Like jeans and cell phones, travel fads often come back, but never in quite the same way as before. All-inclusive resorts are currently enjoying a huge surge in popularity – without the mediocre buffets, bottom-shelf piña coladas and cheesy entertainment of decades past, according to Forbes.
This new wave of all-inclusives is all about luxury, offering a range of amenities from gourmet meals to personal butler service and high-end experiences unique to each region. It is worth noting that many of these properties are launched by luxury hotel companies that are entering the all-inclusive arena for the first time.
This is due to a post-pandemic shift in consumer mindsets driven by surging travel demand combined with high decision fatigue. "People are really looking for no surprises in terms of what's included," says Brian King, Marriott International's president for the Caribbean and Latin America. "They just want to go explore, enjoy, and really want to pay once and be done." While all-inclusive is not a new segment, he continues, "I think the trends have changed quite dramatically."
The pitfalls of previous decades
In previous decades, many all-inclusive resorts were traps, designed to keep guests inside. In 2023, says King, guests “want to go beyond the door” and are looking for a quasi-mediator service based on curated and designed experiences. These vacationers are looking for great options, but they never want to feel programmed.
King calls the formula “E squared,” like Entertainment x Education. At the Westin Costa Rica, for example, guests can play golf on a course designed by Robert Trent Jones II, explore the wild in the national parks on an ATV, or take a canopy tour. There are also Spanish lessons, cooking demonstrations, cocktail tastings and tai chi and yoga classes. “We create these events that are supposed to be fun and educational at the same time,” says King. "When you hit the 'E' on the square, you've won the consumer."
Last year, Marriott, the world's largest lodging company, had revenue of $21 billion, a 50% increase from 2021. During the company's results presentation, Marriott CEO Anthony Capuano has frequently mentioned the all- inclusive as a key growth area for the company, with many of Marriott's luxury brands entering this space. “We are working on our first Ritz-Carlton all-inclusive deal. We're very excited about it,” King said, noting how successful the Ritz-Carlton vessel is, with one luxury ship scheduled to launch in 2021 and a second coming in 2024.
"Playground" for adults only
"We're also putting the W in the all-inclusive space, and this will be an adults-only playground," King says of the first all-inclusive W hotel. It's slated to open in 2025 in the Dominican Republic with 349 rooms and suites. eleven restaurants and bars, three swimming pools and a spa. "We also have our Westin that we opened last year in Brazil, which has been extremely successful as a family all-inclusive."
It would be easy to credit Marriott's success with all-inclusives as a brilliant turnaround in post-pandemic times. But planning actually began long before the onset of Cocid-19, when company executives recognized that leisure activities were growing faster than other segments. As part of Marriott's 2016 merger with Starwood Hotels, it inherited Westin's then-only all-inclusive resort, the Westin Golf Resort & Spa, Playa Conchal in Costa Rica. The resort then became a training laboratory for Marriott to… embellish its all-inclusive credentials.
Marriott is in the enviable position of being able to leverage its 177 million member Marriott Bonvoy loyalty program.
The change in the industry
Travel consultants say the big change in the industry is impossible to ignore. "In three years, Marriott has gone from an all-inclusive hotel to 30, with more in the pipeline," says Cory Hagopian, vice president at Virtuoso, the world's largest luxury travel network. He adds that French accommodation giant Accor plans to quadruple the number of all-inclusive Rixos properties.
Hardly a month goes by without a luxury behemoth teaming up with an all-inclusive brand. Late last year, InterContinental Hotels announced a long-term agreement with Spain's Iberostar Hotels & Resorts, bringing around 70 all-inclusive hotels to IHG's portfolio. Hilton now has a dozen all-inclusive properties, including the 735-room Hilton Tulum Riviera Maya, the company's largest resort in the Caribbean.
And then there's Hyatt, whose $2,7 billion acquisition of Apple Leisure Group in 2021 made it the world's largest operator of luxury all-inclusive hotels, now spread across nine brands with more than 120 resorts in 40 seaside destinations and 11 countries.
Mexico, Caribbean and Latin America
By the end of 2023, Hyatt's Inclusive Collection will include more than 45 resorts in Mexico alone. Upcoming openings in Mexico include adults-only hotels like Secrets Tulum Resort & Beach Club, as well as the family-friendly Dreams Estrella Del Mar Mazatlan, a resort that features a water park, lazy river, multiple pools and 350 suites that each has a view of the Pacific Ocean.
"Growing the all-inclusive brand footprint is central to Hyatt's commitment to delivering new luxury travel experiences," says Erica Doyne, vice president of the company's all-inclusive portfolio. "We plan to open five Inclusive Collection resorts in Mexico and the Caribbean this year, as well as five additional properties in Bulgaria." Also on the schedule is the long-awaited debut of luxury brand Dreams in Portugal, with Dreams Madeira Resort Spa & Marina opening in early 2024.
While Mexico, the Caribbean and Latin America are "the basket of all-inclusives," says Marriott's King, Europe isn't far behind. “And ultimately, I see all-inclusive expanding globally and into Asia. So it's a global trend, there's no doubt about it."
Doyne sees all-inclusives as a potentially important growth driver for Hyatt in Europe. "With 46 European all-inclusive resorts in the Inclusive Collection portfolio, we currently offer resorts in Spain and Greece, with Bulgaria and Portugal soon to follow," he says.
The change brought about by the 2008 recession
Hagopian believes global economic conditions are also contributing to the rise of all-inclusives, noting that the 2008 recession also accelerated the attraction of affluent travelers to the segment. "More high-end consumers have become willing to experience the all-inclusive resort experience," he says. “Today there is a new set of consumer priorities around connection, wellness and authenticity. All-inclusive resorts must respond to these new priorities, moving beyond the original model that was more convenience and budget oriented.”
A striking example is Club Med, a pioneer of the all-inclusive concept in the 1950s, which has just announced a "brand new renewed and modernized brand identity" called L'Esprit Libre (The Free Spirit) that promises a premium experience for the visitors.
Club Med's expansion includes the launch of the Exclusive Collection portfolio of five-star resorts, villas, chalets and even a yacht, "taking luxury to the next level"
The rebranding comes at the right time, says Kevin Armstrong, senior director of Club Med North America and the Caribbean. "Club Med is redefining the market for all-inclusive resorts that offer premium vacations."
SOURCE: OT (link is external)