"What would you like to drink?"
Is there a way to understand when one uses xiang, when one uses yao and when one uses xiangyao ?
Sometimes the 想 is necessary because 要 will sometimes be used to mean "will." For instance, "你明天要做什么?" Colloquially, this sentence is often used to ask what you plan on doing tomorrow, not what you want to do tomorrow. In this case, you would use 想 or 想要 rather than just 要 to ask what someone wants to do tomorrow. As far as I know, there is no real difference between saying 想 and 想要. 想 does mean "think," but it can also mean "want" depending on the context. Right now I can't think of any situations where you must use 想要 for clarity over 想, but perhaps there is a situation where 想 could be either "think" or "want." In that case, saying 想要 would be necessary. More often than not, though, people simply use 想 because it is shorter and therefore simpler to say and understand.
Better English here would be a more formal "Which beverage would you like?" More informally you would hear someone say "你想喝点儿什么呢？" --- What would you like to drink?
Then again, given the imprecision in Chinese - English / English - Chinese translation sometimes, who cares?
It's pretty unusual to hear anyone use the word 'beverage' in this context - even in a formal environment. My understanding of 'beverage' is that it's mainly a commercial term for any drink other than water.