Marriott expands all-inclusive resort offerings as guest profile expands
HOLLYWOOD, Fla. — All-inclusive resorts are no longer a specific niche, said Laurent de Kousemaeker of Marriott International.
“This [all-inclusive resorts are] limited by a certain price or a certain experience is no longer true,” he said. “You can have a lifestyle experience. You can have a very high-end experience and you can have a luxury experience. You may have a low-end experience.
All-inclusive resorts are now a way to buy vacations across an array of brands and positioning, Marriott’s director of development for the Caribbean and Latin America said in an interview at the Hotel Opportunities Latin conference. America.
Marriott entered the all-inclusive resort space in 2019 with expansions of seven of its existing brands, de Kousemaeker said. All-inclusive resorts used to be “cheap, fun, sunny, rum vacations” but have now shifted to a “convenient, holistic vacation experience” that targets guests at all levels, did he declare.
Customers have traditionally been a bargain-oriented European clientele, but now that demand segment is being supplemented by the well-rated and more discerning US customer, he said.
The timing of Marriott’s entry into all-inclusive packages couldn’t have been better, de Kousemaeker said.
“The sequencing has been fair, and the effects of the pandemic shifting to recreation are fueling that growth in that direction,” he said.
Marriott has 32 open all-inclusive properties with 10,300 rooms in eight Caribbean and Latin American countries. The company recently announced an agreement to convert Sanctuary Cap Cana in Punta Cana, Dominican Republic into its Luxury Collection. He also signed the soon-to-open Royalton Splash Riviera Cancun, owned and operated by Blue Diamond Resorts, to his portfolio through the Autograph Collection.
The 1,049-room Royalton Splash Riviera Cancun resort includes a water park, lazy rivers, kids’ club, teens’ club, laser tag, bowling alley, and 21 food and drink outlets.
“It will be a destination in itself,” said de Kousemaeker. “That’s what’s amazing about these all-inclusive resorts. They basically become destinations where you’re not necessarily competing with the hotel next door. You could be competing with Atlantis or maybe even Disney.
It’s demand driven by supply when a resort becomes the destination itself, and that changes the dynamic in a positive way, he said.
Marriott focused on the Caribbean and Latin America region to begin with, but is now looking at global opportunities for all-inclusive resorts, de Kousemaeker said.
“Expect over the next few years to see this model expand internationally,” he said.
If there was limited demand, de Kousemaeker said he would be concerned about growing competition in the all-inclusive resort space. Marriott, Hilton, Hyatt Hotels Corp., Wyndham Hotels & Resorts, and Sonesta International Hotels Corp., among others, have entered and grown in the all-inclusive space.
The broadening of the customer profile and the appeal of all-inclusive resorts have also changed the competitive landscape.
“Now it’s the Marriott customer, it’s the Hilton customer, it’s the Conrad and it’s the Ritz-Carlton customers who now see the opportunity for a hassle-free vacation with their family or with their partner. “, did he declare.
De Kousemaeker said Marriott’s Bonvoy loyalty program gives it a competitive edge, as does its approach of using existing, recognizable brands to build equity with customers and set clear expectations. Marriott has also added several of its brands to the all-inclusive portfolio, most recently its JW Hotels brand.
“We understand our customer Ritz-Carlton,” he said. “We understand what they want, what they are looking for, their tastes or their needs and their interests. We understand that they go on vacation, so why not design the vacation for them in a way that they can recognize the brand they love and use that brand while on vacation? »
Beyond all-inclusive resorts, Marriott has 327 hotels with 65,500 rooms representing 21 brands in 37 Caribbean and Latin American countries, de Kousemaeker said. At the time of the interview, the company had 127 projects and 22,000 rooms in the works in the region.
Strong demand from leisure travelers is driving Marriott’s growth in the region, he said. Ease of travel to and from the United States along with high vaccination rates and relaxed restrictions fueled the pent-up demand the hospitality industry had hoped for.
Marriott’s average occupancy for the entire Caribbean and Latin America region is at 93% of pre-pandemic levels, he said. Revenue per available room for the first quarter of this year was 167% of what was achieved in the first quarter of 2021.
“We had the best quarter we’ve had since pre-pandemic,” he said. “Leisure travel continues to be the main driver.”
Its resorts in Mexico and the Caribbean led the rebound, surpassing 2019 levels, and air travel trends in the region are positive, he added.
Marriott began focusing on conversions as a growth path in the region before the pandemic, particularly through its soft brand collections, de Kousemaeker said. This is the Delta brand has also created a new avenue for conversions.
During the pandemic, conversions have become the primary focus for growth due to new construction disruptions, he said. Of the deals signed this year to date, about half have been conversions compared to about five years ago about 15% of the pipeline were conversion projects.
Marriott hasn’t moved away from new construction so much as it has expanded the conversion component, he said. As the market recovers, investors and owners will feel more confident in performance trends, which will lead to further investment in new projects.
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