How Independent Hotels Can Boost Profits Beyond Room Revenue in 2025

How Independent Hotels can earn more beyond Room Revenue in 2025

For most small and mid-sized hotels, room accommodations revenue make up the majority of income. According to STR and CoStar (references below), rooms typically account for over 65% of total revenue in independent properties. Relying on rooms alone leaves a business vulnerable to OTA commissions, rising operating costs, and seasonal swings. At Antravia, we believe that to build a stable, profitable hotel in 2025, owners and managers need to diversify revenue and manage each stream with the same discipline as their room sales.

Food and Beverage: A missed profit opportunity?

Food and beverage (F&B) can represent 20% to 30% of total revenue in full-service hotels, yet many independent properties allow it to run at break-even or even a loss. STR’s Profitability Report shows that F&B margins can vary by more than 15% between properties based purely on inventory and waste control.

Breakfast buffets, common in many hotels, are a particular source of hidden loss. Research from the Cornell School of Hotel Administration estimates that 5% to 12% of food volume purchased for buffets goes to waste due to portioning errors and over-ordering.

Hotels that treat their restaurant as a standalone business, with its own profit-and-loss statement, typically uncover significant upside. Positioning the restaurant as a destination for locals, through partnerships with event planners, seasonal pop-ups, or collaborations with local producers, can double F&B contribution without a heavy rise in fixed costs.

For more detailed strategies on controlling food costs and preventing waste, see our blog on running a profitable restaurant within your hotel.

Packages to lift Revenue and reduce Risk

Room-only rates lead to direct price comparisons on OTAs, often pushing hotels into discounting wars. Packages help increase average revenue per booking while locking in costs.

For example, consider a two-night “Wine and Dine” stay can include set-menu dinners, a wine tasting, and a late checkout. We have seen this work very well to attract local guests, who fancy a weekend treat.
By negotiating fixed rates with suppliers, you protect your margin even if ingredient or labor costs rise. STR data shows that packaged bookings deliver 10% to 20% more revenue per stay compared to room-only bookings, while also lowering last-minute cancellations.

In markets with currency volatility, such as parts of Africa or South America, packaging services also allows hotels to quote and collect in U.S. dollars or euros, reducing FX losses and protecting net revenue.

Hotels heavily reliant on room-only rates are exposed to more than just pricing pressure. We cover this in detail in our blog on the top five financial problems small hotels face.

Turning unused spaces into Income

Some of our clients have utilized event spaces, gardens, rooftops, and even underutilized lobbies to chase additional revenue. All of these areas in a hotel can all be monetized. Small weddings, yoga retreats, co-working memberships, or hosting local markets can deliver new revenue streams with little capital investment.

The American Hotel and Lodging Association reported in 2024 that independent hotels adding event or co-working spaces increased annual revenue by up to 8% on average, often without major renovations.

The critical step is accurate costing. Labor, utilities, cleaning, and setup must all be accounted for. We have seen some hotels set flat space rental rates, only to find that when all costs are allocated, events barely break even. Of course, once they contact us, we help them review the profitability for each area.

Reducing OTA Commissions

OTAs represent over 50% of bookings for many independent hotels, based on Phocuswright’s U.S. Travel Agency Landscape report, but their commissions of 15%, and sometimes up to 25% can strip out tens of thousands in profit annually.

For a 50-room hotel charging $180 per night at 70% occupancy, shifting just 10% of bookings away from OTAs to direct channels can save over $45,000 per year.

Direct booking strategies, such as targeted email campaigns to past guests, retargeted ads, and loyalty offers like complimentary breakfast or upgrades, reduce acquisition costs and build repeat clientele.

Controlling FX and Payment Costs

For hotels serving international guests, FX spreads and card processing fees very quickly add up. A standard 3% card fee on $1 million in annual bookings equals $30,000 in costs before considering currency conversion charges.

Working with specialized payment providers or using multi-currency merchant accounts can cut these costs by 20% to 40%. Holding euros or dollars for supplier payments, rather than converting back and forth, prevents avoidable losses from unfavorable exchange rates. Antravia looks at this topic in another blog.

Track Profit by Department

Every revenue stream, whether rooms, F&B, spa, events, and retail, needs its own profit-and-loss tracking. STR’s 2024 Profitability Report shows that hotels that monitor departmental profit achieve 10% to 15% higher EBITDA margins because they can act quickly when costs rise or performance lags.

Many properties discover that their bar is subsidizing their restaurant, or that events, while busy, deliver little profit once labor is factored in. With proper reporting, hotels can renegotiate supplier contracts, reprice services, or cut low-margin activities.

For guidance on implementing the right systems, read our blog on accounting systems for independent hotels.

The Antravia View

In 2025, independent hotels cannot normally depend on rooms alone. The properties that succeed will diversify income, monitor profit at the department level, and control costs methodically. Packages, smarter-managed F&B, event income, and better FX handling can transform profitability.

Antravia works with hotels worldwide to design these structures, from accounting systems and forecasting to FX strategy and supplier negotiations. If you want to strengthen revenue beyond rooms and protect your margins, we can help.


Sources:

1. STR and CoStar – Hotel Profitability Benchmarks
   STR and CoStar reports are widely used for industry averages, including room revenue share and departmental profit benchmarks.

   • Overview: https://str.com/data-insights
     

2. Cornell School of Hotel Administration – Food Waste in Hotels
   Cornell research on buffet food waste estimates 5 to 12 percent of purchased food volume is wasted in buffet settings due to over-ordering and portioning errors.

   • Reference: https://sha.cornell.edu/faculty-research/centers-institutes/chr/research/
     

3. American Hotel and Lodging Association (AHLA) – Revenue Diversification
   AHLA data notes that small and mid-sized hotels adding event or co-working spaces saw up to 8 percent annual revenue growth, based on 2024 property performance studies.

   • AHLA Reports: https://www.ahla.com/research-reports
     

4. Phocuswright – OTA Market Share and Commissions
   OTA commissions for independent hotels typically range from 15 to 25 percent, with OTAs accounting for over 50 percent of bookings for many properties.

   • Phocuswright U.S. Travel Agency Landscape: https://www.phocuswright.com/Travel-Research
     

5. STR Profitability Report (2024)
   STR highlights that hotels tracking departmental profit (rooms, F&B, spa, etc.) see 10 to 15 percent higher EBITDA margins versus those reporting only total revenue.

   • STR Profitability Insights: https://str.com/press-releases
     

6. Antravia Client Experience and Internal Case Studies
   Practical insights on FX management, packaging, and departmental P&L tracking, drawn from Antravia’s consulting work with independent hotels globally.