How Optimization Software Boosts Ancillary Revenue

Ancillary Revenue Is No Longer Extra — It’s a Core Growth Lever

Ancillary revenue, which refers to any type of income generated outside of a company’s core products and services, has never been more integral for future business success. 

This is especially relevant for brands in travel, hospitality, and digital commerce. As 63% of travel bookings are now made on mobile devices, there are ample opportunities to present ancillary offers to users – which remain crucial to profitability and driving long-term growth. 

Ancillary revenue isn’t just about selling more, but offering relevant add-ons to improve the customers experience. For instance, when you’re booking a flight and a pop-up to purchase extra-leg room comes up – it isn’t just to blindly sell the customer something, but to actually make their travel experience more comfortable and enjoyable. 

Effective ancillary experiences require specific optimization techniques, like personalization, to successfully appeal to the customer. 

In this article, we’ll break down what ancillary revenue is, how it works, and exactly how optimization software like AB Tasty can help brands to break through their ancillary revenue bubbles and dare to go further. 

What Is Ancillary Revenue? A Quick Definition With Big Business Impact

Ancillary Revenue is any type of income that is generated outside of a brand’s core product or service. 

The main goal with ancillary revenue is to offer products and services in support of the primary or initial purchase made by the customer. In turn, the company earns additional revenue from related extras, upgrades, or complementary purchases.

For example, Apple is predominantly known for selling laptops, phones, and tablets. Anytime they make a sale on an accessory for one of these products, such as a laptop case or interactive pen for tablets – they are benefiting from revenue generated by ancillary products.

The table below will provide additional, popular examples of ancillary revenue:

Industry/Event	Example of Ancillary Revenue
Airlines	Charging for checked bags, seat selection, and Wi-Fi on board.
Hotels	Earning money from minibar purchases, parking fees, and room upgrades
Movie Theaters	Selling popcorn, drinks, and upgraded seating.
Theme Parks	Selling fast passes, souvenir photos, and food packages.

 

Keep in mind that ancillary revenue can come from optional services before, during, or after the core purchase. 

Why Ancillary Revenue Growth Depends on Experience, Not Just Offers

Ancillary products aren’t just an avenue to secure additional revenue, but a way to enrich the overall experience. 

Think of being at your favorite artist’s concert or football team’s tournament. Having your favorite drink or a new t-shirt to serve as a souvenir from the day can enhance the overall experience and further contribute to creating lasting memories.

The problem is that brands often focus on what they offer rather than how they offer it.

Remember, the main goal of ancillary revenue is for businesses to increase their revenue. This is why airlines are often trying to sell seat upgrades, entertainment services, or loyalty subscriptions. 

But the thing is that in their efforts to boost ancillary revenue, brands can easily overload the experience with too many upsells, creating friction, fatigue, or even distrust. That’s why personalization is so important. Poor timing, irrelevant recommendations, or cluttered interfaces can weaken ancillary performance instead of improving it.

Customers are far more likely to engage with ancillary offers when they feel timely, useful, and personalized to their needs.

This is where optimization plays a critical role, helping brands strike the right balance between revenue growth and user experience.

Where Brands Miss Out on Ancillary Revenue Opportunities

The opportunities for brands to benefit from ancillary revenue are vast, but they still often miss the mark on how to design and deliver these offerings in a way that feels seamless and genuinely adds value to the customer experience.

The interactive overview cards below will reveal some of the most common mistakes that limit businesses from fully benefiting from ancillary revenue:

Therefore, even when there are strong ancillary offers – they can often underperform when the surrounding experience adds friction.

The Average Ancillary Journey Timeline 

Below is the average step-by-step process for how brands present ancillary offers and either secure or deter the user from purchasing the product or service: 

1. Core Journey Focus: Brands design the customer experience around the main product or service (flight, ticket, subscription) and treat everything else as secondary.
2. Late-stage Add-ons: Ancillary products are introduced only at checkout or after purchase, which makes them less known and reduces the chance of meaningful engagement – as most users want to be done with the shopping process by then.
3. Fragmented Touchpoints: Extras (like upgrades, merchandise, or add-ons) are scattered across different steps or platforms, making the experience feel disconnected and harder to navigate.
4. Low Emotional Stakes: Add-ons are presented as transactional upsells rather than part of the experience, meaning that customers don’t inherently associate them with enhancing the journey.
5. Missing Context: Opportunities to offer relevant extras at high-intent moments (booking, anticipation, experience, reflection) are overlooked.
6. Poor Timing & Relevance: Offers are shown when they don’t align with customer mindset, such as after the initial purchase has already been made instead of before checkout, reducing conversion and perceived value.
7. Lost Ancillary Revenue Realization: Since the ancillary journey isn’t designed as an end-to-end experience, customers don’t engage with optional extras – even if they would provide added value (like WiFi on a business trip). This leads to missed revenue and less optimal experiences: whether it be for travel, live events, or e-commerce.

How Optimization Software Improves Ancillary Revenue Across the Customer Journey 

Ancillary revenue, as it’s often tacked on closer to the end of the user’s shopping experience, can be a little more challenging for brands to get right. This is where partnering with optimization software like AB Tasty can help to boost ancillary revenue.  

Iberojet: Tailoring the Search Funnel to User Intent

Getting the very first interaction right is crucial to moving travelers down the purchase path. A great real-world example comes from the Spanish travel agency Iberojet, who questioned whether the default tab order on their homepage search widget (“Holiday Packages” vs. “Travel Circuits and Long-Distance Trips”) was ideal. 

Instead of relying on static layouts, they used AB Tasty to dynamically swap the order of the homepage tabs based on each user’s specific browsing history. This simple, intent-driven personalization caused a 25% surge in clicks on the “Search” button and cut tab-switching friction by 22% – proving that small, personalized adjustments to the homepage can unlock massive conversion potential.

Go Towards Growth: Test What Actually Drives Ancillary Revenue

It’s hard to grow if you don’t know what’s driving your success, or holding it back, in the first place. 

This is where A/B testing and multivariate testing can be used to help support healthier ancillary revenue – as both offer opportunities to compare offer placement, design, messaging, bundles, and timing.

By moving beyond assumptions and seeing what really influences shoppers to buy ancillary products and services, companies can take one step closer to unlocking new levers of success with ancillary revenue. 

Elevating Trust Signals for Higher Conversions

Trust is a critical driver when booking travel online. If your key reassurance points, like price guarantees or round-the-clock support, are buried too far down the page – customers may hesitate and abandon the checkout process.

In one notable experiment, a travel operator decided to test moving their core trust signal banner (highlighting their Price Promise and 24/7 customer support) from the bottom of the page to a prominent position higher up the screen. 

Making these trust factors visible early in the customer journey resulted in a remarkable 35% increase in transaction rates. If you want travelers to click “book,” make sure your credibility cues are visible right from the start.

Personalize Ancillary Offers for Relevance, Not Noise

One of the main factors that deters people from purchasing ancillary products or services is that they don’t feel relevant to them. 

This is where personalization steps in, especially real-time personalization – which adapts to what the user wants right now in the moment. 

By being able to determine what would feel most applicable to the shopper while they are still on the site, brands can present better-suited ancillary offers according to each individual user. This helps to make ancillaries feel helpful instead of intrusive.

Our latest Mobile Booking Friction Report highlights exactly why this tailored, upfront approach is so critical. In our benchmark evaluation of major European airlines, we discovered that 0 out of 6 airlines showed tax-inclusive pricing on their results page. When passengers encounter these “price surprises” later in the journey, it damages brand trust and triggers cart abandonment.

Given that 80% of airline traffic is now on mobile devices, brands can no longer rely on generic, one-size-fits-all digital experiences that fail to convert. By leveraging real-time personalization to present transparent, relevant ancillary offers dynamically, brands can eliminate friction, rebuild customer confidence, and protect vital conversion rates.

Reduce Friction Around Add-Ons and Upgrades

To be successful with ancillary revenue, it’s important to simplify how ancillary options are displayed.

This include tactics like:

• Clarify pricing
• Describing the benefits
• Cleaner or more aesthetically pleasing selection flows
• Removing unnecessary complexity that causes drop-off

In making the presentation for ancillary offers simpler, brands can boost the chances of conversion for these additional products and services. 

Build Trust While Increasing Ancillary Revenue

Ancillary revenue isn’t just an opportunity to boost sales, but to establish trust with your customers and increase brand loyalty.

Offering ancillary products and services gives brands a valuable opportunity to demonstrate transparency, provide reassurance, and clearly communicate value. This reveals how showing customers trust and revenue growth go hand in hand.

Driving Ancillary Revenue Through Intelligence, Not Just Testing

Choosing the right strategy for ancillary revenue is no longer about running isolated experiments, but about creating a seamless, intelligent ecosystem that anticipates what a traveler needs before they even ask. While traditional testing identifies where a button should go, AI-powered Recommendations and Visual Merchandising determine what should be inside that offer to make it convert.

However, many generic personalization engines fall short in high-stakes travel environments – as the majority of travel purchases remain a highly emotional endeavor for users. A general e-commerce engine might recommend products based on simple browser cookies, but airline booking requires a much more robust, industry-specific approach.

In order to drive effective conversion rates without overwhelming passengers, travel operators must personalize based on real-time booking parameters, route characteristics, and passenger intent.

Boost Ancillary Revenue with AB Tasty

Here are just a few of the ways that this can be done when brands partner with AB Tasty:

• Route-Based Personalization: Instead of showing the same generic lounge-pass popup to everyone, airlines can use AB Tasty to dynamically tailor offers based on flight length and destination. For example, a traveler on an overnight flight from Madrid to Buenos Aires is automatically prioritized for an extra bag or a premium seat upgrade, while a business traveler on a short 45-minute domestic shuttle is shown fast-track security lane access to help make their journey even shorter.
• Dynamic Fare Bundling: Rather than cluttering the screen with multiple separate ancillary screens (which our Airline Mobile Booking Friction Report revealed is a major contributor to mobile passenger fatigue), operators can use AB Tasty’s segmentation to group ancillaries into targeted packages. For instance, “decisive” booking profiles who select flights quickly can be offered a pre-packaged “Trip Pack” (baggage + seat selection) directly on the results page to capture high intent and make them more confident in their purchase.
• Intent-Driven Discovery: This approach has been proven to unlock significant conversion potential, such as with Iberojet – who used AB Tasty to dynamically reorganize the search widget tabs on their homepage based on a traveler’s prior search history. This allowed them to move from static to adaptive personalization, as they were able to relay the most relevant travel circuits first, resulting in a 25% surge in searches and a 22% reduction in tab-switching friction.
• Trust as a Conversion Catalyst: In high-value travel transactions, price transparency is paramount. By raising core trust signals, such as price guarantees and 24/7 customer support, travel operators have seen a 35% uplift in transactions. This shows that when customers feel secure and see no hidden “price surprises,” they are much more likely to engage with higher-margin ancillary services.

Ultimately, successful ancillary growth happens when you combine intelligent, airline-specific capabilities with a human-centric approach – taking small steps to turn what used to be a friction-filled funnel into a helpful, fluid part of the booking journey.

How AB Tasty Helps Brands Turn Ancillary Revenue Into Smarter Revenue

For years, travel, hospitality, and e-commerce brands have approached ancillary revenue as a secondary checklist tacked onto the very end of the booking funnel. In the past, it’s been treated as a transactional afterthought: a static pop-up for baggage, a generic travel insurance checkbox, or an intrusive upgrade screen right before payment.

But in today’s mobile-first market, where 80% of airline traffic is now on mobile devices – generic, high-friction upsells are no longer just ignored – but often encourage cart abandonment.

In our benchmark analysis of major European airlines, we saw the repercussions of poor personalization in real-time. For instance, Ryanair’s “more is more” approach, where they force users through six separate ancillary screens, creates an overstimulated experience for the user and induces greater friction. Implementing the opposite approach has shown to be more successful, as leaders like Lufthansa and SWISS achieved significantly higher conversion scores by consolidating ancillaries into a single, high-impact screen with clear skip options.

The lesson is clear: Ancillary revenue is an opportunity to incite conversation as opposed to a simple transaction. 

At AB Tasty, we help brands move past generic, one-size-fits-all layouts to build an intelligent, conversion-driven booking funnel using specific, powerful optimization capabilities.

Here’s a breakdown of how our personalization tools can help your ancillary revenue take flight:

Real-Time Personalization & Intent-Driven Flow with Evi AI

Instead of forcing every user through the same six-step upgrade “pamphlet” if you will, brands can use AB Tasty’s real-time personalization tools like AdaptiveCX and EmotionsAI to dynamically adapt the booking path based on user intent.

• Example: Spanish carrier Iberojet noticed massive drop-offs on their homepage search widget. Rather than serving a static layout, they used AB Tasty to dynamically swap the order of search tabs based on a visitor’s immediate browsing history. This simple, intent-driven personalization allowed for a 25% surge in “Search” button clicks and slashed tab-switching friction by 22%.

Emotional Audience Segmentation with Emotions AI

When designing the perfect personalization plan for clients, we frequently address how to segment users based on why they buy instead of what they buy. 

By using our inhouse tool called Emotions AI, travel operators can separate users based on their emotional intent to tailor ancillary displays to each individual user.

Examples of how using EmotionsAI can help to boost ancillary revenue include:

• The “Conscious Planner” Segment: Reveals reassurance signals, carbon-offset options, and flexible refund insurance early in the funnel to help users feel secure in their purchases.
• The “Value Hunter” Segment: Bundles ancillary items (like baggage and priority boarding) into a single discounted package at high-intent moments, which can encourage these kinds of shoppers to buy more without cluttering the screen. 

AI-Powered Merchandising & Smarter Sorting

Ancillary offers underperform when they feel like “noise” to shoppers trying to move through the booking funnel. With AB Tasty’s One Platform and Commerce and Intelligent Recommendations suite, brands can access a one-stop-shop to discover better timing, placement, and sorting algorithms for their websites.

• Example: Instead of recommending random add-ons, Online Travel Agencies (OTAs) use our sorting algorithms to dynamically display destination-specific ancillaries – such as car rentals in suburbia or airport transfers in big cities. Testing these personalized, high-relevance bundles has proven to significantly boost average order value (AOV) while keeping the checkout interface clean.

Safe Deployment & Risk-Free Rollouts

Rebuilding a booking flow or changing an ancillary pricing structure is a massive risk for engineering teams. AB Tasty’s Feature Management allows product and engineering teams to run progressive rollouts of new ancillary layouts in production.

• The Use Case: A major travel operator wanted to test moving their core trust signal banner (highlighting price guarantees and 24/7 support) higher up the page to combat price-surprise friction. By rolling out this change to small, controlled segments using feature flags, they proved the layout modification drove a 35% increase in transaction rates before deploying it globally, entirely eliminating launch risk.

Your Next Step to Smarter Revenue

Ancillary growth happens when you treat the digital experience as an asset, not an obstacle. 

With AB Tasty, brands can access a single, unified platform that enables marketing, product, and engineering teams to experiment boldly, personalize contextually, and drive sustainable, high-margin revenue on every single visit.

The Bottom Line: Better Optimization Leads to Better Ancillary Revenue

Remember, ancillary revenue growth depends on relevance, timing, trust, and experience design. 

Together, smarter optimization and teamwork can boost ancillary revenue for virtually any kind of business. 

By partnering with optimization platforms like AB Tasty, brands can test and improve every step of the ancillary journey – helping to making ancillary revenue a reliable source of income possible. 

Brands that treat ancillary revenue as a worthwhile experience and investment as opposed to a challenge will not just succeed in a traditional sales tactic, but position their businesses to grow past their original goals. 

Ready to personalize your ancillary revenue experience for progress? 

FAQs

Still have questions about ancillary revenue? Here are the answers you need.

How do upsell recommendations increase revenue?

The most effective recommendations are relevant and accommodate what a user wants in real-time. They should be complementary items that align with the customer’s original purchase or interests, instead of randomized pop-ups that could prove off-topic and frustrating. Personalized suggestions help improve customer satisfaction and increase conversion rates.

What types of products or services work best for recommendations?

Ancillary revenue refers to income that is generated outside of a businesses main source of revenue. An example of ancillary business is when artists sell merchandise, like sweatshirts, tote bags, hats, or upgraded VIP packages at a concert. The main source of the artist’s income would be music sales, streaming, and concert ticket sales – whereas the ancillary revenue would be additional merchandise that they sell.  

Who benefits from ancillary revenue?

Businesses based in sales and service-based industries benefit the most from ancillary revenue. This is because ancillary offers not only help to boost turnover, but also create a better customer experience – which can encourage repeat customers and increased brand loyalty for long-term business growth.  

How does optimization software help to boost ancillary revenue?

Optimization software like AB Tasty can help to boost ancillary revenue as improved personalization tactics, stronger A/B or multivariate testing, and more can reveal friction points that keep users from booking ancillary offers – especially in travel.