The hidden revenue hack hotels are using to end the year strong

Recent reports from major hotel groups highlight declining results amid economic uncertainty. Tourism-dependent properties are seeing shrinking bookings, unpredictable weather and fewer travelers. But amid these challenges, one revenue driver is quietly gaining traction: gift cards and experience vouchers.

These pre-paid offerings have become a strategic tool for hotels, yet many have been keeping their cards close to chest. With the global gift card market projected to reach $1.3 trillion by 2029, the opportunity is clear. Last year, one luxury property generated seven figures in gift card sales during the two-month holiday period alone.

Pre-paid purchases to profit

Unlike room bookings, gift cards generate immediate cash flow, giving hotels working capital before any service is delivered. Hospitality tech provider Hospitality Solutions reports an average order value of $613 per gift card transaction.

Gift cards also benefit from the “breakage” effect: Many are never fully redeemed, adding directly to profit margins with no additional labor or cost. Estimates suggest around 47% of gift cards go unredeemed, with the average value of $244 representing almost $23 billion in potential revenue. 

Even when redeemed, gift cards often drive extra spend. A Capital One Shopping research study found 61% of consumers spend more than the card’s value.

Experiences drive engagement

In today’s experience economy, 92% of consumers prefer experiential gifts over physical ones. Monetary gift cards add another layer of personalization, allowing recipients to choose their own experience.

Hotels can capitalize on this trend by offering curated packages, such as spa retreats, gourmet dining and wellness programs, without creating new services. Existing offerings are easily monetized, turning casual gift buyers into paying guests and first-time visitors into loyal patrons.

Gift cards are among the top items on consumer wish lists, desired by one in two consumers, with seasonal peaks during Mother’s Day, Valentine’s Day and the December holidays driving additional demand. 

Corporate gifting also presents a significant opportunity. Companies purchase gift cards in bulk to reward employees or clients, sustaining sales outside traditional peak periods. In fact, Hospitality Solutions reports that 23% of gift card orders come from corporate sales, with orders starting to rise in August ahead of the festive season.

Seasonality meets strategy

A well-timed campaign can make a significant difference. One luxury hotel launched an omnichannel push in early December 2024, promoting gift cards online and in-property. The result: over $100,000 in sales within the month. 

Another hotel reported that more than 50% of its total 2024 gift card revenue occurred during the festive season in December, underscoring the seasonal potential of this channel.

Hospitality Solutions’ data confirms this trend: On average, over 40% of annual gift card sales happen in November and December. The intensity of holiday shopping is particularly notable, with roughly 20% of sales occurring in the 48 hours between December 24 and 26. 

Extending the holiday boost

Gift cards do more than boost holiday revenue; they generate income well into the following months. Redemptions often extend into the first quarter, giving hotels an early-year financial lift, with 56% of gift cards often redeemed within the first 180 days of purchase.

Beyond immediate redemptions, gift cards attract 64% first-time visitors, many of whom can become repeat guests, driving additional foot traffic and creating opportunities for upselling.

Some hotels amplify this effect with bonus credit promotions for both buyers and recipients. For example, spend $500 and receive a $50 gift card. These programs create a cycle of repeat business, encourage return visits and strengthen loyalty—helping hotels keep revenue flowing long after the holiday season.

The secret of smart revenue managers

Relying solely on bookings is no longer enough. Gift cards are a high-margin, low-overhead tool that can transform a hotel’s revenue strategy.

Hotels that invest in a robust gift card program now are positioning themselves to capture holiday demand, drive incremental revenue and build lasting guest relationships that extend well beyond December.

When planned early and paired with marketing campaigns, analytics and insights, gift cards can elevate year-end performance and generate consistent incremental income throughout the year.

For hotels looking to maximize revenue and capitalize on gifting opportunities all year round, Hospitality Solutions’ Gift Cards & Vouchers provides an end-to-end solution to launch, brand and sell both digital and physical gift cards across multiple channels.