Growing Hilton-Playa alliance benefits both

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The Royal Playa del Carmen will be renamed the Hilton Playa del Carmen.
The Royal Playa del Carmen will be renamed the Hilton Playa del Carmen.

PLAYA DEL CARMEN, Mexico -- Hilton's decision to expand its alliance with Playa Hotels & Resorts is poised to give both players a leg up in the fast-growing all-inclusive market.

The partners announced plans to renovate and reflag the Royal Playa del Carmen in Mexico and Dreams La Romana in the Dominican Republic under the Hilton banner last week, with Playa Resorts set to manage both properties. (The Dreams La Romana is owned by Playa Resorts and is currently managed by AMResorts, owner of the Dreams brand.) 

In addition, Hilton and Playa plan to convert up to eight more all-inclusives throughout the Caribbean and Mexico by 2025. The pair are already aligned at the all-inclusive Hilton Rose Hall Resort & Spa in Jamaica.

Tyler Batory, vice president of travel, lodging and leisure for financial-services firm Janney Montgomery Scott, said the extended partnership holds major upside for both parties.

"Hilton benefits from more resort properties and additional franchise fees, while Playa benefits from increased scale, more attractive OTA contracts, additional direct business and incremental meetings and incentive groups," Batory said, adding that the move is also "a positive for the Playa development pipeline." 

The Royal Playa del Carmen and Dreams La Romana -- which will be renamed the Hilton Playa del Carmen and the Hilton La Romana later this fall -- will begin renovations of their guestrooms, restaurants, bars and public spaces in November, with completion targeted for late 2019. 

The Hilton La Romana will split into two separate resorts, offering both a 344-room all-inclusive, adults-only concept and a 412-room all-inclusive, all-ages concept, while the 513-room Hilton Playa del Carmen will continue to be an all-inclusive, adults-only property. Playa estimated the total spending for both projects at around $50 million to $54 million. 

Mie Morgan, product development manager for Mexico, Costa Rica and the Caribbean at Classic Vacations, said, "Just having the Hilton name will make a big difference and will open more doors for both resorts. People have apprehension when visiting countries they're not used to, and having a worldwide, renowned brand like Hilton helps ease those concerns." 

Margie Hand, a travel adviser and Caribbean expert with Andavo Travel, said Playa is also well positioned to benefit from the Hilton Honors loyalty program, which has close to 80 million members. Both converted properties will enable guests to earn and redeem Hilton Honors points.

"For guests, I think the big thing will be [the ability] to redeem points or earn additional points," Hand said. "I think reward members will be attracted to these properties, and this gets consumers to these properties that might not have even looked at them before."

She added that she believes more luxury travelers will also be drawn to all-inclusives as the segment continues to see more activity at the high end.

Likewise, Playa is hoping its travel adviser partners will be able to leverage the Hilton Honors program.

Playa executive vice president and chief marketing officer Kevin Froemming said, "Travel agents have told me that they often don't have access to those customers who are interested in points offers. At Playa, we have built our brand on the trade, so we're looking to integrate point collection so that travel agents always have the ability to service those guests.

"We're working on a solution with our agents so that they have the ability, if a customer comes to them and they're a Hilton Honors member, to get those customers their full points." 

The Hilton Playa del Carmen and the Hilton La Romana will join Hilton's existing all-inclusive portfolio of 11 properties. Playa Resorts owns and/or manages 20 resorts across Mexico, Jamaica and the Dominican Republic.

Meanwhile, Playa is in expansion mode with Hyatt, recently detailing plans to open the Hyatt Zilara Cap Cana and Hyatt Ziva Cap Cana in the Dominican Republic next year. The company's other Hyatt-flagged properties include the Hyatt Zilara Cancun, Hyatt Ziva Cancun, Hyatt Ziva Puerto Vallarta and Hyatt Ziva Los Cabos in Mexico as well as the Hyatt Zilara Rose Hall and Hyatt Ziva Rose Hall in Jamaica.

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