Maximizing revenues for your hotel in this age of lower occupancies and ADRs is the smart thing to do. Many hoteliers are struggling to create the internal processes and systems to successfully sell ancillary services.

To begin with, the revenue opportunities are gigantic from both core "hotel" ancillary products: room upgrades, early check-in, late check out fees, etc. and "non-hotel" ancillary revenue from selling insurance, tickets to museums, theme parks and theaters, concerts and sporting events, etc.

Hoteliers need to study and copy the airlines' mastery for generating ancillary revenues "out of thin air": in 2019 the airlines' ancillary revenue grew to $64.8 billion from $28.5 billion in 2014. Some airlines like Allegiant Airlines in Las Vegas, Nevada generate as high as 40% of their total revenue from auxiliaries.

Linchi Kwok
Linchi Kwok
Professor at The Collins College of Hospitality Management, Cal Poly Pomona

I agree that hotels need to be more creative to generate more revenues. Therefore, I am adding a few alternative options to the list:  

  1. Secured and high-speed internet options for a fee (e.g., a tier pricing strategy), tailoring to the work-from-home travelers
  2. Resort or destination fees, which became more common even before the pandemic hit
  3. Parking fees. In some cases, that may also give travelers a sense of security. 
  4. On-demand grab-n-go breakfast/lunch, with two to three options/prices. 
  5. On-demand in-room happy-hour packages, with either a set menu or a simple checklist menu. 
  6. A coupon book for local businesses with a fee, similar to an AAA coupon book at shopping malls.   
  7. On-demand in-room fridge and microwave.  
  8. On-demand grocery items, with limited options on a checklist. 

View all 8 views in this viewpoint