Marriott's all-in on all-inclusives was overdue, experts say

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A rendering of NIA in Riviera Nayarit, Mexico, where Marriott International will have four all-inclusives.
A rendering of NIA in Riviera Nayarit, Mexico, where Marriott International will have four all-inclusives.

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 modernize."

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."

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