Ancillary Revenue Management Market by Offering (Full-Service Carrier, Low-Cost Carrier), Deployment (On-Cloud, On-Premises), End-User - Global Forecast 2024-2030

Ancillary Revenue Management Market by Offering (Full-Service Carrier, Low-Cost Carrier), Deployment (On-Cloud, On-Premises), End-User - Global Forecast 2024-2030

The Ancillary Revenue Management Market size was estimated at USD 919.16 million in 2023 and expected to reach USD 974.77 million in 2024, at a CAGR 6.26% to reach USD 1,406.90 million by 2030.

Ancillary revenue management is a strategic approach used by various industries to generate additional revenue from goods or services that differ from the core offerings. This includes revenue from baggage fees, seat upgrades, on-board sales, hotel room service, and more. Efficient management of these ancillary services boosts the overall revenue and enhances customer satisfaction by providing more tailored options. The primary driving force behind ancillary revenue management is, motivating businesses to seek additional revenue streams. Furthermore, the rise in consumer demand for personalized services provides an avenue to offer bespoke ancillary services. Technological advancements, especially in digital platforms, allow businesses to market and sell these services more effectively. Despite its potential, ancillary revenue management faces challenges such as pricing strategy, which requires careful consideration to avoid customer dissatisfaction. Integrating ancillary services seamlessly while ensuring a positive customer experience is another significant challenge. Additionally, regulatory issues, particularly in the airline sector, can constrain the scope of ancillary offerings. The evolving consumer preferences toward customized and comprehensive service packages present significant opportunities. Technological advancements, such as AI and machine learning, offer advanced tools for data analysis and personalized marketing, paving the way for innovative ancillary services.

Regional Insights

In the Americas, ancillary revenue management is a highly developed practice, significantly contributing to companies' overall revenue, especially in the airline, banking, and hospitality sectors. The adoption of innovative technologies and an intense focus on customer experience drive the growth of ancillary revenues. The United States maximizes ancillary revenue through advanced data analytics and personalized marketing strategies. In contrast, South America is witnessing a gradual increase in the uptake of ancillary revenue strategies, with the travel and hospitality sectors making significant strides. Europe is a major region with a robust ancillary revenue model across many sectors, notably in budget airlines, financial services, and telecom. The region benefits from a strong regulatory framework that supports ancillary revenue growth while protecting consumer rights. The Middle East has emerged as a hub for innovative ancillary revenue practices, particularly in the aviation and hospitality industries, driven by luxury services and digital transformation. Africa's ancillary revenue models are in nascent stages, with significant potential for growth, especially in mobile banking and fintech sectors. Asia-Pacific is experiencing rapid growth in ancillary revenue models, propelled by the digital boom and an expanding middle class. E-commerce, online gaming, and low-cost carriers in countries such as China, Japan, and India are at the forefront of this expansion. The region's diverse cultural and economic landscape presents opportunities and challenges in tailoring ancillary services and products. Technology adoption, such as mobile payments and digital platforms, is significantly influencing the growth of ancillary revenues.

Market Insights

Market Dynamics

The market dynamics represent an ever-changing landscape of the Ancillary Revenue Management Market by providing actionable insights into factors, including supply and demand levels. Accounting for these factors helps design strategies, make investments, and formulate developments to capitalize on future opportunities. In addition, these factors assist in avoiding potential pitfalls related to political, geographical, technical, social, and economic conditions, highlighting consumer behaviors and influencing manufacturing costs and purchasing decisions.

Market Drivers

• Growing expansion of airline businesses along with airport development and modernization
• Emergence of NDC and its subsequent evolution into the existing distribution system

Market Restraints

• Integration complexity associated with ancillary service management systems

Market Opportunities

• Integrating technologies to streamline ancillary service offerings
• Evolving consumer preferences toward customized and comprehensive service packages

Market Challenges

• Concerns over data accuracy & analytics

Market Segmentation Analysis

• Offering: Growing preference for LCCs to seek affordability and convenience
• End-User: Significant benefits of ancillary revenue management in insurance and entertainment sector to strengthen customer relationships and loyalty

Market Disruption Analysis

• Porter’s Five Forces Analysis
• Value Chain & Critical Path Analysis
• Pricing Analysis
• Technology Analysis
• Patent Analysis
• Trade Analysis
• Regulatory Framework Analysis

FPNV Positioning Matrix

The FPNV positioning matrix is essential in evaluating the market positioning of the vendors in the Ancillary Revenue Management Market. This matrix offers a comprehensive assessment of vendors, examining critical metrics related to business strategy and product satisfaction. This in-depth assessment empowers users to make well-informed decisions aligned with their requirements. Based on the evaluation, the vendors are then categorized into four distinct quadrants representing varying levels of success, namely Forefront (F), Pathfinder (P), Niche (N), or Vital (V).

Market Share Analysis

The market share analysis is a comprehensive tool that provides an insightful and in-depth assessment of the current state of vendors in the Ancillary Revenue Management Market. By meticulously comparing and analyzing vendor contributions, companies are offered a greater understanding of their performance and the challenges they face when competing for market share. These contributions include overall revenue, customer base, and other vital metrics. Additionally, this analysis provides valuable insights into the competitive nature of the sector, including factors such as accumulation, fragmentation dominance, and amalgamation traits observed over the base year period studied. With these illustrative details, vendors can make more informed decisions and devise effective strategies to gain a competitive edge in the market.

Recent Developments

Sabre Launches AI-Powered Airline Retailing Solution to Boost Ancillary Revenue

Sabre Corporation announced the creation of Sabre Upgrade IQ, a new AI-powered retailing solution that is PSS agnostic. The new product leverages advanced AI/ML technology through Sabre Travel AI to allow travelers to bid for an upgrade to a higher cabin class at any pre-travel stage of the journey.

Transavia France partners with Planitas to drive ancillary revenue growth

Transavia France, the low-cost carrier, part of the Air France-KLM Group, partnered with Planitas to support the airline’s ancillary revenue efforts by leveraging the value of its data to drive optimized customer-centric offers. This partnership is aimed to transform Transavia France’s price decisions by delivering customer-centric offers that lead to higher ancillary revenue yield, increased customer satisfaction, and a net increase in total revenue to push Transavia’s price decision-making capability.

Plusgrade Acquires Upstay to Expand Ancillary Revenue Solutions

Plusgrade acquired UpStay to expand its offerings in the hospitality sector and become the global ancillary revenue powerhouse. Through this acquisition, UpStay joined forces with Plusgrade to invest further in its product offerings and enhance its ability to drive ancillary revenue for partners through upselling additional on-property amenities and services.

Strategy Analysis & Recommendation

The strategic analysis is essential for organizations seeking a solid foothold in the global marketplace. Companies are better positioned to make informed decisions that align with their long-term aspirations by thoroughly evaluating their current standing in the Ancillary Revenue Management Market. This critical assessment involves a thorough analysis of the organization’s resources, capabilities, and overall performance to identify its core strengths and areas for improvement.

Key Company Profiles

The report delves into recent significant developments in the Ancillary Revenue Management Market, highlighting leading vendors and their innovative profiles. These include ACCELYA, Amadeus IT Group, BONFLITE, Book4Time Inc., Bravo Passenger Solutions Pte Limited, Cendyn, Deutsche Lufthansa AG, Farel Inc., FLYR, Inc., Guestlogix Inc., IBS Software, Machefert Group, Omnevo, Plusgrade Inc., PROS, Inc., Quowork Technologies Pvt. Ltd., Revinate, Sabre Corporation, Scale AI, Travelport LTD, Triparound, Virdee, and WNS (Holdings) Ltd..

Market Segmentation & Coverage

This research report categorizes the Ancillary Revenue Management Market to forecast the revenues and analyze trends in each of the following sub-markets:

• Offering
• Full-Service Carrier
• Low-Cost Carrier
• Deployment
• On-Cloud
• On-Premises
• End-User
• Energy & Utilities
• Entertainment
• Healthcare
• Insurance
• Retail & Consumer Goods
• Telecom
• Region
• Americas
• Argentina
• Brazil
• Canada
• Mexico
• United States
• California
• Florida
• Illinois
• New York
• Ohio
• Pennsylvania
• Texas
• Asia-Pacific
• Australia
• China
• India
• Indonesia
• Japan
• Malaysia
• Philippines
• Singapore
• South Korea
• Taiwan
• Thailand
• Vietnam
• Europe, Middle East & Africa
• Denmark
• Egypt
• Finland
• France
• Germany
• Israel
• Italy
• Netherlands
• Nigeria
• Norway
• Poland
• Qatar
• Russia
• Saudi Arabia
• South Africa
• Spain
• Sweden
• Switzerland
• Turkey
• United Arab Emirates
• United Kingdom

Please Note: PDF & Excel + Online Access - 1 Year