2018 Trends in All-Inclusive Sector
November 13, 2017 1:13pm
By Diego Lowenstein
1. What sets today’s luxury all-inclusive properties apart from the all-inclusive properties of the past?
From food and beverage options to upgraded amenities, the luxury all-inclusive sector has greatly evolved in recent years. In the past, many all-inclusive resorts offered a three-star, mid-level experience that, while it was an affordable and attractive option, did not always wow travelers. But today’s all-inclusive properties, at least the ones that are doing it right like Hyatt Ziva and Zilara and the AM Resorts brands, are focusing less on delivering a cost-effective all-inclusive experience and more on delivering a true luxury experience that attracts travelers and builds brand-loyal customers.
One way these new properties are achieving this is through more personalization with both resort offerings and the guest experience. Traditionally, all-inclusive brands have focused on offering a standardized, branded food and beverage experience that allowed travelers to visit the same restaurants at a resort in Jamaica as they could at a resort on another Caribbean island. Today, brands are trying to localize their F&B offerings and offer something that’s focused on a distinct concept rather than a brand. This is something that traditional luxury hotels have done right, and now it is being embedded in all-inclusive properties.
The same thing is occurring with amenity offerings. Today’s luxury all-inclusive traveler is looking for a truly customized spa experience, one that provides exclusive treatments, like hydrotherapy. As a result, all-inclusive resorts are beginning to bring these kinds of treatments and experiential offerings in-house and developing their own internal spa “brands.” We’re also seeing more affiliations with all-inclusive spas and cosmetic companies for co-branding opportunities.
This more local, personalized experience is not your grandparent’s all-inclusive experience. It’s a luxury experience that will turn travelers looking for a one-time, “affordable” all-inclusive vacation into loyal travelers who will seek out your brand’s luxury all-inclusive options wherever they travel.
2. What motivates today’s travelers to choose a luxury all-inclusive property and how have these motivations changed over the years?
The main driver of all-inclusive interest is and always will be value with expanding and highly differentiated product offerings in the future. We especially see this with today’s luxury cruise travelers—a big demographic for all-inclusive guests. They believe in the value proposition of an all-inclusive cruise and understand that the right luxury all-inclusive property can provide similar—if not better—value with the increased opportunities a land based experience can only provide.
Hoteliers, brands and developers that want to be successful will need to balance this value proposition with one of the biggest expectations of today’s all-inclusive traveler: the expectation of true hospitality and service execution. Just like when they stay at a typical luxury hotel, luxury all-inclusive travelers want to be treated, for lack of a better term, luxuriously. Whether it’s personal butlers and in-room check-in or private plunge pools and balconies, hoteliers and developers should always be looking for ways to make guests feel like they are on their own private getaway—which can be difficult when every guest stays on-property throughout their stay. How a property differentiates itself from a service standpoint and how it goes the extra mile to meet these expectations can make all the difference in the world. Many successful all-inclusive properties have undergone a major customer service training overhauls to attain that luxury standard.
3. How are hoteliers, developers, and investors reacting to this evolution?
Brands have already started to recognize this shift toward a more luxury all-inclusive offering, and I think we’ll see even more big hotel companies enter the ring in 2018 and years to come. Hyatt was the first of its kind to do this. This is very positive for travelers because as competition in the market grows, we’ll see higher levels of service and more innovation, which will only continue to transform the sector. From a developer and investment standpoint, at least in the short term, we’ll continue to see the majority of the investment come from private capital and existing owners who invest and will continue to develop in the sector. However, as the sector grows—especially in the Caribbean—and institutions begin to see the strong ROI of successful developments, I think we’ll begin to see more institutional investment in the long term.
4. Which markets do you predict will grow the most as the all-inclusive sector continues to transform?
The two biggest luxury all-inclusive markets right now are Mexico and the Caribbean. Because of the popularity of the cruise industry in the Caribbean and the overall value proposition that the region offers both developers and luxury all-inclusive guests, I foresee strong growth in that market. As a matter of fact, Lionstone Development is currently looking to increase its footprint in the Caribbean by assisting with a large-scale development of multiple brand hotel sites. These are transaction we should be announcing soon.
Aside from the Caribbean, brands are also showing more interest in expanding their luxury all-inclusive offerings in Central America, Hawaii, the Adriatic Islands and even Asia. Eventually, there will be worldwide recognized brands in the sector that bring their offerings to very distinct markets and tastes.
The two biggest luxury all-inclusive markets right now are Mexico and the Caribbean. Because of the popularity of the cruise industry in the Caribbean and the overall value proposition that the region offers both developers and luxury all-inclusive guests, I foresee strong growth in that market. Aside from the Caribbean, brands are also showing more interest in expanding their luxury all-inclusive offerings in Central America, Hawaii, the Adriatic Islands and even Asia. Eventually, there will be worldwide recognized brands in the sector that bring their offerings to very distinct markets and tastes.
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Diego Lowenstein has been part of the family’s varied business interests across several countries since 1990. Before relocating to the United States in 1999, he held executive positions with several of the family’s companies in Argentina including its real estate holdings and development firm, food service and restaurant, operating and franchising ventures. Diego’s active involvement and know-how in acquiring, developing, revitalizing and repositioning hotels and casinos throughout Florida and the Caribbean has helped lead the entrepreneurial firm to new heights. In partnership with service industry leaders including The Ritz-Carlton Hotel Company, Kimpton Hotels, AM Resorts, the InterContinental Hotels Group, Virgin Hotels, and Hilton Hotels, Diego has fulfilled developments in markets that include South Beach, Downtown Miami, Ft. Lauderdale and a half dozen markets in the Caribbean. His knowledge in multinational operations and marketing has supported Lionstone’s further expansion into luxury residential real estate and mixed-use hotel developments.
Since 1999, Diego Lowenstein has served as the Chief Operating Officer of Lionstone and assumed the position of Chief Executive Officer in 2003. Among his many roles, he oversees the asset management structure for third party managed properties, supervises the self-managed gaming division and acts as Managing Partner with joint venture partners in existing operations held in partnership and in newly formed developments. He is responsible for directing activities including deal structuring, financial feasibility analysis, financing, hospitality chain and management firm negotiations, sales and marketing, bidding and construction.
Contact: Michael Radlick
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