Don’t let the hype about all-inclusive resorts being another offering for loyalty members fool you: This trend provides major hotel companies like Wyndham a much-needed growth story for shareholders during the travel recovery.
Another mainstream hotel company is beefing up its presence in the increasingly competitive all-inclusive resort sector.
Wyndham debuted Tuesday its 22nd brand, Wyndham Alltra, an all-inclusive resort offering in partnership with Playa Hotels & Resorts. While Wyndham already has several all-inclusive resorts under its namesake brand, this is the company’s first brand dedicated entirely to all-inclusive properties.
For More on the Business of All-Inclusives From This Skift Deep Dive: Read Why the Business of All-Inclusive Resorts Will Never Be the Same
The partnership with Playa Hotels & Resorts, which operates 22 all-inclusive resorts across Latin America and the Caribbean, gives Wyndham stronger footing as it looks to expand across the sector company leaders expect to play a bigger role in the future of travel.
“We started talking about 18 months ago, knowing how strong leisure is going to be and how it’s going to come back,” Wyndham CEO Geoffrey Ballotti said in an interview with Skift ahead of the launch. “Providing our nearly 90 million Wyndham Rewards members with an all-inclusive option in markets like Mexico and the Caribbean and Latin America is just additive to everything else.”
The company’s all-inclusive resort offering to date has largely centered around the eight-property Viva Wyndham portfolio. But the Alltra launch signals the company sees demand for this kind of travel warranting its own brand.
The new two-resort Alltra portfolio launched in Mexico with a property in Cancun as well as an adults-only resort in Playa del Carmen. Wyndham plans to expand the brand with both family-friendly resorts as well as those targeting adults. The hotel company, like the competition at Marriot and Hilton, sees plenty of upside in entering the sector on brand awareness alone.
Marriott announced plans earlier this year to add 19 all-inclusive resorts to its Autograph Collection. The number was upped to 20 Tuesday with the addition of a fifth property in Jamaica, according to a Marriott release. Hilton made its own all-inclusive push earlier this summer, but Wyndham is the only of the three to plan a standalone brand for its all-inclusive resorts.
No matter the approach, traditional hotels see the sector as fertile ground for brand growth at a time when corporate travel demand has a giant question mark dangling over it. These companies also think they can offer things regional all-inclusive resort operators can’t.
A traditional hotel company has more brand awareness and distribution globally than even some of the largest all-inclusive resort operators like Sandals or even Wyndham’s partner Playa.
“If you’re going to the Caribbean and you’ve got two equally attractive all-inclusive experiences and one’s branded and one’s not, you’re probably going to choose the branded one,” Ballotti said.
A Growth Spurt
Wyndham’s plan for Alltra begins with the Playa partnership in the Caribbean and Latin America, but Ballotti indicated interest in expanding the brand elsewhere in the world with other partners. While growth is on the horizon, he isn’t providing specifics.
“I have worked for too many folks in the past that have thrown out big numbers and missed,” Ballotti said. “We will be very selective. It’ll be similar to what we talked about with the Registry Collection.”
The Registry Collection is the high-end soft brand — that is, one without a singular name or brand standards around design or amenities — Wyndham launched earlier this year. Company leaders told Skift this summer the plan for Registry was to grow to as many as 25 properties in the next five years.
Wyndham is one of the most active hotel companies with conversions, deals involving owners of existing hotels switching their brand affiliation. Eighty percent of Wyndham’s U.S. openings in the the second quarter were conversions while half the company’s international openings were conversions, Ballotti said.
The company plans a similar emphasis on these kind of deals in building up the Alltra portfolio. Both the Cancun and Playa del Carmen properties were previously under the Panama Jacks brand affiliation.
“I think it will be primarily conversion focused,” Ballotti said of Alltra’s growth while alluding to the tight lending environment for brand-new hotels. “Because again, the quality of existing, all-inclusive resorts that are out there today and the new construction environment in markets like the Caribbean just naturally point you that way.”
A Crowded Battlefield
Companies like Marriott, Hilton, Hyatt, and now Wyndham are late arrivals to the all-inclusive space. Brands like Club Med, Playa, and Sandals have been the dominant players in the sector until the arrival of traditional hotel companies in recent years.
The pandemic accelerated the interest. Leisure travel is a more certain demand driver than business travel, and these publicly traded hotel companies must show shareholders a growth story somewhere. Hilton even sees a future for its meetings and events business at its growing all-inclusive portfolio.
While big hotel companies may see a future in all-inclusive resorts, at least one CEO of one of the original players in the field isn’t losing sleep by the swelling competition.
“We are hyper-focused on the fact that we’re Caribbean people and the Caribbean is our sandbox,” Adam Stewart, executive chairman of Sandals Resorts, told Skift earlier this year.
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Photo credit: Wyndham's new Alltra brand includes the Wyndham Alltra Cancun (pictured). Wyndham Hotels & Resorts