notitur.com August 24, 2026

Revenue

Ancillary revenue

Ancillary revenue is what a hotel or airline earns beyond its core sale. Baggage, seat selection, parking, spa, breakfast or late check-out are examples. It usually carries a healthy margin and adds up on the bottom line.

Example At many low cost airlines, bags and seats drive more profit than the ticket itself.

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FAQ

What is ancillary revenue?
Ancillary revenue is the income a hotel or airline generates from services beyond its core product, such as baggage fees, seat selection, parking, or spa treatments. For example, airlines earn billions annually from checked bags and priority boarding.
How is ancillary revenue calculated?
It is calculated by adding all revenue from extra services, like late check-out, breakfast, or baggage, and dividing by the number of guests or passengers. For instance, if an airline earns $5 million from seat upgrades in a quarter with 2 million passengers, the ancillary revenue per passenger is $2.50.
How does ancillary revenue differ from core revenue?
Core revenue comes from selling the main product, like a hotel room or flight ticket, while ancillary revenue comes from optional add-ons. Ancillary revenue often has higher profit margins, such as 80% for hotel parking, compared to 40% for room bookings.

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