Why Marriot’s All-Inclusives Could Draw Interest to the Niche

NIA
Nia is an all-inclusive resort destination Marriott plans to develop in Mexico's Riviera Nayarit.

The entry of big hotel brands like Marriott into the all-inclusive market means more competition, but it could draw more consumer interest to the sector, executives from major all-inclusive brands said during a recent panel at Apple Vacations’ Golden Apple gala and in interviews with Travel Agent.

The discussion was prompted by Marriott’s recent investment in all-inclusive resorts in the Caribbean and Mexico, which the company announced in August. Plans call for the company to develop all-inclusive properties across several of its brands, including The Ritz-Carlton, Luxury Collection, Marriott Hotels, Westin Hotels, W Hotels, Autograph Collection and Delta by Marriott. Additionally, Hilton has announced plans to open 10 all-inclusive properties via a partnership with Playa Hotels & Resorts, while Hyatt has eight all-inclusive hotels in Mexico and the Caribbean, the most recent of which opened in 2017.  

“Obviously it’s another competitor, but it’s a free market – they have all the right to come in,” Abel Matutes Prats, CEO, Palladium Hotel Group, said during the panel. “In some cases the big companies haven’t been successful [in the past] because it’s been such a small portion for them. They want to put their efforts in other spots that can grow a bit more.”

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“It’s not new,” agreed Alex Zozaya, executive chairman, Apple Leisure Group, noting that there has been an all-inclusive Westin in Costa Rica for many years. “Now they’re coming in with more strength.”

So, why will Marriott's entry into the all-inclusive arena draw more attention to the niche? Simply put, Marriott International is the largest hotel company in the world and, as a result, likely reaches more consumers than one could imagine, through both brand recognition and its online presence.

“It’s still an untapped marketplace,” said Kevin Froemming, executive vice president and chief marketing officer for Playa Hotels & Resorts, during a recent interview. Playa manages both Hyatt- and Hilton-branded all-inclusive properties. “Now with the advent of the Hyatts and the Hiltons, now people realize that not only is this a great value, it’s one of the best ways to see a destination. 

“I think that the global brands will endorse the all-inclusive as a concept,” said Zozaya.

Marriott could also draw interest to all-inclusives through what Matutes Prats described as its biggest advantage: its loyalty program. “It’s very natural for them that someone who’s been working the whole year wants to redeem points with them when they take their holiday,” he said. 

Travel agents will play a big role in how the hotel brands’ expansion plays out, many of the executives said. “In our region the configuration of our industry is very unique – tour operators and travel agents are key,” said AMResorts President Gonzalo del Peon. “It’s hard to believe that the company will start selling direct and bypass us and still get the support they need.”

“I think the advice from expert travel agents is still very important and I think it will be in the future,” del Peon continued. “If Marriott is not using those channels, I think it’s going to change soon.”

“I think they underestimate the power of distribution, the power of the travel agent, and the power of packaging,” Zozaya said. “In our space distribution overcomes the brand – the fact that you’re very famous doesn’t matter.”

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