Big Hotel Brands All-In on All-Inclusive: What it Means for Travel Industry and Advisors

All-inclusive resorts, once a niche market, have become a significant travel segment as major hotel operators continue to make big investments in the space.

The latest move was made by Marriott when All-Inclusive by Marriott Bonvoy announced the signing of three all-inclusive luxury resorts in Mexico with international developer AB Living Group. This follows Marriott’s other entries into the market, as well as those by Hilton, Hyatt and IHG with its Iberostar partnership.

Why is this happening now and what does it mean for travel advisors? TravelPulse asked hotel companies as well as advisors what this trend means for the industry. One outside analyst, Bjorn Hanson, adjunct professor at the Jonathan M. Tisch Center of Hospitality at New York University and a longtime analyst of the hospitality industry, said that for many of the large lodging companies, strategic planning has included a "white space" analysis, and for most, all-inclusive is one of those “white space” opportunities in the marketplace.

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Pre-COVID, according to Hanson, approximately 30 percent of resort travelers preferred or liked all-inclusive offerings—a number, he said, that might be low because many respondents had not experienced all-inclusives so may not have been confident enough to answer about preference or liking the concept.

The big players agree that the answer lies in opportunity—a chance to expand quickly and significantly into markets they might not now be in and to reach out to demographics that are not traditional to them. As a result, a product that was once considered limited geographically and demographically now seems to have few limits.

Alex Fiz, area vice president, Caribbean and managing director all-inclusive, Caribbean and Latin America region for Marriott International, said this is a segment that had been growing consistently and gaining popularity with a broader audience even before 2020. “We saw the opportunity to expand the traveling options for our guests," he said, "and we leveraged our entry into the all-inclusive segment with brands that are well recognized by travelers and with a fine balance between premium brands and luxury brands to bring the full portfolio of All-Inclusive by Marriott Bonvoy.”

Collette Baruth, vice president and commercial director of all-inclusive hotels and resorts in the Americas for Hilton, said all-inclusive has become a rising trend following the pandemic as travelers continue to look for convenience and connection. Booking an all-inclusive, she said, simplifies both trip planning and budgeting, allowing for more time to enjoy the stay and have a memorable vacation, no matter the occasion.

In the last few years, said Baruth “we have seen major brands identifying this increased demand for all-inclusive and are moving quickly into the space, providing a more competitive market, which means higher standards, and a quality experience for travelers.”

Customer perception of all-inclusive resorts, said Baruth, has improved as well-known brands have continued to evolve and elevate the on-property experience to meet the quality expectations of upscale and luxury travelers.

Betty Wilson, vice president, global accounts for IHG, said the expansion into all-inclusive “is an example of listening to and meeting guests and owners where they are and want to be.” In recent years, she said, the company has seen an uptick in demand for resort and all-inclusive stays, buoyed by guests’ desires for broader choice and high-quality, stress-free experiences. In turn, these categories have emerged as attractive avenues for the company to strengthen its overall portfolio and market position.

For example, she said, the alliance with Iberostar will extend IHG’s presence in parts of southern Europe, northern Africa, Latin America and the Caribbean where it previously had fewer than 20 resort properties.

One long-standing all-inclusive operator is not surprised at the entry of the big players. Gary Sadler, executive vice president of sales and industry relations for Unique Vacations, an affiliate of the exclusive worldwide representative of Sandals and Beaches Resorts, said the hotel companies have learned what Sandals Resorts has always known: that vacationers appreciate the convenience and ease of having the best of everything right at their fingertips.

Sadler also noted that there is room for competition because, while the all-inclusive concept may be the industry’s fastest growing segment, the term all-inclusive is not one-size-fits-all. There are a wide variety of models and offerings, and as other players enter the market, he said, “it’s fair to say that they are not pioneering new ground, but rather entering a storied space and building on a long legacy of innovation and demand generation developed by Sandals.”

At Hyatt, Amy Weinberg, senior vice president, loyalty, brand marketing and consumer insights, said that with the resilience of leisure travel over the past two years and the rapid growth of all-inclusive, “it was an ideal time for Hyatt to make a transformative move in the luxury all-inclusive space” in the form of Hyatt’s acquisition of Apple Leisure Group, which was completed in November 2021. The debut of the new Inclusive Collection in May 2022 has significantly expanded the variety of all-inclusive resort destinations and experiences that our loyal World of Hyatt members can access, she said.

What Happens to the Product?

Has the entry of these big players into all-inclusives actually affected the customer experience? Fiz said Marriott believes in the standardization of service and the guidelines that are the core of the product and add to the uniqueness of each brand. This way, he said, guests know what to expect whenever they stay at a Delta Hotel, a Westin or a Luxury Collection to name a few (all Marriott brands).

Marriott, said Fiz, is ready to deal with the shifting preferences of the all-inclusive traveler, from adults-only with hotels like the Royalton CHIC, Hideaway at Royalton and the W brand—which in the future will be the adults-only exclusive brand—to family-oriented when staying at a Royalton Splash. The same goes for themed hotels such as the Planet Hollywood in Cancun or Costa Rica, to wellness-oriented ones like Delta Hotels in Riviera Nayarit, Westin in Costa Rica or Brazil, to high-end luxury with the Sanctuary Cap Cana, a Luxury Collection All-Inclusive Resort.

Since Hilton first entered the all-inclusive space in 2008, said Baruth, it has changed the model and continued to expand, particularly throughout Mexico and the Caribbean. In 2021, she said, the company grew its all-inclusive room count in the Caribbean and Latin America by nearly 75 percent, including opening Hilton Cancun, an All-Inclusive Resort.

At IHG, Wilson said the company’s entry into the arena brings more choice and a higher-quality product. The breadth of resort options has increased in recent years, she said, “and we’ve seen more upper upscale and luxury destinations prioritize well-being and diverse experiences tailored to changing guest expectations.”

Bringing all-inclusives into the fold, say hoteliers, grows awareness among the trade and consumers of other brands in their portfolios—and stimulates interest in loyalty programs that are central to their marketing. Added reach in the resort and all-inclusive space, said Wilson, “increases awareness of our now 18 global brands with a new set of travelers and answers a clear call from guests and loyalty members for more stay options in more locations—all while driving new revenue to these properties."

Through the alliance with Iberostar, said Wilson, the selected portfolio of Iberostar properties will gain full access to IHG’s enterprise platform, including its distribution channels and the IHG One Rewards loyalty program with more than 100 million members. Beyond providing an important halo effect for the company’s entire portfolio, she said, the alliance will streamline back-of-house and day-to-day operations across the properties and create new ways to engage with current and potential customers.

Sadler said Sandals will continue to lead by innovating. He said the company only competes with itself, with amenities like professional butler service, over-the-water suites and most recently the Island Inclusive dining offering. Through this program, which debuted at the new Sandals Royal Curacao, guests can experience local restaurants on the island, and it’s still included. Couple that with guests exploring the destination in their own Mini Cooper convertible, said Sadler, “and that’s how we continue to chart new all-inclusive territory.”

Competition will have a positive effect on Caribbean communities, said Sadler. He said that while asset light (with the big brands not actually owning resorts) may be a worthwhile business strategy, “we think owning our hotels and being an integral part of the communities where we operate makes a real difference. It gives Sandals the ability, he said, “to move on a dime to innovate our offerings for our guests, team members, partners and neighbors.”

While some advisors have concerns about bypass issues through loyalty programs and vacation clubs, the big brands claim to be all in on the trade. Advisors, said Fiz, “are the movers and shakers of the segment since the very beginning and have become the most proficient experts and promoters of this product.” He said Marriott has put in place a program for advisors specially designed to help them to create memorable experiences for their consumers, and at the same time create profitable business together. “We want to make sure,” said Fiz, “that the travel advisor and the customer have the intention to recommend our brands and our all-inclusive resorts."

Travel advisors are essential to IHG’s business, said Wilson, "and we value the long-standing commitment to mutual support at the heart of these relationships.” In working with travel advisors, she said, “we can introduce our 18 brands to and create customized experiences for guests who rely on professional insights to book their trips and discover new places.”

As for any other channels, said Wilson, “IHG will continue to support our guests’ preferences and expectations and ensure that travel advisors remain an ongoing important extension of our own reach.”

Clients have many options today to acquire their vacations, said Fiz, “and we will always be open for them to choose the distribution channel they prefer the most.” For Marriott, he said, “our travel advisors are an extremely important channel, and we offer special conditions to enhance their success and with incentives and perks to differentiate each channel.”

Specialization and tailoring of the service are key for travel advisors to continue being a major distribution channel as they are today, said Fiz. It is the travel advisor, he said, “who should be continuously preparing and finding the niches and travel gems that their clients look for as it is the travel advisor who knows their clients best.”

Sandals was built in partnership with travel advisors, said Sadler, “and that commitment of love and trust will never waver.“ He said consumers want to do business with professionals with whom they have a relationship, who offer excellent customer service and who are experts in their field.

It's why Sandals is a steadfast supporter of ASTA, said Sadler “and why the company’s consumer call to action is always 'call your favorite travel advisor,' and the reason we invest as heavily as we do in agent education and provide the professional services of business development managers in local markets.”

As for loyalty program issues, Sadler said, members of Sandals Select Rewards loyalty rewards program can earn points and benefits on their loyalty tier status every time they book, regardless of whether the booking comes through the tour operator channel or the travel advisor directly; and travel advisors booking Sandals Select guests earn full commission on the value of the booking.

Advisors are never cut out of earning commissions with Sandals, said Sadler, who added that advisors booking Sandals Select Rewards members earn full commission and they also earn commission on repeat bookings made on site.

The Advisor Point of View

Advisors see positives in the familiarity of the big brands. Deborah Director, an advisor with SmartFlyer, said some clients feel more comfortable when booking within brands that they know, and some travelers are quite loyal to their program benefits.

Travelers are definitely more familiar with the big brands such as Marriott, Hyatt, Hilton, etc., than they are with brands in the all-inclusive market, says Michelle Shrader, an advisor with InteleTravel. As a travel advisor, she said, “my clients trust my recommendations, but I think they will have additional comfort when they see that an all-inclusive is backed by a popular brand they are familiar with.”

The big brands have very powerful loyalty programs which might drive business to their all-inclusive products. But that is not always a paramount consideration for advisors. More important than a loyalty program, said Shrader, “is the loyalty and trust that you have with your clients.” Just about every brand has loyalty programs of some sort, she said, and whether it's an airline, hotel or car rental, programs are available, but it may not be the best value for the client. “If you focus on the loyalty program but it isn't a fit for the client’s needs, then it’s not the best option.”

When it comes to the hospitality industry, said Shrader, advisors are as much of a customer as the clients who are paying to stay. As advisors, she said, “we look to those brands to be true partners who treat us fairly and take care of our travelers. Travel agents will continue to offer those brands that make it easy for us to do business with.”