat guests. Jumeirah Zabeel Saray grew upsell revenue 340% over six months. For more on this dynamic, see our article on the repeat guest revenue multiplier.

Setting Your Ancillary Revenue Targets

A Realistic Framework

Rather than aiming for the top immediately, set progressive targets:

1. Baseline (Month 1): Measure your current ancillary revenue per occupied room night accurately. Many hotels are surprised to find they do not track this metric consistently.
2. Phase 1 (Months 2-4): Implement digital pre-arrival upselling with room upgrades and 2-3 convenience add-ons. Set a target from your own baseline.
3. Phase 2 (Months 5-8): Add F&B and spa pre-selling, expand to WhatsApp delivery. Compare results with your baseline.
4. Phase 3 (Months 9-12): Introduce dynamic pricing, guest segmentation, and personalised offers. Keep measuring against your baseline.

This phased approach is more sustainable than trying to launch everything simultaneously. Each phase builds the data, processes, and organisational buy-in needed for the next.

Ancillary revenue benchmarks are not academic exercises. They are the difference between a hotel that generates, for example, €10 per room night in extras and one that generates €40. Both hotels may have the same facilities. The difference is whether they proactively sell what they already have. For a real-world example, see the Jumeirah upselling case study, and to estimate the ancillary revenue potential for your specific property, use our WhizzAudit.