Why hotels are focused on all-inclusive resorts
Tourists want to stay in one place to avoid the spread of COVID-19
As the highly contagious Delta variant continues to spread, many people are still wary of travel. But their comfort levels appear to increase when they choose to stay in one location they don’t need to leave — because it has everything they could dream of.
An increase in local demand contributed to there being 14.9 million overnight hotel stays in Spain in July 2021, compared to 14.8 million in the same month of 2019.
“A lack of cruises and pent-up holiday demand from 2020 have increased the average length of stay on an already compressed supply, further contributed to a higher performance in Mediterranean resorts,” says Jessica Jahns, Head of EMEA Hotels & Hospitality Research, JLL.
This is why hotel companies are increasing their bets on all-inclusive resorts, where travelers are often willing to pay a premium for convenience, enhanced health and safety measures, and an overall complete vacation experience. These resorts are recovering at a much faster pace than expected, says Geraldine Guichardo, Global Head of Research for JLL's Hotels & Hospitality Group, and hoteliers are both adding new inclusive hotels to their portfolios and forming partnerships with — or acquiring — all-inclusive companies.
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“Tourists are eager to take trips and splurge on vacations after amassing significant levels of personal savings following months of being lockdown. This trend has supported robust leisure demand far above business travelers,” Guichardo says. “Many like the safety of staying in one place to reduce the transmission risk of COVID-19.”
Many of the big players in the hotel world are either creating more all-inclusive resorts on their own or leaning on the expertise of all-inclusive companies. Marriott International Inc. recently announced that it has added 20 new all-inclusive resorts to its portfolio under its Autograph Collection Hotels brand.
Meanwhile, Wyndham Hotels & Resorts Inc. announced it is partnering with Playa Hotels & Resorts, a company that owns, operates and develops inclusive resorts. The resorts that result from the partnership, the first of which are in Mexico’s Yucatan Peninsula, will sit under Wyndham’s new Alltra brand, its first dedicated to all-inclusive resorts. Playa hotels will manage the properties.
Hyatt Hotels Corp. has gone the route of acquisition, buying the inclusive resort management company Apple Leisure Group. The acquisition will add roughly 33,000 rooms across 100 hotels to Hyatt’s portfolio, and it will make the company’s share in leisure hotel rooms much larger — up roughly 5% to constitute more than half the portfolio.
“Resorts in Mexico and the Caribbean really suffered early in the pandemic, but now vaccinated travelers are coming back,” Guichardo says. “And leisure travel could see growth beyond the lifespan of the Delta variant, as remote work becomes more of a norm and people are more comfortable working from anywhere.”
Contact Geraldine GuichardoGlobal Head of Research, Hotels & Hospitality Group, JLL
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