Business Model Innovation in Hospitality
Redefining hospitality through business model transformation
This is a continuation of part II and also this post concludes a three-part series by Pedro Calvo on innovation and strategy
In today’s travel and hospitality landscape, sustained growth is no longer driven solely by operational efficiency or asset optimization — it hinges on strategic business model innovation. As customer behavior shifts, digital ecosystems expand, and margins compress across traditional revenue streams, hospitality leaders must rethink how value is created, delivered, and monetized.
This framework outlines the seven core business models — adapted specificaly for the travel and hospitality industry — with practical, sector-relevant examples. It serves as a diagnostic tool and an innovation blueprint for identifying new revenue streams, increasing resilience, and unlocking scalable, repeatable growth.
Whether you're operating a global hotel brand, an OTA, an asset-light operator, or a destination experience platform, this breakdown enables you to:
Audit your current model mix
Spot adjacencies or untapped levers
Design hybrid strategies that align with evolving demand and digital infrastructure
In an industry increasingly shaped by platform economics, subscription behavior, and asset efficiency, mastering business model agility is not a differentiator — it’s a requirement.
The 7 business models — Travel & Hospitality
1. Sell a thing
💡 How it works: Sell a physical or digital product to travelers or guests.
🧳 Travel/Hospitality Examples:
Luggage brands: Away, Samsonite
Travel gear: Noise-canceling headphones, adapters, wellness kits
Hotel-branded products: Westin’s Heavenly Bed, Le Labo toiletries at boutique hotels
Digital travel guides & eBooks
⚙️ Strategy:
Create or source a product travelers love → Sell it online, in-room, in-flight, or through partnerships.
📈 Optimize: Unit economics
— Reduce production cost, increase perceived value, bundle with experience.
2. Rent a thing
💡 How it works: Let people temporarily use something you own.
🧳 Travel/Hospitality Examples:
Hotel rooms, vacation rentals: Marriott, Airbnb
Car rentals & scooters: Hertz, Turo, Lime
Luggage rentals: Rent Luggage, LugLess
Camera/gear rentals for adventure trips
⚙️ Strategy:
Buy or control an asset → Rent it repeatedly to travelers.
📈 Optimize: Consumption
— Maximize occupancy, turnarounds, and upsells (e.g. add insurance or premium access).
3. Take a cut
💡 How it works: Charge a percentage of transactions on your platform.
🧳 Travel/Hospitality Examples:
Online travel agencies (OTAs): Booking.com, Expedia
Tour marketplaces: GetYourGuide, Viator
Restaurant reservations: OpenTable
Travel affiliate platforms: Skyscanner, Kayak
⚙️ Strategy:
Build a platform people trust → Take a small cut of each transaction.
📈 Optimize: Gross Merchandise Value (GMV)
— Grow total transaction volume via better discovery, trust, loyalty, and supplier tools.
4. Charge a subscription
💡 How it works: Charge regularly for access to services or perks.
🧳 Travel/Hospitality Examples:
Loyalty programs: Priority Pass, American Airlines AAdvantage (with card fee)
Hotel/flight membership clubs: Inspirato, Surf Air, Selina CoLive
Travel deal platforms: Scott’s Cheap Flights (Going), Travelzoo Premium
Airport lounge access or fast-track security
⚙️ Strategy:
Offer recurring value (e.g. access, upgrades, flexibility) → Encourage ongoing commitment.
📈 Optimize: Engagement & retention
— Deliver clear value repeatedly (status, surprise perks, exclusive deals).
5. Charge based on usage
💡 How it works: Only charge when the service is used.
🧳 Travel/Hospitality Examples:
Hourly hotel bookings: Dayuse, ByHours
Carsharing by the minute/mile: Zipcar, Free2Move
Airport lounges by time or visit: LoungeBuddy
Flexible travel insurance (per trip or day): SafetyWing, Faye
⚙️ Strategy:
Let users try affordably → Scale as they travel more.
📈 Optimize: Consumption
— Lower friction to entry, make usage addictive or habit-forming.
6. Sell a service
💡 How it works: Provide travel-related services using human expertise.
🧳 Travel/Hospitality Examples:
Travel advisors and agents
Local guides and translators
Concierge services (in-hotel or virtual): Black Tomato, John Paul
On-demand airport assistants, wheelchair helpers, child care, photographers
⚙️ Strategy:
Develop expertise or access → Charge for time, skill, and experience.
📈 Optimize: Skillset leverage
— Use tech (AI, apps) to scale access, or create packages/retainers.
7. Advertising
💡 How it works: Monetize traveler attention.
🧳 Travel/Hospitality Examples:
In-flight magazines and videos (IFE): Delta Sky, United Hemispheres
Hotel room TVs, lobby screens, smart mirrors
Travel content platforms: Culture Trip, Conde Nast Traveler, The Points Guy
Airport media networks & taxi screens
⚙️ Strategy:
Attract or own an audience → Sell targeted reach to advertisers.
📈 Optimize: Traffic & attention quality
— Own niche audiences (affluent, luxury, digital nomads), geo-targeted reach.
🚀 Innovating the Business Model in Travel & Hospitality
In a market shaped by shifting guest behavior, compressed margins, and platform disruption, hospitality leaders must think beyond operational levers. True competitive advantage today lies in business model innovation — not just in what you offer, but in how you monetize it.
This framework explores how leading companies across the travel and hospitality value chain can drive sustainable growth by combining or replacing traditional revenue models.
🔁 Combine
1. Sell a thing + subscription
Inspiration: iPhone + iCloud
✅ Luxury hospitality opportunity
Offer boutique stays bundled with a lifestyle subscription.
Example: A wellness resort chain launches a monthly membership that includes virtual spa content, preferred booking windows, and member-only rates across all properties — extending brand engagement beyond the stay.
Think: Miraval meets Calm, with real-world privileges.
2. Take rate + subscription
Inspiration: Shopify + Prime
✅ OTA or Marketplace Opportunity
Layer a premium subscription onto your existing transaction model.
Example: A major OTA introduces a paid loyalty tier with guaranteed upgrades, waived change fees, and exclusive inventory — all while continuing to take a commission from suppliers.
Think: Prime for travelers, built into the booking flow.
3. Take rate + advertising
Inspiration: Amazon, Instacart
✅ Experience pltforms or Meta search engines
Monetize both volume and visibility.
Example: A destination experience platform charges suppliers a take rate per booking, while also offering sponsored placements and premium visibility packages to drive conversion.
Think: Revenue per click layered on top of revenue per transaction.
4. Advertising + subscription
Inspiration: NYT, Hulu
✅ Content-driven travel platforms
Free content fuels reach; premium access fuels loyalty.
Example: A travel media brand offers curated guides and destination content free with ads — and an ad-free, paid version with offline access, concierge chat, and curated itineraries.
Think: Culture Trip, but with a paywall for high-intent travelers.
🔄 Replace your model to expand margin or reach
🧳 From Sell-a-stay → Subscription
Inspiration: Dollar Shave Club
✅ Hotel group membership model
Transition from per-night pricing to monthly access across a network.
Example: A boutique hotel brand offers a subscription where members can stay up to X nights per month across its locations. Predictable revenue, optimized occupancy, and stronger loyalty.
Think: Selina meets Netflix for travelers.
✈️ From rent → Take rate
Inspiration: Uber
✅ Private aviation marketplace
Aggregate inventory, don’t operate it.
Example: Build a platform for underutilized private aircraft, taking a cut of each charter rather than owning the fleet — unlocking access without asset risk.
Think: Jet charter as a scaled marketplace, not a luxury rental.
💡 From Sell → rent
Inspiration: Rolls-Royce
✅ Hotel infrastructure as-a-service
Turn fixed assets into modular services.
Example: A luxury hotel brand licenses its wellness pods, smart room tech, and design IP to third-party operators for a recurring fee — turning CapEx into revenue.
Think: Branded hospitaity infrastructure, monetized at scale.
💳 From usage-based → subscription
Inspiration: AWS Reserved Instances
✅ Regulatory & compliance-as-a-service
Turn friction into loyalty.
Example: Instead of charging travelers per visa or insurance request, offer an annual “global traveler protection plan” covering multiple services across borders.
Think: SafetyWing or Sherpa, but with enterprise-scale predictability.
Great ads
🏨 Interesting reads
U.S. Hotel Revenue Growth Projections: CBRE forecasts a 2% growth in Revenue Per Available Room (RevPAR) for U.S. hotels in 2025, driven by modest increases in international visits, group demand, and business travel. However, profit margins may decline as expenses outpace revenue growth.
Staffing and Service Enhancements Crucial for Success: The American Hotel & Lodging Association (AHLA) emphasizes that expanding staff and enhancing services through new technologies are vital for hotel success in 2025. Despite staffing challenges, hotels are offering competitive wages and benefits to attract and retain employees.
Market Expansions and Openings
Marriott's European Midscale Expansion: Marriott International plans to double its Four Points Flex by Sheraton brand in Europe to over 50 properties by 2026, targeting middle-class travelers and focusing on secondary and tertiary cities. This strategy aligns with demographic trends and aims to fill a gap in Marriott's European portfolio.
Mews Surpasses 12,500 Customers: Hospitality technology platform Mews has achieved a milestone by serving over 12,500 customers worldwide, reflecting its accelerating global growth.
Notable Recognitions
Blackberry Farm's Culinary Excellence: For the second consecutive year, Blackberry Farm in Tennessee has been named the Best U.S. Hotel for Food and Drink. The resort is celebrated for its "foothills cuisine," seasonal ingredients, and exceptional dining experiences.
Operational Challenges
Impact of Online Reviews on Hospitality: The pervasive nature of online feedback requests is influencing customer behavior and mental well-being. This trend poses challenges for businesses in managing authentic reviews and maintaining reputations.
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If you're interested in adding your special offer to a list of hospitality deals, you can reach out to hotelindustryinsights@gmail.com.
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Good article!