With all-inclusive resorts long a staple in
Mexico and the Caribbean, Marriott International's recently unveiled plan to
expand significantly into the sector is seen by some as long overdue.
"I was very surprised they hadn't done it sooner,"
said Geoff Millar, co-owner of Ultimate All-Inclusive Travel and Ultimate
Hawaii Vacations. "But in the early days, chains like Marriott and Hilton
didn't really think of all-inclusives as competition. Back then, all-inclusives
were like three-star summer camps. But over the years, all-inclusives have
really upped their game. They've become legitimately competitive."
Marriott said earlier this month that it would grow
its all-inclusive footprint under several of its luxury and full-service flags,
including Ritz-Carlton, Luxury Collection, Marriott, Westin, W, Autograph
Collection and Delta.
The company's initial management plans call for a new
650-room Autograph Collection resort in Punta Cana, Dominican Republic, and
four separate resorts that will open as part of NIA, a new, 220-acre
development on Mexico's Riviera Nayarit: a 240-room Ritz-Carlton, a 400-room
Westin, a 300-room Autograph Collection resort and a 500-room Marriott. The
five resorts are scheduled to open between 2022 and 2025.
"We don't have a forecast for you about how big this
[all-inclusive] business will get, but we do know that it is increasingly
popular among leisure travelers," Marriott International CEO Arne Sorenson
told investors during the company's Q2 earnings call in early August. He added
that Marriott is also eyeing all-inclusive opportunities throughout the
Mediterranean and the Asia-Pacific region.
Prior to making its announcement, Marriott had dabbled in
the space with the Westin Golf Resort and Spa in Playa Conchal, Costa Rica, an
all-inclusive property managed by the company since 2016. Marriott has also historically offered some inclusive dining
plans and other packages at its resorts.
Having a sizable all-inclusive business will undoubtedly
appeal to members of Marriott's Bonvoy loyalty program, providing yet another
avenue through which they can earn and redeem points.
Margie Hand, a travel adviser with Andavo Travel in
Birmingham, Ala., said, "I have quite a few clients who are Bonvoy members
who have points and have always wanted to do the Caribbean, but there have been
few options. This will be fantastic for them."
Hand added that all-inclusives have also proven particularly
popular among multigenerational family groups and that Marriott will be well
positioned to attract that fast-growing segment of the market. While some
Marriott all-inclusives, including those under the W flag, will cater to
adults, others, like the Marriott brand, will be family-friendly.
"Multigenerational travel has become huge," Hand
said. "And all-inclusive is really perfect for them. Families don't want
to worry about what everyone is spending."
Not surprisingly, Marriott isn't the only big player looking
to tap into the upside of all-inclusives. Hyatt and Hilton have already jumped
into the Caribbean market and Mexico's all-inclusive sector, with the former
developing its family-friendly Hyatt Ziva and adults-only Hyatt Zilara brands
in collaboration with Playa Hotels & Resorts in 2013 and the latter
announcing a major expansion of its own partnership with Playa late last year.
Hyatt has six all-inclusives under its Ziva and Zilara flags
in Mexico and Jamaica, while Hilton has the Hilton Rose Hall and Hilton Playa
del Carmen in Jamaica and Mexico, respectively.
Both companies have plans to enter the Dominican Republic,
as well. Hilton and Playa are nearing completion of the Hilton La Romana, a
conversion and renovation project that will have both adults-only and
family-friendly sections, while Hyatt and Playa have plans to open the Hyatt
Zilara Cap Cana and Hyatt Ziva Cap Cana by Nov. 1.
Meanwhile, even as the all-inclusive category reaches new
heights in terms of quality and service, Lindsey Epperly Sulek, founder and CEO
of Epperly Travel in Atlanta, suggested that the investments made by Marriott,
Hilton and Hyatt could spur further improvement across the segment.
"There's still sometimes such a negative stereotype
with the word 'all-inclusive,'" Epperly Sulek said. "So when big companies
come in and do it right, I think you end up with new fans of the all-inclusive
model. And in turn, I think that will cause other brands to have to adapt and
Millar agreed that the flurry of new entrants will pressure
competitors to improve and that the rising tide will lift all boats.
"There's a whole
market of people out there who are, say, Marriott- or Hilton-loyal and have
never experienced an all-inclusive," he said. "When they experience
it, they might really enjoy it and then ask what else is out there. And other
brands need to prepare to catch that market overflow."