Ancillary Revenue in Low-Margin Industries: What Event Ticketing Can Teach Us About

What Event Ticketing Can Teach Us About Sustainable Growth

In low-margin industries, revenue growth rarely comes from selling more of the same thing. Instead, the most successful businesses unlock ancillary revenue, income from services and products beyond the core offering. Event ticketing provides a compelling case study: it’s an industry where margins on tickets are thin, competition is fierce, and demand is highly elastic. The lesson? Ancillary revenue isn’t a “nice to have”, it’s a strategic pillar for sustainable growth.

Here’s the data-driven story.

What Is Ancillary Revenue? A Quick Definition

Ancillary revenue refers to income generated from sources other than the primary product. In airlines, that includes baggage fees, seat selection, and onboard services; in events, it can include merchandise, VIP upgrades, insurance, parking, food & beverage, and more.

In both cases, the core offering (a ticket) has limited pricing power, so real growth comes from add-ons that customers choose to buy.

Ancillary Revenue: A Proven Model in Airlines

Airlines pioneered ancillary revenue to offset razor-thin margins on base fares:

In 2024, global airline ancillary revenue surpassed $148 billion, with

some low-cost carriers generating more than half of their total revenue from ancillaries. Business Travel News

This model transformed airlines from being almost entirely dependent on base fares to capturing significant incremental revenue per customer, without needing to raise ticket prices.

Event Ticketing: Same Constraints, Same Opportunity

Event ticketing is fundamentally similar:

So where do event promoters and platforms find profit? Through ancillaries like:

• • VIP experiences and seating upgrades
• • Merchandise and digital collectibles
• • Parking and travel packages
• • Refund protection and service warranties
•  

Each of these ancillary lines can carry higher margins than the ticket itself, and, importantly, deliver perceived value to customers.

Why Ancillaries Work: Data-Driven Lessons

1. Unbundling Meets Consumer Choice

Much like airlines unbundle checked baggage and seat selection, events can unbundle experiences. Customers prefer choice and can be more willing to pay extra when it’s clearly optional and valuable.

2. Risk Protection Is Valuable

Products that reduce customer risk, refunds, flexibility, insurance, often sell at higher take rates than neutral add-ons. During periods of uncertainty (weather risk, performer cancellations, travel disruptions), refund protection becomes a purchase for peace of mind. These offerings not only diversify revenue but improve conversion and trust.

3. Ancillaries Drive Higher Spend Per Customer

While the base ticket price may be fixed, customers buying ancillaries increase the average revenue per transaction. In airlines, concessions like baggage and seats have become staple revenue drivers precisely because they can generate meaningful cashflow without heavy discounting of the core product. 

Illustration, Ancillary Impact in Events (Hypothetical)

Even modest uptake of ancillaries can significantly boost overall revenue per customer, often far more than discounting costs would erode margin.

Strategic Implications for Ticketing Businesses

1. Design ancillaries that solve problems, not just add options.

Services like refund protection address uncertainty and build trust, especially in unpredictable environments.

2. Integrate ancillaries contextually.

Placement at checkout, smart segmentation (e.g., targeting frequent attendees), and personalized recommendations increase uptake.

3. Measure real economics.

Track attach rate, conversion lift, incremental revenue, and impact on churn.

Final Takeaway: Don’t Treat Ancillaries as Afterthoughts

In low-margin industries like airlines and event ticketing, ancillary revenue isn’t peripheral, it’s foundational. The most resilient businesses view ancillaries as strategic products, not just add-ons.

That means focusing on value, clarity, and customer choice, whether the line item is seat selection, VIP access, or a refund-flexibility product that helps customers feel confident when they buy.

The opportunity isn’t just to make more money, it’s to build more sustainable customer relationships and predictable revenue. With the right mix of ancillaries, even low-margin models can unlock durable growth.