As All-Inclusives Evolve, So Does the Market

Anyone who’s been in the travel business a while will recall a not-so-distant past when all-inclusive resorts were less than stellar. Not anymore.

“All-inclusive Caribbean resorts used to offer average food, drinks and mediocre accommodations. But this has all changed. Over the past few years they have been working hard at redesigning these hotels and resorts. They are offering all kinds of experiences and trying very hard to exceed their guests’ expectations,” said Becky Veith, CTA, of Becky Veith Travel in Erie, PA.

Recent investments in the sector by private equity firms, together with the anticipated expansion of traditional resort companies into all-inclusives, suggests there are more good things on the way.

All-inclusives have become a fiercely competitive sector. As Kevin Froemming, executive vice president and chief marketing officer for Playa Hotels & Resorts, observed, “competition breeds performance.”

More & better
Competition already has given rise to a more diverse and exciting all-inclusive product.

“They’ve become so much better in every aspect,” said Dave Cook, co-owner of Love to Travel in Overland Park, KS. “You’re seeing plunge pools, over-water bungalows, swim-up suites, private balconies with two-person Jacuzzis, good nightly entertainment, activities throughout the day, fitness centers.”

The range of resort types in the all-inclusive category has expanded too. “There are all-inclusive resorts that offer luxury experiences with fine dining, top-shelf liquor, amazing spas and upscale activities. They have adult-only resorts at all price points, from value to luxury. There are mega-resorts that offer something for everyone, big and small,” said Veith, whose knowledge of all-inclusives has been described by Conde Nast Traveler magazine as “encyclopedic.”.

“Some family resorts are offering water parks, flow riders, giant lagoon-style swimming pools, lazy rivers and children’s clubs. Small boutique resorts are available. There are even brands designed for young adults and ones designed for more mature adults,” she said.

Appealing to the high end
Not so long ago, all-inclusives were considered a low-cost option suitable only for travelers on a budget, but the sector has claimed a strong foothold in the luxury end of the spectrum.

Sandals Resorts, which in December introduced its first over-the-water suites in the Caribbean, has been moving toward “increasingly high standards of luxury” for a decade, said chairman and founder Gordon “Butch” Stewart.

Veith expects to see luxury hotel brands adding all-inclusive options, because “people are demanding it.” Turns out, even upscale travelers “love paying one price,” she said.

AMResorts, which encompasses six luxury all-inclusive brands, is rapidly expanding its portfolio, signing 10 deals for new resorts in 2016 and a stated goal of signing its 100^th resort by 2020.

One way AMResorts is catering to the ever-changing wants of its high-end clientele in the near-term is by improving technology access for its guests, said Alex Zozaya, CEO of Apple Leisure Group. At its adults-only Breathless Resorts and Spas, iPads are provided in all guestrooms, a feature that will be rolled out across AMResorts. Some AMResorts also offer an app that provides free calling to the U.S. and Canada, free resort-wide WiFi and other features.

Experiential and authentic
Another traveler demand that has touched the all-inclusive sector is the yearning for active vacations built around real experiences.

“More and more customers are seeking customized, authentic vacation experiences that are not only immersed in the culture of the destinations they are visiting, but that are reflective of their passion points,” said Stewart.

Sandals’ response has been to provide guests with a variety of options, “so there is something for everyone and they can personalize their own vacation”––whether that means learning something new, like diving, or going on “unique excursions,” Stewart said.

One recent initiative is Sandals’ new LIV+ programs, featuring exclusive events and activities focused in six areas––music, culture, sports, culinary, voluntourism and social interest events.

Playa Hotels & Resorts’ new partnership with lifestyle brand Panama Jack is its bid to sate consumer hunger for authenticity and experiences at the four-star level.

“People want to experience the destination and not just the resort, and we’re facilitating that through our tour desks,” said Froemming. “That’s one of the things that’s changing in all-inclusives. It’s a much more open environment.”

Playa’s Panama Jack resorts also will be designed to highlight the destination on-property, Froemming said. “We’re infusing the authentic culture into those resorts, and they’ll be managed by local people.”

A growing market
All those changes are helping resort companies extend their market reach. Where “even five years ago, it was still a niche audience,” now “it’s becoming a lot more mainstream,” Froemming said.

The market is even expanding to include mature, experienced travelers who in the past would have shunned all-inclusive vacations, said Cook. “We’re seeing older clientele want to try the all-inclusives, and once they try it they’re loving it; the younger ones as well, because they see it as good value. They like to know what they’re going to spend.”

In addition to the expected wedding and honeymoon bookings for all-inclusives, Veith said she’s seeing more family reunion groups, corporate incentives, adult-only trips, summer family vacations, and even fundraising trips for clubs and organizations.

At Sandals Resorts, Stewart said that “demand across all market segments for the concept shows no signs of slowing down, particularly among a new aspirational audience who seek experience as the ultimate luxury. Forward-thinking all-inclusive resorts will become conduits that reach beyond the traditional all-inclusive experience to offer highly customized guest experiences.”