Hotel Ancillary Revenue: What It Is, How It Works and Examples

Selling hotel rooms is just the beginning. While bed and breakfast may be the core business, it doesn’t need to be your only source of income. Many forward-thinking hoteliers are boosting their bottom line through ancillary revenue — a strategic approach that unlocks new income streams while enhancing the guest experience. If you’re looking to drive profitability, improve guest satisfaction, build resilience during low-demand periods, and sell even when you’re “fully booked,” developing a strong ancillary revenue strategy is essential.

What Is Ancillary Revenue in Hotels?

Ancillary revenue refers to the income hotels generate from services and products that enhance or go beyond the core offering of room bookings. These might include everything from spa treatments and in-room upgrades to transportation services and personalized guest experiences.Simply put, it's any non-room revenue that increases the value of each guest’s stay — and boosts your earnings at the same time. 

Why Ancillary Revenue Matters

Ancillary revenue is a financial bonus and a strategic asset. Here’s why it’s a powerful part of modern hotel operations:

• Diversifies income and cushions against dips in room occupancy.
• Maximizes revenue per guest through personalized upsells.
• Strengthens brand value with unique guest experiences.
• Boosts key metrics like ADR, RevPAR, and TRevPAR.
• Enables agile marketing, targeting different traveler segments with curated offerings.
• Builds resilience to market fluctuations (like during the pandemic or off-peak seasons).
  Discover how to capture every dollar—from F&B to spa—in our guide: Beyond RevPar: What Is TRevPar And How To Optimize It.
  
  

  Examples of Ancillary Revenue in Hotels

  To bring this concept to life, here are practical examples of ancillary revenue streams hotels are successfully leveraging:
  
• Room Upsells and Premium UpgradesRoom upselling is one of the most effective and immediate ways to generate ancillary revenue. Guests are often willing to pay more for an enhanced experience — especially when the upgrade is positioned as adding comfort, exclusivity, or celebration value.
• Suites for Special Occasions: Offer upgrades to honeymoon suites, corner rooms with panoramic views, or executive-level suites for guests celebrating milestones like anniversaries, birthdays, or engagements.
• Adjoining Rooms for Families: Families traveling together often need extra space — and are happy to pay for convenience and privacy. Promoting connected rooms or family packages can easily increase per-night revenue.
• Higher Floors or Scenic Views: Guests appreciate unique vistas, whether it's a city skyline, beachfront sunrise, or mountain backdrop. Highlighting corner rooms, upper floors, or balcony access can drive easy upgrades.
• Early Check-in / Late Check-out: Time is valuable, and many guests are willing to pay a premium for a little extra flexibility in their schedule.
  By presenting these upgrade options at check-in — especially with personalized messaging — you can unlock additional revenue while delivering a better, more tailored guest experience.
  

  More Examples of Ancillary Revenue in Hotels

Food & Beverage: On-site restaurants, rooftop bars, or in-room dining can significantly boost spend-per-guest. Creative upsells like wine tastings or chef-curated menus drive both revenue and loyalty.

Spa & Wellness Services
From full-service spas in resorts to third-party partnerships in smaller hotels, wellness offerings are a high-value ancillary category. The perfect add-on for guests after a long journey, or those who check-in saying there are here to ‘relax.’
Transportation Services
Shuttle services, airport pickups, and even bike rentals enhance convenience — and open up new revenue channels.
Event & Meeting Spaces
Banquet halls and boardrooms can serve everything from corporate meetings to weddings — and provide high-margin revenue.

How to Boost Ancillary Revenue at Your Hotel

Offer Customization & Upgrades
Allow guests to enhance their stay by offering upgraded rooms or experiences. Personalization leads to higher satisfaction — and higher spend.
Incorporate Upsell Tech

Maximize ancillary revenue by partnering with Frontline Performance Group (FPG). Our performance enhancement tool connects seamlessly with your PMS to empower front-desk staff to confidently offer room upgrades and premium add-ons that boost both revenue and guest satisfaction. FPG's system combines intuitive technology with tailored training, helping teams build genuine guest rapport, use strategic language, and uncover needs that lead to profitable upsells.
Hotels using IN-Gauge have seen RevPAR increases of 3–6%, and up to 10% in some cases—all while elevating service standards and employee engagement. It’s a low-overhead, high-margin way to turn everyday interactions into meaningful revenue and exceptional experiences.

If you'd like to learn more in our handy guide read: How to Upsell Hotel Rooms 5 Strategies That Work.

The Big Picture: Ancillary Revenue Is the Future of Hospitality

In an industry where margins can be thin and demand can fluctuate, ancillary revenue offers a stable, scalable way to boost profitability. It transforms your property from a simple place to stay into a comprehensive experience that guests will pay more for — and remember longer.Whether you run a boutique hotel, a resort, or a city-center property, the potential for ancillary income is vast. And as guest expectations evolve, so too must the way we deliver and monetize value.
Want to start building your ancillary revenue strategy? Start small with one new offering, test it with guests, and scale up based on results. Remember: every added service is an opportunity to deepen guest engagement — and elevate your revenue.

If you would like to find out more, you can request a free revenue assessment click here.