An add-on (sometimes called an ancillary service) is a supplemental product or service bought in tandem with a primary travel booking like a flight ticket or hotel room. These optional extras enable travelers to customize their journey based on their specific needs, whilst at the same time being an important revenue stream with a high margin for travel suppliers and intermediaries.
In the modern world of travel economy, the base fare or room rate is often just a start. The business model of many travel companies, and especially Low-Cost Carriers (LCCs) and budget hotels, depends heavily on the “unbundling” of the product.
Unbundling refers to stripping the travel product to the bare minimum (the seat or the bed) to advertise a cheap “lead price.” Every other convenience that used to be included is then sold back to the customer as an add-on. For many suppliers, the profit margin on add-ons (such as travel insurance or priority boarding) is much higher than the margin on the product itself.
From a technical perspective, add-on management requires reliable functionality within the CRS (Central Reservation System) and IBE (Internet Booking Engine).
Add-ons in travel and tourism can be divided into two categories:
1) Supplier-controlled (internal): Services offered directly by the airline or hotel.
2) Third-party (external): Services provided by partners that are sold through the booking flow.
An upsell is the replacement of the original product by a better version (e.g., upgrade to a suite). An add-on is an additional item bought on top of the original item (e.g., “Add Breakfast to Your Standard Room”).
Ancillary revenue is income obtained from the sale of add-ons. For airlines, however, this has turned into an enormous financial pillar, representing billions of dollars per year, separate from selling tickets.
Yes. When a travel agent or OTA sells an add-on (especially third-party add-ons such as insurance or tours), they will usually receive a commission on that particular item, separate from the commission on the flight or hotel.
Leave your request
We will contact you shortly
Thank you for your request!
We will get back to you as quickly as possible
