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Airlines aren't the only industry collecting fees, study shows

November 18, 2012|By Hugo Martin
  • Disney Parks and Resorts generates nearly half its revenue from food, drinks, merchandise and other charges, a new study shows.
Disney Parks and Resorts generates nearly half its revenue from food, drinks,… (Disney )

The global airline industry is expected to pocket more than $36 billion in passenger fees this year, including charges to check bags, connect to onboard Wi-Fi and purchase food and drinks. In total, that represents about 5.4% of the industry’s overall revenue.

But a company that helps airlines maximize airline fees noted in a study released last week that many other industries also rely heavily on so-called “ancillary revenue.”

For example, Disney Parks and Resorts gets 49% of its revenues from charges for everything other than park admission, including food, drinks and merchandise, according to Wisconsin-based IdeaWorks Co. Norwegian Cruise Lines makes about 30% of its revenue from food, drinks and spending at spas and casinos on its ships, it said.

Parking fees, plus the sale of food, drinks and merchandise, among other charges, bring in 18% of revenues for concert promoter and entertainment company Live Nation Entertainment, the study found.

“Ancillary revenue has become popular with companies for good reason; it delivers billions of dollars, euros, and kopeks to industries starved for cash,” said Jay Sorensen, president of IdeaWorks.

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Follow Hugo Martin on Twitter at @hugomartin

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