The Ancillary Revenue Revolution: How IHG and Accor are Rewriting Hotel Economics

The hotel industry is undergoing a fundamental revenue model transformation, with ancillary services shifting from supplementary income to strategic priority. U.S. hotel ancillary revenue reached $18.9 billion in 2022 (up from $13.3 billion in 2019), growing at a 10.2% CAGR— and 85% of hoteliers now expect ancillary services to become a primary revenue driver by 2025.

This isn’t press release fluff: over $500 million in venture and private equity funding flowed into hotel ancillary technology in 2024 alone, including two new unicorns (Mews and Lighthouse). The most aggressive innovators—IHG, Accor/Ennismore, and Wyndham—are outpacing competitors with explicit ancillary revenue targets and new partnership models that challenge the traditional room-centric business.

Hotel companies announced an unprecedented volume of ancillary partnerships in 2023-2025, concentrated in EV charging, wellness technology, outdoor accommodations, and in-room entertainment. The data reveals clear patterns in who is partnering with whom and where investment is real versus promotional.

EV charging emerged as the largest partnership category by scale

Every major hotel company announced significant EV infrastructure partnerships:

• Hilton + Tesla (September 2023): Up to 20,000 Tesla Universal Wall Connectors across 2,000 hotels in North America—the largest planned EV charging network in hospitality
• IHG + EnviroSpark (March 2024): All 4,100+ IHG-branded hotels in U.S. and Canada
• Choice Hotels + Tesla (February 2024): 41% of Cambria hotels expected to have EV charging by end of 2024
• Marriott + EV Connect (September 2023): Named “preferred” EV charging provider for U.S. and Canada
• Ionity + Village Hotel Club (November 2024): 380 ultra-rapid charging points (350 kW) across 33 UK locations

Wellness partnerships moved from spa-only to in-room digital content

The $1.8 trillion global wellness market attracted hotel companies to digital wellness partnerships:

• Hilton + Calm (January 2025): Exclusive partnership integrating meditation content into 2,400+ hotels via Connected Room technology
• Hyatt + Headspace: Complimentary mindfulness content through World of Hyatt app plus 30-day free trials
• Tempo by Hilton + Thrive Global: “Power Up/Power Down” in-room wellness rituals designed with Arianna Huffington’s behavior change platform
• Marriott + Aescape: Robotic AI-powered massage technology at select Ritz-Carlton and W properties
• Equinox Hotels + Dr. Matthew Walker: AI-enabled rooms adjusting lighting/sound based on sleep science

Sleep technology became a differentiator for luxury properties

Smart mattress company Bryte emerged as the dominant sleep technology partner across luxury hotels:

• Current deployments: Park Hyatt New York, Waldorf Astoria Monarch Beach, Four Seasons Los Angeles, Rosewood Miramar Beach
• May 2024: Partnership with Fullpower-AI for sleep biosensing (apnea detection, cardiovascular metrics)
• Nollapelli sleep-optimised sheets now deployed at Fairmont, Park Hyatt, and Lake Nona Wave Hotel

Outdoor accommodations saw acquisition-level investment

Major chains entered glamping/alternative accommodations through partnerships and acquisitions rather than organic brand development:

• Marriott + Postcard Cabins (December 2024): Full acquisition of 29 properties/1,200+ tiny cabins, anchoring new “Outdoor Collection by Marriott Bonvoy” launching 2025
• Marriott + Trailborn (December 2024): Long-term agreement for 559 rooms near national parks
• Hilton + AutoCamp (February 2024): Exclusive partnership for boutique glamping near national parks
• Hyatt + Under Canvas (August 2024): Exclusive partnership through Mr & Mrs Smith platform

Not all ancillary categories are equally mature. Analysis of investment activity, technology adoption, and revenue data reveals which categories have genuine traction versus limited real-world deployment.

High traction categories backed by verified investment

Food & Beverage remains the largest non-room revenue contributor, accounting for 20-40% of full-service hotel revenue. At lifestyle hotels like Ennismore’s The Hoxton Southwark, F&B generates 30% of total revenue with coworking adding another 30%. However, F&B profit margins declined from 32% (2018) to 22% (2023) due to labour costs, creating pressure for operational innovation.

Upselling technology attracted the most venture capital, with Canary Technologies raising $50 million in 2024. Hotels report up to 250% increases in ancillary revenue with automated upselling platforms. The average upsell value during online check-in is $48 (Mews data), with 6% conversion rates generating 0.84% increases in total revenue flowing directly to gross operating profit.

Spa and wellness showed verified growth of 12.6% revenue increase from 2018-2022 (STR data), with Agilysys acquiring spa software Book4Time for $150 million in 2024. Spa services now contribute 3.4-4.2% of total hotel revenue at luxury properties.

Parking and transportation emerged as the highest-margin ancillary category, with 80%+ profit margins. STR data confirms parking revenues “gained substantially since 2019.”

Moderate traction categories still developing

Local experiences and tours partnerships are growing but remain fragmented. Hotels increasingly partner with Viator, GetYourGuide, and local operators, but technology integration challenges limit scale. Commission structures typically run 10% for guest referrals.

In-room entertainment streaming is transitioning but revenue models remain unclear. While Hilton integrated Netflix into 1,800+ hotels and DIRECTV Hospitality partnered with Google TV, hoteliers initially hesitated due to loss of pay-per-view ancillary revenue.

Pet services are growing alongside the $143 billion U.S. pet industry, with Moxy Hotels launching enhanced dog-friendly packages (April 2024), HotelPlanner acquiring PetsWelcome.com (December 2024), and Mars Petcare partnering with Tripadvisor for pet-friendly hotel ratings.

The hotel ancillary revenue trend shows consistent growth supported by investment activity, industry sentiment, and company disclosures—this is not cyclical hype.

Volume and investment metrics confirm acceleration

• U.S. hotel ancillary revenue: $18.9 billion (2022) up from $13.3 billion (2019)—10.2% CAGR
• Ancillary revenue attribution technology market: $2.1 billion globally (2024), projected to reach $5.8 billion by 2033 (13.2% CAGR)
• 2024 hotel tech M&A/investment activity: Lighthouse raised $370 million Series C (reaching unicorn status), Mews completed €101 million plus 4 acquisitions, StaynTouch raised $48 million
• Non-room revenue share: Now accounts for nearly one-third of total revenue for U.S. hotels (AHLA)

Industry sentiment data is strongly directional

According to Skift Research:

• 85% of hoteliers expect ancillary services to become a primary revenue driver by 2025
• 49% of hoteliers believe unique upselling strategies are critical to financial success
• Hotels using advanced retailing platforms report $300 average additional spend per booking
• Top performers projected to exceed $1 million in non-room revenue annually

CBRE identified Total Revenue Management (TRM) as one of four critical 2024 industry trends, noting that “revenue management principles can transcend room operations, unifying and optimizing all revenue sources.”

Geographic growth rates favour Asia Pacific

The ancillary revenue attribution technology market shows regional variation:

• North America: Market leader (~$820 million in 2024), mature technology adoption
• Europe: $600 million market size, 12.5% CAGR projected through 2033
• Asia Pacific: $420 million but fastest growth at 15.8% CAGR, driven by China’s reopening and India’s hotel expansion

Concrete financial data on ancillary value exists but varies significantly by hotel segment, category, and strategic commitment.

Segment-level revenue contribution benchmarks

Category-specific contribution data

Spa revenue at U.S. hotels averages 3.4-4.2% of total revenue (CBRE 2024 data from 297 hotels), with Revenue Per Occupied Room increasing 27.7% from 2018-2022. Massage services account for 60-75% of spa revenue and treatments.

Attribute-based selling shows strong incremental value: IHG reports luxury/lifestyle room attributes command $40/night premiums, while Amadeus claims attribute features can add 12% to ADR—representing $5,300 per room per year for mid-range hotels.

Examples with stated financial impact

• Hotel Spero (San Francisco): Generates $3,500/month in upsell revenue with Revinate, achieving 3x cost in revenue
• Zoku (hybrid hospitality): Grew upsell revenue 300% year-over-year through automated breakfast upsells
• Staypineapple properties: 200% increase in upsell packages sold after implementing Canary
• Ojai Valley Inn: Increased call conversions by 16% and average stay value by 23% using Customer Data Platform
• Sabre client (luxury): 10-15 ancillary units generating $1-2 million incremental revenue potential

Co-brand credit card economics (major chains)

Co-branded credit cards have become the dominant ancillary revenue driver for asset-light franchisors:

• IHG: 2023 operating profit from co-branded cards: $39 million, projected to double by 2025 and triple by 2028; received $137 million upfront cash from new card agreements; extended US partnerships with JPMorgan Chase through 2036
• Marriott: 10% growth in co-brand credit card fees in 2024; raised $920 million through credit card partners in 2020
• Wyndham: Launching first-of-its-kind debit card targeting younger guests; renegotiated credit card deal

Hotel ancillary partnerships operate through distinct business structures with different risk/reward profiles and technology requirements.

Revenue sharing models dominate spa and F&B

Spa partnerships follow two primary models:

1. Revenue Share Model: Hotel receives percentage of spa gross operating revenue (GOR)—simpler but creates potential conflicts
2. Fee & Profit Model: Spa operator receives percentage of GOR plus percentage of GOP—both parties share profits, better aligning incentives

F&B outsourcing uses three approaches:

1. Lease Model: F&B operator pays minimum fixed base rent plus variable turnover-based rent (typically 12-14% of F&B revenue as rent benchmark)
2. Operating Agreement: Similar to hotel management agreement; F&B operator receives management and incentive fees
3. Chef Partnership/Franchise: Celebrity chef arrangements on franchise, lease, JV, or direct partnership basis

Technology vendor models favour SaaS over revenue cuts

Canary Technologies operates a SaaS model where hotels keep 100% of upsell revenue—no commission on transactions. Oaky charges SaaS fees, with ski resort customers averaging €38.39 upsell revenue per room/month. Revinate subscribers report 10x ROI on their subscription investment.

Technology integration remains the primary structural barrier

• 45% of hoteliers struggle with siloed technology stacks
• Only 28% of hotels utilise revenue management system tools (Skift)
• On-property systems (golf, spa, cabanas) rarely connect to CRS/CRM/PMS
• Industry experts estimate 5-10 year journey to mainstream attribute-based selling adoption

Several hotel companies and partnerships demonstrate aggressive experimentation that goes beyond incremental optimisation.

Accor/Ennismore pioneered the ancillary-first hospitality model

Ennismore (Accor’s lifestyle joint venture) represents the industry’s most radical revenue model reimagining:

• The Hoxton Southwark revenue mix: 40% rooms, 30% F&B, 30% coworking— with 800 coworking stations in one property
• Fee multiplication: Lifestyle hotels generate 3x the fees of non-lifestyle Accor hotels due to ancillary products
• Four in-house studios: F&B concept incubation (~40 brand concepts), AIME Studios (design), Digital Product & Tech Lab, Partnership Studio
• Potential IPO: Accor reportedly considering spinning off Ennismore—would test whether Wall Street values F&B revenue and “brand heat” as credible long-term value sources

Unusual and unexpected partnership examples

Marriott + Postcard Cabins acquisition (December 2024): Marriott paid acquisition price for a “tiny cabin” company—1,200+ 160-square-foot cabins with no TVs or WiFi—to capture outdoor travel demand. This represents a fundamental departure from traditional hotel product.

Hilton + Calm partnership (January 2025): Rather than spa partnerships, Hilton made meditation content integral to the room product through Connected Room technology—2,400+ hotels can now offer Calm content without subscription.

Wyndham AI partnerships: Economy-segment leader partnered with OpenAI, Amazon, Oracle, Salesforce, and Adobe for Wyndham Connect platform— now deployed at ~5,000 hotels (up from ~1,800 in June 2024), demonstrating ancillary innovation isn’t limited to luxury.

Equinox Hotels + White Mirror: AI-enabled rooms that adjust lighting and sound through voice commands based on sleep neuroscience research with Dr. Matthew Walker.

Technology-enabled innovations changing service delivery

Hyatt + Way Platform (August 2025): End-to-end merchandising enabling properties to generate “millions in ancillary revenue” through cabana rentals, experiences, and in-room amenities with World of Hyatt points integration.

IHG attribute-based selling: Guests spend additional $22/night on average to customize room attributes—a hotel industry first for systematic room unbundling at scale.

Hotel Edelweiss “Snorer Room”: Creatively monetised previously difficult-to-sell rooms by positioning them as ideal for snorers—demonstrating how attribute reframing can convert liabilities into ancillary revenue.

Analysis of earnings disclosures, strategic commitments, and execution reveals a clear hierarchy among major hotel companies in ancillary innovation.

Leaders with quantified strategies and execution

IHG has the most explicit and quantified ancillary revenue strategy in the industry:

• Fee margin expansion: Q4 2024 reached 61.2% (up 190 basis points YoY)—directly attributed to high-margin ancillary services
• Explicit targets: 100-150 basis points of annual fee margin improvement through operational efficiencies and fee revenue growth
• Credit card economics disclosure: Most detailed in industry—projecting co-brand revenue to double by 2025 and triple by 2028
• Loyalty penetration: ~70% of Americas room nights from loyalty members who spend 20% more and are 10x more likely to book direct

Accor/Ennismore operates the most innovative model with highest ancillary revenue share potential:

• Lifestyle hotels currently <2% of room count but 5% of fee volume—could quickly rise to 40% as lifestyle expands (per CEO Sebastien Bazin)
• Deputy CEO Jean-Jacques Morin: “You get [three times the amount] of the fees you’d get from a [non-lifestyle] Accor hotel because you’ve got all those ancillary products.”

Wyndham shows strongest growth momentum with explicit tracking:

• Q2 2025: Ancillary revenues increased 19% YoY
• Q3 2025: Ancillary revenues increased 18% YoY
• CEO Geoff Ballotti: “We achieved double-digit growth in ancillary revenues”— demonstrating ancillary growth is largely independent of RevPAR performance

Moderately advanced players

Hyatt excels in experiential technology partnerships (Way platform) with fastest loyalty growth (27% annual growth 2017-2024, reaching 54 million members). Recent acquisitions of Standard International ($150M) and Bahia Principe (€359M) signal lifestyle and all-inclusive expansion.

Marriott has scale advantages (228 million Bonvoy members, MGM partnership adding 37,000 rooms) but slower lifestyle/experiential innovation. Major technology overhaul underway but described as “a couple of years” timeline.

Relative laggards

Hilton has focused primarily on unit growth (record 7.3% net unit growth in 2024, 500,000-room pipeline) with less vocal ancillary strategy. Recent partnerships (AutoCamp, SLH, Graduate Hotels, NoMad) add lifestyle exposure but CFO Kevin Jacobs noted luxury traction came from “completely capital light” SLH partnership rather than ancillary revenue innovation.

Hotels significantly under-index on ancillary revenue compared to airlines, cruises, and theme parks—representing substantial untapped opportunity.

Cross-industry benchmarking reveals the gap

Industry	Ancillary/Non-Core Revenue %	Maturity Level
Airlines (LCCs)	52-62%	Fully mature
Theme Parks	40-51%	Mature
Cruise Lines	~31%	Mature
Hotels (industry avg)	~32% (but largely traditional F&B)	Developing
Hotels (true “ancillary fees”)	~10-15%	Early stage

Airlines demonstrate the ceiling: Global airline ancillary revenue reached $148.4 billion in 2024 (+26% YoY), representing 14.9% of total industry revenue. Low-cost carriers like Frontier generate 62% from ancillaries—more than from base fares. Five LCCs now generate majority revenue from ancillaries.

Cruises show hospitality potential: Royal Caribbean’s 2024 revenue per passenger was $1,926 total, with $582 (30%) from onboard/ancillary. Academic research confirms ticket prices barely cover costs—onboard revenue is the primary profit driver.

Conservative growth estimates

Hotels could reasonably grow deliberate “extra fee” ancillary revenue from current ~10-15% to 20-30%, representing potential doubling of ancillary income for properties fully executing Total Revenue Management strategies with technology enablement.

McKinsey assessment: Hotels can take “a page from the airline playbook by unbundling rates and letting consumers pay for the exact experience they want.” Hotels prioritising ancillary strategies see up to 30% higher profitability.

Untapped categories with growth potential

1. Attribute-based selling at scale: Only IHG has systematic implementation; Amadeus estimates $5,300 per room per year incremental potential
2. Non-guest monetisation: Day-use spa, F&B, and coworking for locals remains underdeveloped
3. Dynamic pricing of all services: Parking, premium WiFi, early check-in still largely static pricing
4. Subscription/membership models: Recurring revenue from loyal guests unexplored by most brands
5. AI-enabled personalisation: McKinsey estimates 10-30% revenue per customer increase from personalized ancillary offers

Primary barriers to closing the gap

• Technology fragmentation: Only 10% of hotels purchase advanced revenue management technology
• Ownership structure complexity: Fragmented ownership complicates investment decisions
• System integration costs: Estimated 5-10 year industry journey to mainstream attribute-based selling
• Organisational barriers: Top management support remains “predominant organisational barrier” to Total Revenue Management adoption

Main Sources:

Market Size & Growth Data

https://www.linkedin.com/pulse/average-hotel-has-increased-its-ancillary-revenue-stream-pablo-torres-7wcwf https://growthmarketreports.com/report/ancillary-revenue-attribution-for-hotels-market/amp https://www.sabrehospitality.com/resources/article/unlock-more-revenue-streams-by-merchandising-hotel-spaces/

EV Charging Partnerships

https://stories.hilton.com/releases/hilton-to-install-up-to-20000-tesla-universal-wall-connectors-at-2000-hotels https://www.ihgplc.com/en/news-and-media/news-releases/2024/ihg-hotels-resorts-envirospark-to-scale-availability-of-elec-vehicle-chargers-at-hotels-us-canada https://media.choicehotels.com/2024-02-06-Choice-Hotels-to-Offer-Access-to-Tesla-Electric-Vehicle-Charging-Stations-at-Participating-Hotels-Across-the-United-States https://www.hoteldive.com/news/tesla-bwh-hotels-ev-charging/702511/

Wellness & Sleep Partnerships

https://stories.hilton.com/releases/hilton-and-calm-partner-to-address-wellness-demand https://www.travelandtourworld.com/news/article/hyatt-expands-wellbeing-offerings-with-new-mindfulness-and-wellness-partnerships/ https://www.hoteldive.com/news/hotels-embrace-sleep-tourism/653676/ https://www.hoteldive.com/news/luxury-hotel-technology-wellness-marriott/758794/

Outdoor/Alternative Accommodations

https://www.prnewswire.com/news-releases/marriott-international-explores-the-outdoors-with-postcard-cabins-and-trailborn-302330128.html https://www.hoteldive.com/news/marriott-outdoor-collection-postcard-cabins-trailborn/735447/

Accor/Ennismore Lifestyle Model

https://skift.com/2021/11/12/accors-lifestyle-ambition-shows-ancillary-revenue-isnt-just-for-airlines/ https://skift.com/2022/09/20/ennismore-top-boss-sees-impact-of-great-merging-on-lifestyle-hotels-and-co-working/

IHG Financial Performance & Strategy

https://ftnnews.com/travel-news/accommodation/ihg-credit-cards-loyalty-and-revenue-on-the-rise/ https://hotelguestexperience.co.uk/news/ihg-secures-long-term-co-brand-credit-card-partnerships/ https://www.ainvest.com/news/ihg-q2-2025-earnings-navigating-macroeconomic-headwinds-strategic-resilience-margin-expansion-2508/

Marriott & Hyatt Performance

https://marriott.gcs-web.com/node/35736/pdf https://finance.yahoo.com/news/marriotts-latest-report-9-things-154020230.html https://www.hoteldive.com/news/hyatt-loyalty-partnership-experiences-ancillaries/758617/ https://investors.hyatt.com/news/investor-news/news-details/2025/Hyatt-Reports-Fourth-Quarter-and-Full-Year-2024-Results/default.aspx

Wyndham Performance

https://investor.wyndhamhotels.com/news-events/press-releases/detail/383/wyndham-hotels-resorts-reports-strong-second-quarter https://corporate.wyndhamhotels.com/news-releases/wyndham-hotels-resorts-reports-third-quarter-results/

Technology & Upselling

https://www.canarytechnologies.com/products/hotel-upsells https://www.revinate.com/strategies/hospitality-upsells-marketing/ https://www.phocuswire.com/why-attribute-based-selling-gaining-momentum

Partnership Structures

https://www.linkedin.com/pulse/spa-business-model-series-2-management-company-trent-munday https://www.lexology.com/library/detail.aspx?g=2d53ee9e-2a4e-480a-9bf5-ab114a9751c4 https://www.checkfront.com/blog/how-much-commission-should-you-pay-for-travel-agent-partner-bookings/

Cross-Industry Comparisons (Airlines & Cruise)

https://ideaworkscompany.com/airline-ancillary-revenue-skyrockets-to-148-4-billion-worldwide-for-2024-press-release/ https://www.cruzely.com/heres-how-much-money-cruise-ships-make-off-every-passenger-infographic/

Industry Analysis & Trends

https://www.duettocloud.com/library/key-trends-shaping-the-hotel-industry-in-2024 https://www.hospitalityinvestor.com/technology/review-2024-year-hotel-tech https://str.com/data-insights-blog/role-total-revenue-management-hotel-profitability-strategy