Big Hotel Brand Interest in All-Inclusive Resorts May Be Overheated
Skift Take
Early Check-In
Editor’s Note: Skift Senior Hospitality Editor Sean O’Neill brings readers exclusive reporting and insights into hotel deals and development, and how those trends are making an impact across the travel industry.For several years now, the big hotel brands have been adding all-inclusive resorts, stealing market share from independent and regional brands. Several factors will sustain this trend, said a new, well-written report from JLL Hotels & Hospitality Group, a brokerage and research firm.
For example: In the past decade, the big brands gained ten percentage points of share in Mexico and the Dominican Republic alone, JLL said. A decade ago, 70 percent of resort properties were owned by independent and regional brands, such as Sandals, Iberostar, and Riu. Now only 60 percent are.Big brands are chasing big money. All-inclusive resorts produced about $7.9 billion in revenue in the first half of the pre-pandemic year of 2019 — a 20 percent sales jump over five years, said STR, which has monitored data on about 1,500 resorts.Adding all-inclusive inventory is an understandable play for some big hotel brands.
But hoteliers' broader exuberance about the all-inclusive segment's potential for fat profits might be overheated — perhaps as overheated as some of the guests by the infinity pool.
The trend isn't new. Big brands have been adding all-inclusives for years. But deal interest has been heating up. Recent deals include:
Hyatt closed a $2.7 billion acquisition of Apple Leisure Group in November.In 2019, Marriott announced an $800 million multi-pronged push into all-inclusive. Part of that involves the world's largest hotelier creating an “All Inclusive by Marriott” umbrella, with all-inclusive hotels beginning to open in 2024 under brands such as Ritz-Carlton and W. About 49 percent of its recent hotel signings and conversions in Latin America have been all-inclusives.Accor said this year it will quadruple Rixos Hotels to 100 by 2027Two factors are driving big hotel brand interest. One is the growing demand for all-inclusives, especially premium ones. The other is the potential for scale efficiencies.
Some all-inclusives have made strides in repositioning the
