Exclusive Feature: Why marine and underwater excursions are the most mismanaged ancillary category in coastal hospitality.

Every resort I have managed had a reef, a wreck, a marine reserve or a stretch of coastline within twenty minutes of the front door. In each of them, the excursion business — the boats, the dive trips, the submarines, the catamarans — was being run by someone else, often for someone else, and earning someone else most of the margin.

It took me longer than it should have to understand that this was a choice, not a given. What follows is the conversation I wish I had had with myself ten years earlier, and the one I now have with every hotel team that asks me how to read the line on their P&L that says “ancillary revenue”.

The line on the P&L that nobody fights for

In most coastal resorts, ancillary revenue is a line that gets reported but not managed. Marine excursions, the largest piece of that line, are usually the part that gets the least attention from the people who should care most about them. I have watched this happen in three properties before I understood I was watching the same pattern repeat.

There is a curious silence in most coastal resort comités de dirección. We talk for an hour about RevPAR. We talk for forty minutes about F&B capture rates and breakfast covers and beverage margin. We talk for twenty minutes about housekeeping productivity and complaint resolution. And then, at the end of the meeting, someone reads out the ancillary number — a line that often represents fifteen to twenty per cent of the revenue of the property — and we move on.

I spent years in that meeting. I have managed properties in the Canary Islands and in the Caribbean where the marine excursion economy around our hotel was larger, in absolute terms, than our F&B operation. And I treated it, structurally, as a concierge function. Bookings went out to a third party. Commissions came in. The guest experience was somebody else's responsibility. The margin was somebody else's win. The data on which excursions worked for which guests went home in the head of the booking agent every night and never made it onto my dashboard.

It took me three properties and one honest conversation with a finance director — who asked me, without irony, why the line marked excursions and activities on our P&L was so small relative to the marine economy visible from our beach — to start asking the question properly. The answer, in every property where I have asked it since, is broadly the same: we do not treat marine excursions as a revenue category. We treat them as a convenience the concierge provides. And we leave the margin on the boat.

The day I understood the size of what was passing through my lobby

Once I started reading the marine excursion segment as a market — with operators, platforms, distribution costs and ticket economics — I could not unsee it. The industry data on this segment is no longer marginal. It is one of the largest pieces of the global tours and activities market, and most of the revenue is being captured by people who do not work for the hotel.

The global tours and activities market is now sized at over three hundred billion dollars, the third-largest pillar of tourism after accommodations and air travel. Within it, marine and water-based activities account for around sixty-seven billion — second only to city and cultural tours. Boat tours and yacht charters lead the marine segment, followed by diving and snorkelling, jet ski and motorised PWC, paddle sports, sport fishing, whale watching, and a small but high-margin sub-segment of passenger submarine excursions.

The distribution side has consolidated rapidly. Three platforms — Viator (owned by TripAdvisor), GetYourGuide and TUI Musement — now process an estimated combined fourteen and a half billion dollars in tours and activities GMV. Klook dominates Asia-Pacific. Civitatis leads the Spanish-language market. Below the top tier, specialists like Headout, Tiqets and Manawa compete on local depth. The shore excursion segment, in particular, has been organised by ShoreExcursionsGroup and cruise-line in-house teams.

And there is a sub-segment that operators tend to underestimate completely. Passenger submarine excursions are a two-billion-dollar global category dominated, by an embarrassing margin, by a single Canadian operator — Atlantis Submarines, twelve vessels, eighteen million passengers in their history, operations in Hawaii, Barbados, Aruba, Cozumel and Guam. In Spain, Submarine Safaris has been running submarine excursions out of Lanzarote since 1998. Sub Fun Tres operates out of Tenerife. These are the only commercial subaquatic excursions in Europe outside Norway, and yet most resort general managers in the Canary Islands could not tell you what they cost.

I include these numbers not as a sector analysis but to make a point about scale. The guest who is staying at your hotel and asking your concierge to book them a snorkel trip is the same guest who, somewhere else in the trip planning, paid a platform for the booking, paid a margin to the operator, and contributed to a sixty-seven-billion-dollar global economy that your property is, in most cases, watching go by.

What I started doing in the second half of my career

There is a thing about discovering a pattern late in a career: you do not get to rebuild your past properties, but you do get to rebuild the way you walk into the next one. Here are the three changes I now make in every coastal resort engagement before the first comité de dirección.

The first change is the simplest and the most refused. I ask, on day one, for a discrete profit and loss for ancillary revenue, broken down by category. Not as part of other income. Not as a footnote. As a managed line. If the property does not have the data, we build it. If the property cannot build it, that is the first diagnostic finding of the engagement, and it tells me — and the owner — how the asset has been managed for as long as the gap has been there.

The second change is operational. I sit down with the head of guest relations, the concierge team and — crucially — whoever is currently booking excursions for our guests. I ask which operators we work with, what commission structure we have, what the guest satisfaction data looks like by operator, and what the typical guest profile is for each kind of excursion.

The answers, in nine out of ten properties, reveal that we are working with a default set of operators selected years ago by someone no longer at the hotel, on commission terms that have not been renegotiated, with no tracking of guest experience by operator. That is not a vendor management strategy. That is benign neglect.

The third change is strategic. I bring the conversation about ancillary revenue out of the back office and into the comité de dirección, and I keep it there. Not as a monthly report read out at the end of the meeting, but as a category with its own owner — usually the F&B director, sometimes a dedicated ancillary manager — and its own dashboard. The category gets the same kind of management discipline as F&B or spa: capture rate per guest, average ticket size, gross margin by product, guest feedback by operator, churn analysis on repeat guests.

None of these three changes requires new technology. None requires new headcount. What they require is the management decision to treat marine excursions as a managed category rather than as a courtesy. The decision is free. The consequences, in every property where I have seen it implemented honestly, are not.

The four operating models — and choosing one on purpose

Once a property decides to manage the category, the next question is structural: how do we participate in it? There are essentially four positions a hotel can take. Most properties end up in one of them by default. Very few choose the one they are in.

The first position is in-house operation with proprietary fleet. The resort owns the boats, the dive equipment, the staff. Margins are highest — fifty to sixty-five per cent gross is not unusual — but capital intensity and operational complexity are significant. This position fits ultra-luxury island resorts with controlled marina access. Four Seasons in the Maldives, Anantara in Thailand and Iberostar in selected Caribbean resorts all run pieces of their marine programme in-house. It is not for everyone, but for the properties that fit, it is the model that delivers both the margin and the brand control.

The second position is exclusive partnership with a branded excursion operator. The resort selects one or two preferred operators per activity, integrates the booking into the hotel CRM, and works on revenue share — typically fifteen to twenty-five per cent. This is the fastest-growing model, and the one I most often recommend for properties without the appetite for in-house operation. Mandarin Oriental, Rosewood and Marriott's luxury brands have moved decisively in this direction. The key is that the partnership has to be actively managed: same operator for five years without performance review is not a partnership, it is an arrangement.

The third position is platform integration with global aggregators. The hotel or brand group integrates directly with Viator, GetYourGuide or TUI Musement via API. The guest can browse the full excursion catalogue from the hotel app. Margin is the lowest of the three active models — typically five to twelve per cent commission — but operational simplicity is highest. This fits large brand groups managing many properties across many destinations. It does not, in my experience, fit single resort operations that have local options for a higher-margin model.

The fourth position is the one most properties are in: concierge-led booking with no formal partnership. The legacy model. Margin is minimal. Guest experience varies by concierge. The property captures no structured data on which excursions resonate with which guest profiles. Increasingly uncompetitive in segments where guest expectations include integrated digital booking. The reason most properties are still here is not strategic. It is that nobody has ever stopped to choose otherwise.

What this is really about

I am writing about marine excursions, but I could be writing about any large ancillary category that the hospitality profession has historically treated as a courtesy. The argument generalises. The discipline does not.

The properties I respect most are the ones where someone, at some point, stopped treating ancillary revenue as the residual line on the P&L and started treating it as a managed business inside a managed business. Marine excursions are simply the largest and most underleveraged version of this pattern, particularly in coastal and island resorts where the activity economy outside the lobby can be larger than the F&B economy inside it.

What I would tell a younger version of myself, or a general manager who has just taken over a coastal property and is looking at their first ancillary report, is this: the size of the marine excursion economy around your hotel is not a market condition you respond to. It is a P&L category you have not yet decided to manage. The decision is yours, and the consequences of either choice are also yours.

The hotel professional I am today is the one who reads the line marked excursions and activities on the P&L with the same intensity I read the line marked rooms revenue. Not because the lines are the same size — in most coastal resorts they are not, yet — but because the size of one of them is a fact, and the size of the other is a choice. The hotel professionals who understand this distinction in the first half of their career will manage assets that look very different by the end of the next cycle from the ones managed by professionals who continue to treat ancillary as a courtesy.

There is a reef behind every resort I have ever worked in. The question is not whether it is there. The question is whether the hotel has decided to manage its relationship with it. In most properties, the answer is still no — quietly, by default, for reasons that no one would defend explicitly if asked. I write this hoping that a few more properties will decide, deliberately, to answer the question the other way.

Juan R. Sánchez-Harguindey is a General Manager and CFO with over 25 years in hotel management and food service operations. He held CFO roles with Meliá Hotels International in Cuba, Lanzarote and Cape Verde, managed Gate Gourmet operations in Cancún and directed Newrest in Tenerife for nearly seven years. He led the financial restructuring of Ten Bel Turismo through insolvency proceedings in 2020-2022. He operates from Tenerife, Canary Islands, through Harguindey Hospitality Consulting.

harguindey.eu / juanharguindey@gmail.com

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