Why the Business of All-Inclusive Resorts Will Never Be the Same
Skift Take
Luxury all-inclusive resorts may be optimistic about the future post-pandemic, but profits will come alongside heightened green challenges. Then there's an increasingly demanding, socially conscious consumer. Can the resorts return to their former stature as the fast-growing sector of accommodations?
Two months ago, Dominican-American couple Raquel and Junior Liriano drove eight hours from Puerto Plata to Bávaro, Punta Cana, for a weeklong, all-inclusive resort staycation in the Dominican Republic.
“It’s a special place for us, we first met up here,” said Liriano, referring to one of the longest-running resorts in the area.
On arrival, the couple learned the adults-only section was closed, and their reservation had shifted to the family side. “We are reduced to one hotel with almost no restaurants,” Liriano said, noting the low staff morale.
What they encountered next was an even bigger shock. “[T]he tourists do not even wear masks, it’s like they are from a different world.”
Before Covid hit, all-inclusive resorts were the fastest-growing market in the accommodation sector, with increasing demand and offering high return on investment. When Marriott International finally entered the segment in 2019, purchasing a chain of seven luxury resorts in Barbados after years of steering clear from the model, it was the nod that confirmed this segment's reinvented image and bright future. On Tuesday, the company announced further expansion by signing an agreement with PGA Hotel Management Group to introduce the first Westin all-inclusive resort to South America.
When Covid hit in 2020, all-inclusive resorts, much like cruise lines, suffered a major blow that forced them to reinvent the way they run and market their properties to a changed consumer. Images of crowds sipping piña coladas by the swim-up bar, and beaches lined with bodies on loungers suddenly evoked fear rather than a blissful escape from reality.
Unlike megaships stuck at sea, however, resorts sit on spacious land, allowing them to restart their operations as early as summer 2020, albeit at limited capacity, as destinations in the Caribbean, Mexico, and parts of Europe welcomed visitors back. Demand has slowly trickled back since, ebbing and flowing according to Covid’s progress in source markets.
“This segment is well-positioned to take advantage of the tourism recovery because of the guest profile it attracts, and the ability to impart confidence in the traveler that they're going to be experiencing a safe vacation,” said Rogerio Basso, head of tourism at IDB Invest, the private sector arm of the Inter-American Development Bank, noting that all-inclusive resorts are masters of crowd control and predictability.
The allure of premium services within a
