Here’s why hotel chains are betting on a new era of all-inclusive resorts

Guess what? Times are changing, and all-inclusive resorts are cool again.

Or, at least, some of the world's major hotel brands including Marriott, Hyatt and Wyndham are trying to make them that way.

Over the last couple of years, some hotel brands that have never even dabbled in the model suddenly doubled down on their efforts to grow their all-inclusive portfolios, and in some cases, launch brand new ones.

Wyndham this week introduced the "upper midscale" Wyndham Alltra, its first brand dedicated entirely to all-inclusive resorts. In partnership with Playa Hotels and Resorts, one of the key players in the all-inclusive industry, Wyndham will convert two existing resorts in Cancun and Playa Del Carmen into the first Alltra properties.

In Cancun, the Wyndham Alltra Cancun, All-Inclusive Resort will offer standard rooms and suites, including beachfront walkout suites; 10 restaurants, bars and lounges; multiple swimming pools; fitness classes, a hangout space for teens, a complimentary hydrotherapy area and tequila tastings.

At the adult-only Wyndham Alltra Playa del Carmen, 10 restaurants and bars offer unlimited food and craft cocktail options, plus hot tubs, a spa, health and wellness facilities and more.

And that's just the first two announced by Wyndham, which said in a statement that more resorts will follow.

Marriott this week said it plans to have 33 all-inclusive resorts by 2025 when it announced the addition of 20 new all-inclusive properties as part of its All-Inclusive by Marriott Bonvoy program. And these properties aren't just your run-of-the-mill resorts typically associated with the all-inclusive lifestyle; they're part of the upscale Autograph Hotels Collection, and part of Marriott's broader plan to, it seems, reinvent the idea of the all-inclusive entirely.

Other brands, too, are picking up steam and giving travelers more opportunities to pay basically one price for their vacation; Hilton just announced two new all-inclusive resorts in Mexico and Hyatt now has Secrets Resorts and Spas, thanks to its acquisition of Apple Leisure Group, plus its popular Hyatt Zilara and Ziva properties.

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So, why are these brands looking past the tropes about all-inclusive resorts — bad food, lackluster rooms, cheesy themes and subpar service, all for one flat rate — and trying to establish themselves as new leaders in the front at more or less the same time?

Turns out the people want it

Well, to start, data shows that people have become much more interested in the idea of an all-inclusive vacation over the last few years.

According to a report published by Marriott, consumers' tastes have changed. As research firm STR found, "In the first half of 2019, there were 1,500 all-inclusive resorts that generated $7.9 billion in sales, a 20% increase from five years earlier."

Travelers, Marriott says, are looking for ease and simplicity when planning their vacations. Likely pegged to the nickel-and-dime effect at many hotels and resorts around the world (we're looking at you, parking and resort fees), the idea of knowing exactly what you're getting upfront is likely a major driving factor for consumers.

"In the past five to seven years, simplicity has been combined with elevation," says Brian King, president of Marriott International's Caribbean and Latin American region. "Customers are still looking for simplicity in the booking and pricing process — they don't want to worry about signing a bill every day."

In July 2021, an online survey of 1,515 Americans conducted by Maru/Blue and shared by Marriott found that 54% of people claimed "they are likely to consider an all-inclusive resort for their next vacation."

Adding to the trend, 70% of people surveyed between the ages of 18 and 34 said they would consider an all-inclusive resort. For legacy brands like Marriott and Hyatt, reaching younger consumers where they're at (or, in this case, where they want to go), could build a stronger loyalty base and allow those consumers to grow with the portfolios to higher-end brands as their own affluence grows.

Loyalty matters more than ever

And loyalty as a whole is at play here.

Traditionally, all-inclusive resorts have been independently owned and operated or part of smaller groups centered around Mexico, Central America and the Caribbean. But Marriott, the world's largest hotel operator, knows that people want to stay with the brands they already love — and where they can earn and redeem points.

In fact, according to the survey, a whopping 84% of people said they'd rather travel with a brand they're familiar with. With that, these brands with fierce and loyal members can provide a level of service potentially unmatched by one-off resorts and smaller chains.

"We can anticipate their needs in a very sophisticated manner. Not only can we greet them by name and remind them of their last stay with us, but we can set up something special that we know they'll enjoy based on past behavior," said King. "These small recognitions have big impacts. And we know we're never wasting the customer's time with something that's not appealing to them."

The pandemic changed everything

And like nearly everything else in the world, the COVID-19 pandemic has also changed the way people think about travel. As the majority of people have spent a significant chunk of time at home over the last year and a half, getting back out again — especially traveling to another country — can be a potentially daunting challenge.

The simple idea of an all-inclusive resort lends itself to the state of the current world we're living in: they're spacious and more or less made for social distancing; essentially everything you need, from food to activities to shopping, are right on-site; and the resorts have the ability to limit access to the properties, mandate testing or vaccinations and provide a sort of "bubble" for vacationers.

"Three-quarters of respondents to the consumer survey agreed that all-inclusive is a safer way to ease back into traveling post-lockdown," Marriott found. For King, that all adds up: "At all-inclusive resorts, families that have been cooped up for so long in their homes can still be together — without being that close together," he says. "They have plenty of space and can practice social distancing. And because we can manage crowds, it just doesn't feel as confined."

It's also a way, TPG previously reported, for cruise-obsessed travelers to, in some ways, recreate the experience of a ship without the fear of being trapped — a very real concern for many travelers still.

Bottom line

There are plenty more reasons why the big dogs in the hotel industry are expanding their all-inclusive portfolios, but at the root of it, people simply want it and the time is right. And with their powerful resources — capital, consumer data and huge pools of loyal customers — why not give it to them in a way they never thought possible?

The future of the all-inclusive resort is knocking on the door, and soon we'll have even more to choose from. Marriott, for example, teased in 2019 plans to leverage more of its brands to offer a more upscale all-inclusive experience, including W All-Inclusive and The Ritz-Carlton All-Inclusive. Though no new details on those portfolios have been announced, it's a step in the right direction.

But will these resorts meet the growing demands of families, foodies and luxury travelers? Only time will tell.