The Ancillary Revenue Playbook: What Hotels Can Steal From Airlines (And What They Can’t)

IdeaWorksCompany’s 2026 Yearbook of Ancillary Revenue landed with a number that should have every hotel commercial director sitting up straight: across the airlines it tracks, ancillary revenue grew 13.4% in 2025, while total revenue grew just 7.2%. Nearly twice the pace – and not for the first time. Global airline ancillary revenue is now a projected $157 billion, up from $67.4 billion a decade ago, and it represents 15.7% of total industry revenue, more than double its 9.1% share in 2016. Thirty airlines each cleared a billion dollars in ancillary revenue last year alone. That is not a rounding error buried in the annual report. It is a second business, built quietly on top of the first.

I spent the best part of two decades inside Wyndham and Starwood watching distribution economics shift under our feet, and the parallel here is hard to ignore. Hotels sit on exactly the same raw material airlines used to build this second business: a product with attributes that can be unbundled and sold separately, a guest willing to pay for the right upgrade at the right moment, and a loyalty base that – in theory – should be worth real money to a financial partner. So why does hotel non-room revenue still get treated as a footnote on the P&L rather than a growth strategy in its own right? This piece pulls apart the principles behind the airline “miracle,” is honest about where hotels can copy the playbook outright and where they genuinely can’t, and sets out a clear playbook covering both the ancillary revenue tied directly to the stay and the auxiliary revenue that sits around it.

Airlines didn’t stumble into $157 billion of extra revenue. They built it on six deliberate moves, each worth understanding before we talk about hotels.

Unbundling the base fare. Baggage, seat assignment, priority boarding, onboard food – all once included, all now sold separately. Basic economy fares exist specifically to mimic the low-cost carrier price floor, and paid seat assignment has now overtaken checked baggage as the most common add-on in the booking path.

Dynamic, personalised pricing. Ancillaries aren’t priced once and left alone. Delta prices SkyMiles award seats the same way it prices cash fares – a route can swing from 25,000 to 110,000 miles between a quiet Tuesday and a peak Friday. The same demand curve now governs both the seat and the currency used to buy it.

Merchandising at the point of sale. Frontier and Spirit each present ten à la carte items in their booking path; Ryanair offers five bundled fares and nine add-ons. Presentation is not decoration here. It is the mechanism.

Attribute-based selling. IATA’s push toward New Distribution Capability and ONE Order is the industry-wide effort to sell individual attributes at continuously optimised prices, rather than forcing everything into a handful of fixed fare classes. Around 80% of airlines with a stake in Offers and Orders already run live NDC channels.

Loyalty as the crown jewel. This is the one hotels most need to sit with. Delta’s SkyMiles programme is valued at $31.78 billion – more than American’s AAdvantage or United’s MileagePlus – and Delta booked $8.2 billion from American Express alone in 2025, on a trajectory toward $10 billion by 2029. Loyalty and co-brand cards now account for roughly 40 to 50% of ancillary revenue at the big US network carriers. It isn’t a nice-to-have loyalty scheme. It’s a bank-funded financial business wearing an airline’s livery.

Partnerships beyond the core product. Car rental, hotel commissions, travel insurance, inflight retail – Ryanair lists all of it under ancillary revenue. Airlines learned early that they don’t have to build every adjacent product themselves. They just have to own the customer relationship and take a cut.

Here’s the part that should reassure rather than intimidate: hotels are not starting from zero. Non-room revenue already represents close to a third of total US hotel revenue, and 49% of hotel executives now expect that share to grow over the next three years, up from just 23% in 2021. CBRE has been talking about Total Revenue Management – TRevPAR over RevPAR – for exactly this reason.

IHG’s guest reservation system, built with Amadeus, is already enabling attribute-based upselling across more than 6,000 hotels, with an average uplift of $40 per upsell in Luxury and Lifestyle and $20 in Essentials and Suites. Marriott has rolled attribute-based booking out to around 2,000 properties, deliberately surfacing what its digital chief calls “hidden gems” – corner rooms, balconies, the inventory that generic room-type booking simply hides. A genuine vendor ecosystem has grown up around this: Oaky, Nor1, ROOMDEX, Canary Technologies. Oracle’s Nor1 research suggests digital upselling lifts ancillary revenue by 15 to 25%, with an average accepted upgrade of $37.53. None of this is theoretical. It’s live, and it’s working.

Don’t you think it would be a little too easy if the fix were simply “install upsell software and wait”? It isn’t, and pretending otherwise does the industry no favours.

The single biggest structural difference is distribution. Airlines sell most seats through channels they control, directly or via NDC. Hotels still lose more than half of online bookings to OTAs, at effective commission rates that EHL Insights puts at 30 to 40% once visibility fees are included – and, crucially, OTAs mostly cannot merchandise room attributes at all. The upsell moment simply doesn’t exist on most third-party booking pages.

Second, there is no hotel equivalent of NDC or ONE Order – no unified offer-and-order standard. Airlines built toward this over years of industry-wide coordination through IATA. Hotels are working through fragmented PMS, CRS and channel-manager stacks that were never designed to price attributes continuously.

Third, and most uncomfortably: the loyalty economics simply aren’t there yet. The five largest hotel groups earned a combined $1.1 billion from loyalty in 2023. The four largest US airlines earned $27.9 billion from frequent-flyer programmes in 2025 alone. That is not a gap you close with a better app. It is a gap you close by rethinking what the loyalty programme is actually for.

The direct copy from the airline playbook is attribute-based selling, and it works. But there’s a next step most hotels haven’t taken yet: the attributes worth selling at the point of booking don’t have to stop at floor, view and bed type.

This is where a wellness or lifestyle credit – bundled and sold as a bookable attribute alongside the room itself – starts to look a lot like a seat assignment fee. It’s optional, it’s priced, it’s presented at the moment of highest intent, and it converts a guest’s existing appetite for a better stay into revenue the hotel would otherwise have left on the table. It’s exactly the kind of curated, invite-only brand matching that BrandMatch is building toward: a marketplace connecting luxury hotels with wellness and lifestyle partners, so that a spa credit, a nutrition partnership or an in-room wellness product becomes a genuine line item in the booking flow, not an afterthought discovered at check-in. Built around the TRevPAG framework – Total Revenue Per Available Guest – it’s the same logic IHG and Marriott are applying to room attributes, extended to the brand attributes sitting just outside the room.

If attribute-based selling is the direct copy, partnerships are where hotels need to build their own version of the airline model rather than borrow it wholesale. Airlines didn’t develop car rental or travel insurance in-house. They partnered, took a commission, and let someone else carry the product risk.

This is precisely the gap BrandMatch exists to close. Where airlines have decades of established commission relationships with car-hire and insurance providers, hotels have historically treated wellness and lifestyle brand partnerships as one-off sponsorship deals rather than a structured, repeatable revenue line. An invite-only marketplace that matches luxury hotels with vetted wellness and lifestyle brands turns that ad hoc arrangement into something closer to the airline model: a curated set of partners, a commercial structure, and a measurable contribution to total revenue per available guest – rather than per available room. It won’t replace the $27.9 billion loyalty economics gap overnight. But it is a legitimate, structured way to build the “partnerships beyond the core product” principle into hotel commercial strategy, using exactly the kind of brand-matching infrastructure the airline model has relied on for years.

Pulling this together, here’s where I’d start:

1. Unbundle deliberately. Move to branded room fares – a transparent base rate plus paid attributes – rather than ad hoc surcharges.
2. Automate the upsell. Deploy dynamic upsell technology (Oaky, Nor1, ROOMDEX or similar) across pre-arrival, check-in and in-stay touchpoints.
3. Price attributes continuously. Invest in revenue management technology capable of dynamic attribute pricing, not just base room rates.
4. Extend attributes beyond the room. Bundle curated wellness and lifestyle partner credits as bookable add-ons, the way BrandMatch is structuring for luxury properties.
5. Measure total revenue, not room revenue. Adopt TRevPAR, RevPOR and attachment-rate metrics, and align incentives to them.
6. Treat loyalty as a financial business. Negotiate co-brand card economics aggressively, and be realistic about the ceiling versus airline loyalty.
7. Build a structured partnership marketplace. Formalise wellness, lifestyle, dining and experience partnerships as a commercial revenue line rather than a courtesy tie-up.
8. Reclaim the direct channel. Every point of direct booking share is a point of merchandising control taken back from the OTA.

Airlines didn’t build a $157 billion second business by accident, and they didn’t build it overnight. They built it by unbundling deliberately, pricing dynamically, merchandising relentlessly, and treating loyalty and partnerships as genuine commercial businesses rather than marketing line items. Hotels have most of the same raw materials already. The question isn’t whether the opportunity exists – the data says it does, and it’s growing. The question is whether your commercial strategy is structured to capture it, or whether it’s still sitting on the table for someone else to take.

Let’s look at where your property sits on that spectrum – and what the fastest three moves would be.

Main sources:

Airline ancillary revenue data

• IdeaWorksCompany, “2026 Yearbook Shows Ancillary Revenue Grows Nearly Twice as Fast as Overall Airline Revenue” – https://ideaworkscompany.com/tag/loyalty/
• IdeaWorksCompany, “Mission Possible: Airlines Earn Record Ancillary Revenue While Consumers Enjoy Lower Fares” (Global Estimate press release) – https://ideaworkscompany.com/mission-possible-airlines-earn-record-ancillary-revenue-while-consumers-enjoy-lower-fares-press-release/
• Aircraft Interiors International, “Airlines’ ancillary revenues are growing twice as fast as total revenues” – https://www.aircraftinteriorsinternational.com/news/industry-news/airlines-ancillary-revenues-are-growing-twice-as-fast-as-total-revenues.html
• The Wise Marketer, “Basic Economy and Ancillary Revenue Drive Airline Profits in 2024” – https://thewisemarketer.com/basic-economy-remakes-the-airline-business-consumers-pay-more-to-avoid-air-travel-misery/
• DWU Consulting, “Airline Ancillary Revenue: Structure & Scale” – https://dwuconsulting.com/dwu-ai/airline-ancillary-revenue
• View from the Wing, “United Airlines Makes $11.5 Billion From Extras” – https://viewfromthewing.com/united-airlines-makes-11-5-billion-from-extras-but-paying-more-doesnt-mean-youre-getting-more/

Loyalty economics

• PRNewswire / On Point Loyalty, “Delta’s SkyMiles Ranked World’s Most Valuable Airline Loyalty Program at $31 Billion” (Top 100 Most Valuable Airline Loyalty Programs 2026) – https://www.prnewswire.com/apac/news-releases/deltas-skymiles-ranked-worlds-most-valuable-airline-loyalty-program-at-31-billion-302729282.html
• CBRE, “Hotel Loyalty Programs: Betting on the Law of Large Numbers” – https://www.cbre.com/insights/articles/hotel-loyalty-programs-betting-on-the-law-of-large-numbers
• CBRE, “Hotel Loyalty Programs Continue to Prove Their Value: Key findings from 675 million members” – https://www.cbre.com/insights/articles/hotel-loyalty-programs-continue-to-prove-their-value-key-findings-from-675-million-members
• The Globe and Mail, Marriott (MAR) Q4 2025 Earnings Call Transcript – https://www.theglobeandmail.com/investing/markets/markets-news/motley/133463/marriott-mar-q4-2025-earnings-call-transcript/

Distribution standards and regulation

• IATA, “Fulfilment with Orders (ONE Order)” – https://www.iata.org/en/programs/airline-distribution/retailing/one-order/
• Federal Trade Commission, “Federal Trade Commission Announces Bipartisan Rule Banning Junk Ticket and Hotel Fees” – https://www.ftc.gov/news-events/news/press-releases/2024/12/federal-trade-commission-announces-bipartisan-rule-banning-junk-ticket-hotel-fees

Hotel attribute-based selling

• PhocusWire, “IHG bookings from own channels hit 80%” – https://www.phocuswire.com/ihg-loyalty-program-attribute-based-selling
• PhocusWire, “Why attribute-based selling is gaining momentum” – https://www.phocuswire.com/why-attribute-based-selling-gaining-momentum