Key takeaways
- Ancillary revenue represents 15–35% of total turnover for owners who actively leverage this driver, turning each stay into a profit opportunity.
- A well-structured ancillary revenue strategy increases RevPAR without negatively impacting guest experience by offering relevant value-added services.
- Optimising ancillary revenue relies on granular guest segmentation and differentiated pricing by profile and booking window.
When discussing rental income, the first metric that naturally comes to mind is the nightly rate. However, this perspective is incomplete and significantly limits your growth potential. Ancillary revenue is a powerful lever to materially increase profitability, often underutilised due to the absence of a clear strategy. The most successful short-term rental operators understand this reality: accommodation pricing is only the foundation of the business model.
In a context where competition on booking platforms continues to intensify and commission fees keep rising, diversifying ancillary revenue streams has become essential. Today’s travellers are looking for a seamless, end-to-end experience and are willing to pay for services that simplify their stay or enhance comfort. This is precisely where the opportunity lies to transform your economic model.
What is ancillary revenue in short-term rentals?
Ancillary revenue refers to all income generated beyond the base nightly rate. In practical terms, it includes every service, option, or add-on charged in addition to the price displayed on booking platforms.
Main categories of ancillary revenue
These categories are not mutually exclusive. When combined intelligently, they allow you to reach significantly higher profitability levels without compromising the guest experience.
Why ancillary revenue is strategically critical
Unlike the nightly rate, which is directly exposed to competitive pressure and platform commissions, ancillary revenue offers several strategic advantages:
💰 Higher net margins
- Ancillary fees are often excluded from platform commissions
- You maintain full control over pricing and margins
- As a result: net margins can reach 60–80% on services versus 40–50% on accommodation
📊 A strong competitive differentiator
- Displaying a slightly lower nightly rate while offering premium add-ons creates a clear competitive edge
- You appear in price-filtered search results
- Outcome: attract price-sensitive guests and monetise through services
🎯 Personalised guest experience
- Guests choose only the services they actually need
- This avoids the perception of “paying for unused features”
- Result: higher satisfaction and stronger reviews
📌 Real-world example: A property priced at €120/night with €30 in ancillary revenue generates the same total income as a competitor at €150/night, while appearing 20% cheaper in search results. Outcome: +35% conversion rate and stronger algorithmic visibility.
How to structure your ancillary revenue strategy
Building a high-performing ancillary revenue strategy relies on three core pillars: guest segmentation, offer structuring, and differentiated pricing.
1. Identify high-potential guest segments
Not all travellers have the same propensity to purchase add-on services. In practice, certain profiles show a significantly higher attachment rate (purchase likelihood):
✓ Analysis method: Cross-reference your historical data (stay purpose, length of stay, group composition) with ancillary service uptake rates to identify your most profitable guest segments.
2. Build a tiered service offering
Rather than offering a scattered catalogue of services, structure your offer into clearly defined service tiers aligned with different budgets:
🥉 Essential tier (Base)
- Mandatory cleaning fee: €40–60
- Optional linens: €15–25 / person
- Self check-in: included
🥈 Comfort tier (Mid-range)
- Essential + breakfast delivery: €12–18 / person
- + Private parking: €10–15 / day
- + Personalised check-in: €20
- Package pricing: –10% vs individual purchase
🥇 Premium tier (High-end)
- Comfort + 24/7 concierge service
- + Personalised welcome basket: €35–50
- + Daily housekeeping: €30 / day
- + Partner spa / pool access
- Package pricing: –15% vs individual purchase
⚠️ Key principle: Bundling naturally encourages upselling. A guest hesitant to pay €15 for breakfast is far more likely to choose a €40 Comfort package including three services.
3. Optimise dynamic pricing for services
Just like nightly rates, ancillary service pricing must adapt to demand and booking context:
📈 Seasonality-based pricing
- High season: increase premium services by 15–25% (concierge, activities)
- Low season: promote bundled offers to stimulate uptake
- Weekends: prioritise leisure services (+20%)
- Weekdays: prioritise business services (premium WiFi, parking)
⏰ Lead-time pricing
- Early booking (>60 days): –10% on packages to secure revenue
- Standard booking (15–60 days): base pricing
- Last-minute (<15 days): +15% on logistics-heavy services (chef, activities)
👥 Group-size pricing
Unit pricing should decrease with group size to encourage uptake:
- 2 guests: 100% of base price
- 3–4 guests: 85% of unit price
- 5+ guests: 70% of unit price
Example: Breakfast at €15/person → 6 guests = €63 instead of €90
High-ROI ancillary services for short-term rentals
Certain services deliver an exceptionally high return on investment. Based on the analysis of more than 225 properties, these are the top performers:
🔝 Top 5 most profitable ancillary revenue streams
1. Differentiated cleaning fees
Rather than a flat rate, adjust pricing based on property size and length of stay:
€40 (studio), €60 (1-bedroom), €80 (2+ bedrooms).
For stays longer than 7 nights, offer an optional mid-stay cleaning at 60% of the initial fee.
→ Average contribution: 8–12% of total revenue
2. Delivered or prepared breakfast
Partner with a local bakery or delivery service.
Pricing: €12–18 per person, net margin 50–60%.
Particularly effective for business travellers and couples.
→ Uptake rate: 35–45% • Contribution: 6–9% of total revenue
3. Private or reserved parking
If you own a parking space or negotiate an agreement with a nearby facility.
Pricing: €10–20/day depending on the city.
Minimal investment, net margin 70–90%.
→ Uptake rate: 40–60% (urban areas) • Contribution: 5–8% of total revenue
4. Baby equipment (crib, high chair, baby bath)
Initial investment: €200–350.
Rental price: €25–40 per stay.
ROI achieved within 6–10 rentals.
Enables you to capture a family segment that is often underserved.
→ Uptake rate: 70–85% (families) • Contribution: 3–6% of total revenue
5. À-la-carte concierge services
Pre-arrival grocery shopping, restaurant reservations, show tickets, airport transfers.
Margin: 20–40% depending on the service.
Low operational effort when working with a local partner.
→ Uptake rate: 15–30% • Contribution: 4–7% of total revenue
⚠️ Services to avoid or optimise
However, some services show an unfavourable cost-to-benefit ratio:
- Premium WiFi: high cost, low uptake except for business travellers
- Private spa / hot tub: expensive maintenance, high liability
- High-end catering services: complex logistics, low margins
- Direct vehicle rental: insurance and operational complexity
💡 Tip: For these services, favour a commission-based model with local partners rather than direct management. You earn 10–20% commission without handling operations.
Service communication and presentation strategy
Even with a strong service offering, the uptake rate largely depends on your communication strategy. Here are the key moments to present your ancillary services:
1. Search phase: optimised listing
- In the title: mention 1–2 differentiating services (“With parking” / “Breakfast available”)
- In amenities: tick all available options to improve ranking
- In the description: a dedicated “Services & Options” section mid-text
- In photos: visually showcase premium services (parking, breakfast area, baby equipment)
2. Booking phase: personalised automated message
Immediately after booking, send an automated welcome message including:
“Hello [First name], thank you for your booking! To make your stay even more comfortable, we offer:
- 🍳 Continental breakfast delivered each morning: €15/person
- 🚗 Secure parking space: €12/day
- 👶 Full baby kit (crib + chair + bath): €35 for the entire stay
Book at least 7 days before arrival to receive a 10% discount. Simply reply to this message to order.”
3. Pre-stay phase: targeted reminders
- D-7: final reminder with urgency (“Last days to reserve parking”)
- D-3: last-minute services (pre-arrival groceries, champagne)
- D-1: confirmation of booked services + light upsell (“Would you like breakfast on Sunday?”)
4. During the stay: soft upselling
- Welcome booklet with QR code linking to your services
- Check-in +24h message: “Everything going well? Need a mid-stay cleaning?”
- For stays longer than 5 nights: offer recurring services (breakfast, cleaning)
Measuring and managing ancillary revenue performance
Like any revenue management strategy, optimising ancillary revenue requires close monitoring of key indicators:
📊 Key KPIs to track
🔍 Performance analysis by service
Each month, conduct a performance matrix analysis to identify which services should be scaled, optimised, or discontinued:
Star services ⭐ (Attachment rate >50% + Margin >60%)
→ Increase prices by 5–10% and intensify communication
Promising services 📈 (Attachment rate >50% + Margin <60%)
→ Optimise costs or slightly increase pricing
Niche services 💎 (Attachment rate <50% + Margin >60%)
→ Improve visibility and communication targeting
Services to reassess ⚠️ (Attachment rate <50% + Margin <60%)
→ Remove or radically redesign the offer
Automation and scalability of ancillary revenue
Beyond 2–3 properties, manual management of ancillary revenue becomes time-consuming and error-prone. Several automation levers can be activated:
🤖 Communication automation
- Automated trigger messages: post-booking, D-7, D-3, D-1, check-in
- Dynamic personalisation: automatic insertion of guest name, dates, and relevant services based on profile
- Smart reminders: sent only to guests who have not yet purchased services
💳 Integrated payment platform
Instead of manual bank transfers, offer a secure payment link directly in your automated messages. This typically increases conversion rates by 40–60% by reducing friction.
📊 Centralised management dashboard
A robust revenue management tool allows you to:
- Monitor attachment rates in real time by property and by service
- Compare performance across your different units
- Identify underperforming services requiring adjustment
- Project the impact of ancillary revenue on your overall RevPAR
Frequently Asked Questions
❓ Are ancillary revenues subject to platform commissions?
It depends on the platform and the type of service. On Airbnb, cleaning fees and certain services listed directly in the listing are generally subject to commissions. However, services sold after the booking via direct communication (breakfast, parking, concierge services) usually fall outside platform commissions. This is why post-booking sales strategies are so critical.
❓ Should services be displayed in the listing or offered after booking?
Both approaches are complementary. In the listing: highlight key services to differentiate your property and improve ranking. Post-booking: offer premium or optional services through automated messaging to avoid overloading the listing and to maximise net margins.
❓ What is the right balance between nightly rate and ancillary revenue?
The golden rule: never sacrifice base rate competitiveness to compensate with ancillary services. Your nightly price should remain within the first third of your competitive set. Ancillary services then increase total revenue by 15–30% without harming algorithmic visibility.
❓ How should ancillary service refunds be handled in case of cancellation?
Define a clear policy at the time of sale: (1) Intangible services (concierge, premium WiFi): non-refundable. (2) Services involving supplier commitments (breakfast, activities): refundable up to 48–72 hours before arrival. (3) Physical services (baby equipment, parking): refundable according to the main booking’s cancellation policy. This policy must be clearly stated in your terms and conditions.
❓ What legal risks are associated with ancillary revenue?
There are three main areas of attention: (1) VAT: some services may be subject to different VAT rates than accommodation (food, transport). (2) Liability: ensure your insurance covers the services offered (baby equipment, activities). (3) Local regulations: some cities impose restrictions on ancillary services (parking, breakfast). Always verify your local legal framework.
❓ How can you reassure travellers who are wary of “hidden fees”?
Transparency is essential. Absolutely avoid: mandatory fees not disclosed in the listing or last-minute surprises. Focus instead on: clearly optional services, explicit value propositions (“Save time with our delivered breakfast”), and fair pricing aligned with the local market. Travellers are willing to pay when they clearly understand the added value.
📈 Ready to maximise your ancillary revenue?
Rield analyses your data to identify the most profitable ancillary revenue opportunities tailored to your property and guest profile. Receive a personalised projection of your revenue potential.
To go further, also read our article: How to increase your Airbnb revenue