All-Inclusives Move to Next Level, Creating Opportunities for Agents

This is the first of two stories on all-inclusives

All-inclusive resorts are a key product for many leisure travel agents because of their potential for sizeable commissions and high-ticket sales such as destination weddings. Now the sales potential is growing as the all-inclusive segment broadens its appeal by diversifying and expanding its product, especially on the luxury end.

While the trend has been going on for years, it picked up speed in late 2013 when Hyatt entered the luxury end of the all-inclusive segment with its Ziva and Zilara brands. The move by a major lodging brand recognized the growth prospects of all-inclusives, a signal that was noticed by many.

Hyatt made its move in partnership with Playa Hotels & Resorts, in which Hyatt owns a 20% stake. “We wanted to create the next generation of five-star all-inclusives,” said Kevin Froemming, chief marketing officer for Playa Hotels & Resorts.

“Part of what Hyatt delivers to us is the ability to innovate,” Froemming said. “Hyatt recognized they couldn’t run all-inclusives like they run their EPs [European Plan resorts], so we worked with them to create totally new products.”

Delivering what customers want
To accomplish that, Hyatt and Playa Resorts listened closely to what customers said was important to them.

“We found that relaxation is a big word, along with dining, entertainment and unique experiences,” Froemming said.

“Based on that we set out to create resorts that incorporate new features. For instance the Ziva in Jamaica has the first-ever churrascaria [Brazilian barbecue] at an all-inclusive. We have a lot of quality competitors in this space, and we wanted to come up with unique dining options.

“Another example: We found the best jerk chef on Jamaica and had him create a jerk shack on the beach called Barefoot Jerkz. It’s what people want – a grab-and-go option of high quality.

“At Zilara, which is couples only, we set up fire pits in a strategic way, so if you want to be alone with a partner there is a spot. There is a better spot if you’re a group.

“We constantly challenge our general managers to come up with new things. One GM at Ziva Los Cabos started doing marshmallow roast bonfires. In another case the staff suggested putting telescopes on a deck for whale watching.”

Other companies spice things up too
Other all-inclusives are looking to make waves by spicing up their products and keep pace with changing consumer tastes too.

Among them is the luxury brand Palace Resorts.

“We push the boundaries of convention by providing healthy alternatives for health-conscious guests,” said Kathy Halpern, vice president of sales and marketing for Palace Resorts. She noted that Palace as been in the market for 30 years and knows what consumers want.

“A new wellness concept was launched at Moon Palace Golf & Spa Resort in Cancun last year with 19 Palace Wellness Suites that are ideal for aqua spinning (underwater spinning), with a private instructor in a private pool, a heart-healthy menu and more.”

Moon Palace also has been repositioned as an entertainment destination: For guests who book five or more nights, two tickets to a high-level concert are part of the resort’s all-inclusive offering.

Competing on value, innovation
On St. Lucia, the independent Coconut Bay Beach Resort & Spa is trying to be different in its own way, said CEO Mark Adams. “We don’t compete with companies like Sandals but offer really good value.

“We stress food and invest a lot in our kitchens and chefs, but we keep it simple and functional,” Adams said. “Of course there are flat screen TVs and tile in the bathroom, but we aim for new, modern and clean, because mostly our guests are out enjoying the destination.”

Innovation has been key to the success of Coconut Bay Beach Resort & Spa, Adams said.

Side-by-side resorts
“For one thing we have two different sides at the resort. One is called Splash and is family-friendly with a water park, kids club and a beach-entry pool. The other side is called Harmony and is for adults 18 and over; it has two pools.

“We market the whole resort as two worlds. All the restaurants are open to everyone but there are earlier seatings for kids. Also, it’s perfect for destination weddings because kids can come and stay on one side of the resort.”

Coconut Bay Beach Resort is doing well enough that it is adding 36 patio suites to its adults-only side.

“Demand for all-inclusives has grown tremendously,” said Adams. “Eighty percent of keyword searches for resorts have the words ‘all-inclusive.’ It has become a matter of competing within the all-inclusive set.”

Continued growth & change
Travel agents can expect the all-inclusive segment to continue to evolve and expand. “What’s great today might not be the next best thing, so we have to keep interacting with guests and creating a certain environment for employees,” said Froemming of Playa Resorts.

Hyatt and Playa Resorts see possibilities beyond the Caribbean and Mexico, he said, including in Asia in destinations such as Phuket and Bali.

Meanwhile, other brands in the segment will be watching, among them Palace Resorts. “It is no surprise that name brands such as Hyatt are trying to broaden their market,” Halpern said. “We look forward to the all-inclusive market garnering further attention.”

Next time: Agents and all-inclusives––mutual dependence proves rewarding