All-Inclusive Resorts Dominate Hotel Industry Discourse in 2022 - CoStar

Excerpt from CoStar

The outsize role leisure travel has been playing in the hotel industry recovery is just one of the reasons brands and investors are flocking to the all-inclusive resort sector, which has been one of the biggest talking points for the industry throughout the first half of 2022.

JLL's recent Americas All-Inclusive Resort Sector Trends & Outlook report points out that demand for all-inclusive resorts is surging, with occupancy for the segment reaching 77% of pre-pandemic levels over the trailing 12 months in the Dominican Republic and Mexico. Higher-end all-inclusives in particular are gaining steam, now making up 28% of overall supply in the Dominican Republic and 33% in Mexico.

A pair of deals in the latter half of 2021 set the tone that 2022 would be a year of all-inclusive expansion with Hyatt Hotels Corp. purchasing Apple Leisure Group for $2.7 billion and Wyndham Hotels & Resorts launching the midscale Alltra brand — its entry into the segment through a partnership with Playa Hotels & Resorts.

Both Hyatt and Apple Leisure executives have been effusive about the synergies of the deal and believe the combination of the companies gives them a uniquely powerful platform to grow the AMResorts portfolio.

Speaking with HNN at the International Hospitality Investment Forum in May, Javier Coll, group president of global business development for Apple Leisure, said he is confident there are opportunities to build and operate high-end luxury all-inclusive resorts in markets that many once considered off-limits for the more cost-intensive operating model. Those markets include Hawaii and Florida.

"It's just a question of can you charge the rates to overcome the additional expense with labor and all those things, and our conclusion is yes, you can," he said.

During his company's most recent earnings call, Hyatt President and CEO Mark Hoplamazian said he was having a hard time tempering his enthusiasm about Apple Leisure and the all-inclusive segment "because the data is quite clear."

"The embedded [average daily rate] for the AMResorts business is up 22% over 2019," he said. "And if you look at the Americas outside of ALG for Hyatt, our leisure-focused business is up 38% in rates for future bookings."

Speaking at the Hunter Hotel Investment Conference In March, Wyndham President and CEO Geoff Ballotti said leisure demand has been a big driver of development for his company.

"We have a very resilient group of owners and franchisees that are feeling very good about where we are today in the cycle," he said. 

Click here to read complete article at CoStar.