- Debbie Carlson
How all-inclusives are evolving experience, audience
Twenty years ago, all-inclusive ?resorts had a reputation of catering to budget-conscious, mass-market travelers who wanted nothing more than a few pool games and all the food and drinks they could consume.
Today, this segment is evolving to attract the experience-seeking traveler who will pay for luxury and planned excursions. It’s attracting big brands, too: Hilton has inked an alliance with Playa Hotels & Resorts, and Apple Leisure Group has struck an alliance with Spain’s NH Hotel Group. In addition, all-inclusive pioneer Club Med plans to open an average of five resorts annually over the next five years.
Hilton Playa del Carmen will be among the first branded all-inclusives under the new Hilton-Playa deal.
While the concept dominates in Mexico, the Caribbean and Spain, hotels need think about how to establish themselves in this unfamiliar territory, say sources.
All-inclusive resorts are attracting higher-spending travelers, says Xavier Mufraggi, CEO for Club Med North America and the Caribbean. Beginning in autumn 2008, amid the global financial crisis, Club Med saw bookings from a wider, more affluent audience as luxury travelers sought package travel bargains. “Affluent and even very wealthy people are interested in the convenience,” he says.
This year, Apple Leisure allied with Mexico’s Grupo Hotelero Santa Fe to co-brand three resorts. “As more players enter the segment, owners will need strategic partners with a clear understanding of the market and changing travelers’ preferences in order to stay competitive,” Apple Leisure Executive Vice President Javier Coll says.
To attract the luxury consumer and get away from all-inclusive’s reputation of being cheap quality, says Kelly Poling, senior vice president of marketing for Karisma Hotels & Resorts, the company created the term “gourmet inclusive.”
“We’re signaling to the market that this is a chef-curated restaurant, this is top-shelf alcohol ... and an unbelievable level of customer service,” she says, adding that restaurant Le Chique at Azul Beach Resort Riviera Cancun has been voted the No. 1 restaurant in Mexico.
Sergio Saenz, principal at designer Chicago’s HKS Architects says hotels moving into all-inclusive must think carefully about how they meet guest expectations— tailoring it as a journey through F&B and experiential offerings.
Because of the multiple offerings at all-inclusive resorts, there are challenges to making it profitable. Both Mufraggi and Saenz says hotels need to first focus on the experience, then the cost. Start with the client base and understand how much they are willing to spend on the vacation, Mufraggi says. “If you’re an American, how much are you willing to pay to ski in St. Moritz?” he says.
One of the most popular experiences is around wellness, says Dervla Louli Musgrave, founder and editor-in-chief of Compare Retreats, which focuses on luxury wellness retreats. And it’s a perfect fit for all-inclusive resorts. “What people really like is it means that they can turn off the decision-making part of their brain, which allows them to actually create more space and it allows them… to relax,” she says.
Poling says Karisma’s marketing hits hard on the experience, since that plays well with millennial guests. The message is evolving, but it’s highly visual: videos of bartenders making craft cocktails and scenes that give an intimate, first-person viewpoint. Social media influencers, bloggers and celebrities are also employed.
“We do a lot with earned media because everybody loves to come down to visit. And when they do, they’re more than happy to tell everybody about it,” she says.
Beyond the Caribbean
Yes, the all-inclusive segment is heavily focused on the Caribbean and Mexico, helped by cheap labor costs, and Hilton Vice President of Development for Latin America Juan Corvinos says the company is focused on opportunities in the Caribbean and Latin America that are?between a three- and five-hour flight from the U.S. But while low-cost labor helps, it is possible to do all-inclusive outside these regions.
Mufraggi says one of the fastest-growing areas for Club Med is ski resorts. Club Med’s research shows “major, major appetite for that business model. Skiing in Canada or the U.S. is getting expensive. People want the convenience and the experience (of all-inclusive), and it’s not existing today.” He says having clusters of resorts near each other, such as the company has in the Alps, helps with spending since costs are spread among facilities.
Richard Millard, chairman and CEO of operator Trust Hospitality, Coral Gables, Florida, agrees the all-inclusive segment has geographic legs, but Latin America has some impossible-to-replicate advantages, namely great year-round weather and immaculate beaches. Trust Hospitality runs several Caribbean all-inclusive properties and just opened its first non-Caribbean resort, Sheraton Bijao All-Inclusive Resort in Panama.
With the Westin and Sheraton brands, Marriott is dipping its toe into all-inclusive. Millard, who says he has no insight on Marriott’s plans for further all-inclusive resorts, says the two companies will “learn as we go along. I think you’ll see it proliferate. Whether it will be a Sheraton in the long run, I have no clue.”