Specialist ancillary platforms are morphing
into a Swiss Army Knife. On top of boosting the bottom line, hotels are
discovering a multitude of other purposes, such as alternative ways to increase
guest loyalty, improve reviews and even reposition for new markets.
The most common ancillary is a room
upgrade, and there’s a reason for that: It’s high margin and low friction. For
example, Choice Hotels International’s portfolio of upscale hotels saw a 17%
uptick in upsell revenue per transaction over booked rates using Oracle's Nor1
eStandby Upgrade platform.
Yet ancillaries can encompass so much more, from
scooters and cosmetics to fake paparazzi and room decorations, as a growing
number of hotel operators are finding out.
Ancillary platform Plusgrade
works across several travel industry sectors. Erik Tengen, president of
hospitality upselling, estimates 50% of global ancillary revenue is room
upgrade-related, or based around attributes. Other top sellers
across its 600 hotel partners are activities, which typically includes
transport such as airport transfers.
But hotels are branching out into
ancillaries, a trend that Tengen said has been accelerating over the last
couple of years, because hotels are under pressure to increase revenue as
average daily rates hit a ceiling.
Near the end of last year, Wyndham reported
ancillary revenues increased 18% in the third quarter of 2025
compared to the same period in 2024.
“Our hotels are selling cumulatively north
of 10,000 different types of things,” Tengen said. “So, it's a crazy long tail of
things, as you can imagine.”
He said a property can take two approaches.
They either opt for an “easyJet model” and de-bundle various elements of a
stay, allowing a guest to create their own package, or they can create
“something out of nothing.”
The VIP effect
Tengen, who joined Plusgrade after it acquired his company Oaky in October
last year, said boutique hotel group The House of Gods is a pioneer in the
latter category with its Treat Me Like I'm Famous package.
“When you arrive, they are taking pictures
of you, even taking your autograph. You feel like you're Johnny Depp the whole
stay,” he said. “And the cool thing is, if you go to Tripadvisor and you look
up ‘The House of Gods,’ you'll see this is a reason why people are staying
there now. They've created something out of nothing, which is amazing, and
they're using our platform to position this specific experience.”
In either approach, he urges hotels to
maximize in-house extras because the margins will always be higher.
Local integrations
Ibiza-based startup BookinGuru
helps hotels integrate with local suppliers, and Ben Schleifer, co-founder and
CEO, said the key to its success is offering an agnostic platform.
Rather than talk about ancillaries, he uses
terms like “micro-marketplace” and “circular tourism” to describe the
platform’s ambitions.
“We go to the source, which is the local
knowledge, and we connect it,” Schleifer said.
“I'm working in the hotel. My next-door
neighbor is a service provider. He has the best quality. Why would my guest
want to go to a company in Ireland to book the neighbor?” he argued, observing
the proliferation in experience platforms.
But hoteliers also need to be in tune with
customer demand.
“Some trends surprise me,” Schleifer said.
“For example, in-room cosmetics or prearrival decoration, like a flower
arrangement on the bed. I just didn't know the market is so big there, but the
first people to say it will work well is the hotel: ‘We have this, we want
this, this will work.’”
Scooter hire was an unexpected bestseller
for another hotel. Schleifer said that one hotel, TRS, tripled its overall
commissions in the first year simply by digitalizing their processes through
BookinGuru.
Staying loyal
Oracle has been specializing in hotel
ancillaries since acquiring Nor1 in 2020, and like
BookinGuru says, success depends on focusing on local trends as well as
offering the right deal at the right time.
Between June 2024 and 2025, Oracle's Opera Guest
Engagement and Merchandising powered by Nor1 Prime generated $300 million in
guest upsell demand for hotels, or a 20% lift in upsell revenue.
“We're trying to create a culture of
positive engagement at the individual property level. We're using technology to
empower the teams,” said Jason Bryant, VP of growth strategy at Oracle and
founder of Nor1.
The platform’s reservation screens
automatically generate real-time personalized offers, like amenities and
upgrades, giving a front desk agent more time to interact with guests.
According to Bryant, this then enables hotel staff to
become like a trusted advisor, leading to greater loyalty.
“Whenever I speak to hoteliers, they say:
‘We want to own the guest journey as much as we can, from the point that
someone is dreaming about coming to our destination to the point that they
think about rebooking again.’”
Experiences first
Ancillary and marketing platform Journey
advises hotels to take a step further, and in a similar vein to The House of
Gods, the company urges them to use ancillaries to reimagine a property as a
holistic experience.
Echoing a recent Skyscanner
report suggesting hotels can position themselves as the destination itself, Journey's recent whitepaper, Stay for the Story, highlights how luxury
properties are well placed to build experiences—but everything needs to be
digitized.
“Knowing what spa treatments are being
purchased and what activities are being requested goes a long way towards
incremental improvements from the perspectives of RevPAG and, ultimately, the
reason why guests are choosing your property over all the others in a given
location and willing to pay above-market rates,” argues Adam Mogelonsky, Hotel Mogel Consulting.
Experiences are also on Hyatt’s radar, following its new partnership with Way to
boost its ancillary offerings. Way estimates that consumer spending on
experience surged 65% between 2019 and 2023.
Meanwhile, Airbnb is currently pushing the
marketing message that it’s “not just about the home” amid its renewed experiences push, as chief business
officer Dave Stephenson explained at the Phocuswright Conference last year.
Playing detective
Plusgrade’s Tengen revealed
hotel customers leverage upselling as a research tool to see what guests may or
may not be interested in or even reposition it to a new market. For example, a
beach resort might have a core market of middle-aged Germans as its feeder
market but want to pivot.
“I'm curious, and I want to redo it to find
a different type of traveler, so I'm going to build maybe a beach club,” he
said. “The resort could use prearrival upselling as a way to see how conversion
changes. Are my guests really interested in this?”
As margins tighten and guest expectations
increase, expect to see more hotels channel their creativity when devising and
selling upgrades, shifting ancillaries from simple add-ons to core strategy.