Once viewed as a cheap, low-end option for travel, all-inclusive resorts have shaken off that perception and are increasingly a high-rated, luxury offering embraced by the biggest global hotel brand companies.
Javier Coll, global head of growth for Hyatt Hotels Corp.'s Inclusive Collection, said that evolution will continue in the segment, opening up the possibility of higher rates and, in turn, expansion of the model into new markets once viewed as too expensive for all-inclusive resorts.
Coll, who came to Hyatt when it purchased Apple Leisure Group and now serves as the global head of growth for the Inclusive Collection, said the supply-demand dynamics in the segment are extremely positive. He said Hyatt has identified roughly 50 markets for possible expansion.
"We're talking about Asia; we're talking about India, and then of course, the Americas," he said, adding Hyatt is already the biggest player in the space. "This is, for us, just the tip of the iceberg."
Today, Hyatt's Inclusive Collection has 10 brands — Impression by Secrets, Hyatt Ziva, Hyatt Zilara, Zoëtry Wellness & Spa Resorts, Secrets Resorts & Spas, Breathless Resorts & Spas, Dreams Resorts & Spas, Hyatt Vivid Hotels & Resorts, Alua Hotels & Resorts, and Sunscape Resorts & Spas — and Hyatt's total portfolio of all-inclusive resorts included 120 properties as of the third quarter of 2023.
Coll said there are also a wealth of opportunities for growth across Europe, the Middle East and northern Africa.
He said when looking at whether a potential market can support all-inclusive resorts, it comes down to a calculation of how high you can drive rate versus operating costs.
The fact that all-inclusives have established themselves as a luxury offering — something his team at Apple Leisure had worked on for decades before their acquisition — paves the way for that sort of growth. In the early days of Apple Leisure, the leadership team was keyed in on providing a higher-end, "Americanized" offering in the all-inclusive space, but it took some time to win over skeptical travelers.
"Certainly, it was tough at the beginning, trying to convince someone to come to an all-inclusive when all their previous experiences they had with all-inclusives were not up to par," he said. "It was the chicken or the egg. You're not really doing fantastic because people are not convinced, yet, and at the same time, you want to spend more per person in the hotel because that means better food and beverage and everything. But you're not getting the occupancy."
Now that travelers' expectations have shifted, Coll said the model, which was historically restricted to low-cost markets in Latin America, the Caribbean and Europe, can work almost anywhere. He said his aspirational goal is all-inclusive resorts in Hawaii.
"So, of course, if you go to Hawaii, expenses are going to be double or triple what we have in other places, but you also see the rates in Hawaii," he said. "If the product is good enough, you can also charge two times or three times what you're charging in the Dominican Republic or Mexico. At the end of the day, it's proportionality to the [profit and loss statement]. So the short answer is yes, I think it will work. It's just a question of finding the right product."
Once again, establishing the all-inclusive model in new markets can similarly be a situation of the chicken or the egg, but those barriers can be broken with clever distribution and packages.
"It's always difficult to penetrate new destinations, but once the first one happens, it just grows," he said.
All-Inclusive Trends
In terms of high-level trends in the all-inclusive segment, Coll said there are three things travelers are most focused on: a focus on luxury, convenience and access to amenities, and cultural authenticity within markets.
He said the segment has been able to grow upward into the ultra-luxury space, which Hyatt has been looking to serve with the Impression by Secrets brand.
"We saw a need for that level of customer," he said.
For convenience, Coll said it comes down to how hotels are designed and the amenities offered to keep guests from having to worry about anything other than relaxing.
In terms of authenticity, Coll said travelers are less and less interested in being kept within a bubble at an all-inclusive resort, and are more focused on feeling like they have a unique experience at a destination.
"What really makes these customers want to go back to a place is the overall experience, not just the hotel," he said. "If they're able to get out of the hotel to go visit ruins or do scuba diving and snorkeling, whatever it is, that's what really makes the experience. So we facilitate the access for our customers to live the culture of the destination."