Travel product: the rise of the upscale all inclusive

All-inclusive packages drive a larger percentage of revenue for travel advisors than any other travel product except for cruise and airfare, according to the 2019 Travel Industry Survey. The product has traditionally been a steady revenue driver for advisors, particularly for smaller and home-based agents.

However, John Tarkowski, president of Apple Vacations, where historically more than 95% of business is all-inclusive, said the company's products are becoming more attractive to even the largest agencies, as Apple continues to introduce higher-end and more sophisticated hotels and resorts. Senior editor Jeri Clausing spoke with Tarkowski about the trends and the evolution of the sector.

Q: In past years, all-inclusives have represented a bigger chunk of home-based and smaller-agency business than that of larger, traditional agencies. Is that what you've seen?

A: Apple Vacations works with all sizes of agencies, and I don't see a difference between the ICs and larger agencies. Perhaps as a percentage of their overall business, the bigger agencies may be doing more corporate business, which skews the numbers. But the majority of our business is done from the traditional agencies.

Q: What do you think is driving more business from larger and more traditional agencies? Is it related to your introduction of more high-end products?

A: Yes, as the all-inclusive product has gotten more sophisticated and higher-end, I think they now are attractive to a higher-end customer who previously may have been resistant to the all-inclusive product. You now have so many great all-inclusive hotels that provide a selection of gourmet, a la carte meals and top-shelf liquors.

Q: Are you doing anything to actively increase sales by agencies that have not traditionally booked your vacations?

A: We are. About a year ago, we added to our sales team a business development specialist team that solely focuses on agencies with limited production with our brand to help educate them about our brand, the products we offer and the value that we bring.

Q: What types of agencies do you expect the most business from, and are there specific types of agencies that you would like to see more business from?

A: We expect the majority of the business to come from our top partners, as it does today, which is a mixture of traditional agencies, host agencies and at-home agencies.

Obviously, the growth in the industry is the host/IC model and at-home agencies, so the growth will come from there. We don't necessarily care where the growth comes from as long as the agency knows our business, knows our products and can add value to the customer experience.

Q: Do you think your upcoming additions of packages to the South Pacific, Europe and more U.S. destinations will help build a broader base of agencies looking to your products?

A: We really decided to add these products for those agencies that are loyal to the Apple Vacations brand but were forced to book these products elsewhere because we didn't offer them. Several of the consortia accounts we work with were also interested in Apple Vacations expanding so their members could keep more of their business with preferred vendors. If this expansion also results in a broader base of agencies booking our brand, that is icing on the cake. 

Q: What other trends are you seeing when it comes to agencies and all-inclusive products?

A: I am seeing the agents booking the all-inclusive products booking more and more higher-end resorts. The vast majority of what the agents and consumers seem to want are in the [upscale] categories. The product has gotten so good and the value is such that consumers are willing to pay a little more for a higher-end experience.

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