Ytterbium-doped potassium rare-earth double tungstate thin films are excellent candidates for highly efficient waveguide lasers, as well as high-gain waveguide amplifiers, with a record-high optical gain per unit length of 935 dB/cm recently demonstrated. However, the spectroscopic properties of these highly ytterbium-doped thin films and, in particular, their temperature dependence are not well investigated. These characteristics are required for the understanding of the behavior of the fabricated optical devices and crucial for further device optimization. We experimentally determined the absorption cross-sections for a potassium ytterbium gadolinium double tungstate, KYb0.57Gd0.43(WO4)2, thin film grown lattice matched onto an undoped KY(WO4)2 substrate. At room temperature, the peak cross-section value at 981 nm and the overall absorption spectrum are very similar to those of Yb-doped bulk potassium double tungstate crystals, although Yb is now the dominating rare-earth content. The temperature-dependent study shows a significant decrease of the absorption cross-section values at 933 nm and 981 nm with increasing temperature. We verify theoretically that this is due to the temperature dependence of fractional populations in the individual Stark levels of the absorbing crystal-field multiplet, in combination with the linewidth broadening with increasing temperature. Further investigations suggest that the broadening of absorption linewidth at 981 nm originates in the intra-manifold relaxation between the two lowest Stark levels of the ground state. Finally, the implications of the spectroscopic findings on the operating characteristics of waveguide amplifiers are investigated. Amplifiers operating at 80 °C are expected to exhibit only 67% of the maximum theoretical gain at room temperature.