Hotels love to talk about occupancy rates, but let’s be honestو filling rooms isn’t enough anymore.
In 2025, rising labor costs, unpredictable demand, and relentless OTA commissions mean even a fully booked property can feel like it’s treading water. The room rate pays the bills, sure, but it rarely builds serious profit.
That’s where ancillary revenue comes in. Think of it as the “hidden engine” behind a hotel’s bottom line — the money you make outside the nightly stay.
And here’s the kicker: according to PwC’s hospitality insights, hotels that lean into ancillary revenue streams see 20 to 30% higher profitability compared to those that don’t. Yet most properties still treat it as an afterthought.
So instead of only competing on rates, smart managers are doubling down on upselling, F&B innovation, tech-driven extras, and personalized services that guests are more than happy to pay for.
This guide will break down what ancillary revenue really is, why it matters in 2025, and 12 proven ways to grow it, so your hotel makes more money without adding more rooms.
What is Ancillary Revenue in Hotels?
Ancillary revenue is the money a hotel makes beyond the room rate. It’s all the “extras” — the add-ons, upgrades, and services that turn a simple stay into a profitable one. For some hotels, ancillary streams account for nearly 40% of total revenue, yet many properties still fail to maximize them. Let’s look at the key categories that drive this income.
1- Food and Beverage (F&B) Revenue
Restaurants, bars, and room service are classic revenue drivers. A strong F&B program doesn’t just feed guests, it creates experiences — think rooftop cocktails, chef’s table dinners, or curated wine pairings. Guests are often willing to splurge here if the offering feels unique.
Beyond the restaurant, hotels can boost revenue with mini-bar sales, breakfast upgrades, and catering for events. With smart menu engineering and portion control, managers can increase margins while keeping guests happy.
2- Upselling and Room Upgrades
A guest might book a standard room, but that doesn’t mean they wouldn’t pay a little more for a sea view, late checkout, or a bigger suite. Upselling taps into the psychology of “treating yourself,” and it’s one of the easiest ways to lift revenue per guest.
Automated upsell tools and pre-arrival emails now make this process seamless. Guests can see available upgrades before check-in, which turns what used to be an awkward front desk pitch into a natural, convenient decision.
3- Wellness and Spa Services
Wellness isn’t a trend anymore, it’s an expectation. Guests are willing to pay for spa treatments, yoga classes, gym memberships, or even wellness-focused packages. These services don’t just generate revenue, they also boost guest satisfaction and loyalty.
Managers who bundle wellness into the booking process — like offering a “Spa & Stay” package — can increase ancillary spend before the guest even arrives. It’s about making wellness part of the stay, not just an optional extra.
4- Events and Meetings Revenue
Business travelers and event planners bring big opportunities. Banquets, weddings, and conferences can generate significant income, especially when paired with catering, AV rentals, and extra services. Hotels with strong MICE (Meetings, Incentives, Conferences, Exhibitions) facilities can turn empty ballrooms into profit centers.
The key here is flexibility. Even smaller hotels without massive event spaces can host intimate gatherings, workshops, or private dining experiences. Every square meter of the property can be monetized with the right offer.
5- Parking, Transportation, and Miscellaneous Services
It may not be glamorous, but parking fees, shuttle services, and luggage storage all add up. Guests value convenience, and they’re willing to pay for it. Charging for airport transfers or premium parking spots is a simple way to generate extra revenue.
Other creative options include laundry services, pet fees, and even eco-friendly add-ons like carbon offset programs. These might seem small, but multiplied across hundreds of guests, they make a serious impact.
6- Tech-Driven Extras
Today’s guests live on their phones, and hotels can monetize that habit. Paid streaming packages, in-room tablets for ordering, or high-speed premium Wi-Fi are simple ways to add incremental revenue.
AI is the next leap forward here. Tools like Bellboy, an AI Voice Agent, let guests request upgrades, order amenities, or book services through natural voice interactions. Instead of waiting in line at reception, a guest can simply speak to Bellboy to extend checkout or reserve a spa session — creating seamless upsells that feel effortless for the guest and highly profitable for the hotel.
Why Ancillary Revenue Matters in 2025
Margins in hospitality have never been thinner. Rising labor costs, global supply chain price hikes, and OTA commissions that eat into every booking mean that depending on room rates alone is a losing game. Even with high occupancy, many properties are finding profits squeezed tighter each year.
That’s where ancillary revenue flips the script. According to McKinsey’s travel research, hotels that prioritize ancillary revenue streams see up to 30% higher profitability compared to those that don’t. These streams not only add income, they also spread risk — when room demand dips, extras like F&B, spa services, or paid experiences keep revenue flowing.
And let’s be honest, guests today expect to pay for convenience and personalization. Whether it’s early check-in after a long flight, ordering food via voice, or booking a last-minute city tour, people value options that make their stay smoother. Smart hotels don’t just offer these services — they design them in ways that maximize both guest satisfaction and profitability.
12 Proven Strategies to Increase Ancillary Revenue
Room rates may keep the lights on, but ancillary revenue is what makes hotels thrive. Here are 12 tried-and-tested strategies that consistently boost income without sacrificing guest satisfaction.
1. Master the Art of Upselling
Upselling works because it taps into a guest’s desire to enhance their stay. Whether it’s a bigger room, a better view, or a late checkout, upgrades are an easy sell when framed as a small step toward comfort or luxury.
Automated pre-arrival emails or app notifications make this process seamless. Guests can choose upgrades at their own pace, which removes the awkwardness of a front desk pitch and increases conversion rates.
2. Cross-Sell Experiences and Services
Guests aren’t just buying a bed, they’re buying a trip. Partnering with local businesses for tours, activities, or transport lets hotels earn commissions while giving guests curated experiences.
Simple touches, like offering tickets to local events or wine tastings, not only generate revenue but also position the hotel as part of the destination rather than just a place to sleep.
3. Turn F&B into a Signature Attraction
Forget generic buffets — creative food and beverage experiences can become a revenue powerhouse. Think themed dining nights, rooftop cocktail hours, or chef-led cooking classes that guests are willing to pay extra for.
Small tweaks also go a long way. Paid breakfast upgrades, specialty coffee bars, or minibar refreshes with locally sourced items all add incremental revenue with minimal effort.
4. Monetize Early Check-In and Late Checkout
Travel schedules rarely align with check-in times, which is why many guests happily pay for flexibility. Offering early check-in or late checkout as a paid option is a simple, high-margin upsell.
This works especially well when automated. Guests can be prompted via SMS, app, or AI Voice Agent (like Bellboy) to extend their stay a few hours for a small fee — a win-win for both sides.
5. Build Wellness Packages
Wellness is one of the fastest-growing hospitality segments. Guests are increasingly willing to pay for spa treatments, yoga sessions, or even guided mindfulness classes as part of their stay.
Hotels that bundle wellness into packages — like “Stay + Spa” or “Detox Weekend” — create more appealing offers that lock in extra revenue before guests even arrive.
6. Optimize Meeting and Event Spaces
Even smaller hotels can monetize event spaces with creative offers. Think private dining, intimate weddings, or co-working packages that cater to modern travelers.
Pairing events with catering and AV rentals significantly boosts ancillary revenue. With the right pricing and flexible packages, even a small ballroom can generate steady income.
7. Charge Smart for Parking and Transport
Convenience is king. Guests don’t think twice about paying for secure parking, valet service, or an airport shuttle that saves them time.
Hotels that manage transport well often see repeat bookings from business travelers who value reliability. Adding premium options like EV charging stations can also open new revenue streams.
8. Use an AI Voice Agent to Upsell in Real Time
Guests don’t always read emails or check apps, but they do respond to voice. Tools like Bellboy, an AI Voice Agent, engage guests naturally during their stay.
Imagine this: a guest calls reception to ask about pool hours, and Bellboy suggests booking a poolside cabana with a food package. It feels helpful, not salesy — and it drives effortless upsells around the clock. Curious? You can book a Bellboy demo here.
9. Rethink the Minibar
The minibar isn’t dead — it’s just overdue for reinvention. Stocking it with local craft beers, artisanal snacks, or wellness-focused drinks makes it more appealing and justifies higher prices.
Dynamic minibars, where guests can request items via app or AI Voice Agent, also give flexibility. Instead of a dusty chocolate bar, you’re offering curated extras that feel worth paying for.
10. Create Loyalty-Driven Extras
Guests in loyalty programs are more willing to spend when they feel they’re getting perks. Offering points for ancillary purchases encourages them to book spa treatments, order room service, or opt for upgrades.
The secret is integration — guests should see exactly how their spend converts to rewards, motivating them to buy more during their stay.
11. Sell Branded Merchandise and Retail
Guests love taking a piece of their stay home. From branded robes to custom toiletries to locally sourced gifts, retail sales can boost revenue and serve as long-term marketing.
Hotels with strong identities — boutique, wellness, or luxury — can build a retail line that fits naturally into the guest experience.
12. Monetize Sustainability
Sustainability isn’t just good PR, it can also drive revenue. Offering carbon offset programs, eco-friendly upgrades (like reusable water bottles), or “green choice” rewards for skipping housekeeping appeals to eco-conscious travelers.
Some hotels even charge a small premium for rooms with eco-certifications or highlight sustainable dining options that cost a bit more. Guests often see this as value, not expense.
Future of Hotel Ancillary Revenue
Ancillary revenue is no longer just about minibars and parking fees. The future belongs to hotels that weave extra services into every stage of the guest journey. In 2025 and beyond, three trends stand out.
First, AI-driven personalization will reshape upselling. Tools like AI Voice Agents — for example, Bellboy — will anticipate guest needs in real time. Instead of blasting generic offers, hotels can make smart, context-aware suggestions: “Would you like a spa slot at 4 p.m. before dinner?” Guests feel seen, not sold to, and hotels capture revenue that used to slip away.
Second, sustainability as a premium will grow. Eco-conscious travelers are willing to pay more for green choices, from carbon-neutral stays to plastic-free minibars. Hotels that position sustainability not as a cost but as a value-add will win loyalty and higher spend.
Third, experience bundling will take off. Guests don’t want to stitch together their own trip — they want packages that combine stay, dining, wellness, and local experiences in one booking. Hotels that master bundling will not only boost ancillary revenue but also keep OTAs from eating into profits.
The bottom line? Ancillary revenue isn’t an afterthought anymore, it’s the future of hotel profitability.
Conclusion: From Side Income to Core Strategy
Room rates will always matter, but they can’t carry the weight of a profitable hotel in 2025. Ancillary revenue is the lever that smart managers pull to grow income, improve guest satisfaction, and build resilience when demand shifts.
The hotels that thrive will be the ones that see every touchpoint as a revenue opportunity — not in a pushy way, but in a way that feels natural, helpful, and personalized for the guest. Whether it’s a late checkout after a long flight, a curated local tour, or a poolside upgrade suggested by an AI Voice Agent, these extras make the difference between breaking even and breaking records.
If you’re ready to see how AI can drive upsells without adding stress to your staff, check out Bellboy, the AI Voice Agent for hotels and book a quick demo here.
