Hilton Keen on Making its All-Inclusive Portfolio Grow
Hilton is the latest major hospitality player to enter into a niche, but growing sector of accommodations.
Hilton announced its partnership with all-inclusive specialist Playa Hotels & Resorts to grow Hilton’s portfolio of all-inclusive resorts in the Caribbean and Latin America. If Playa sounds familiar, it’s because it is the same company that Hyatt worked with back in 2015 to launch Hyatt’s two all-inclusive resort brands, Hyatt Ziva and Hyatt Zilara.
Hilton’s alliance with Playa includes the addition and renovations of two all-inclusive resort properties that will be owned and managed by Playa. Unlike Playa’s partnership with Hyatt, Hilton has decided to use the Hilton Hotels & Resorts brand for its all-inclusive properties, rather than launch new ones.
The two initial resorts to be added under this partnership by the end of 2018 will be the Hilton La Romana, an All-Inclusive Resort (formerly known as the Dreams La Romana), and the Hilton Playa del Carmen, an All-Inclusive Resort (formerly The Royal Playa del Carmen). Hilton and Playa have plans to open eight more all-inclusive resorts together by 2025.
For both Hilton and Playa, the alliance was one that had been in the works for some time, as well as one that both parties see as being mutually beneficial.
Hilton has nearly 80 million loyalty members and a broad distribution reach, as well as specialized sales teams for selling group and incentive business, whereas Playa has experience operating all-inclusive resorts where the cost of a stay generally includes the cost of lodging, food, drink, and sometimes even airfare.
Hilton currently operates about nearly a dozen all-inclusive resorts around the world today, including the Hilton Rose Hall Resort & Spa in Jamaica which is owned and operated by Playa.
However, Hilton vice president of development for Latin America, Juan Corvinos, said the new Hilton-Playa partnership demonstrates Hilton’s commitment to accelerate its growth in the all-inclusive market, and that Playa was the ideal partner with which to do so.
For Playa, partnering with brands is the company’s primary strategy for growth in the all-inclusive space.
Hilton and Hyatt aren’t alone in their ambitions for growing in the all-inclusive accommodations space.
Most recently, Spanish hotelier NH Hotels announced its own partnership with Apple Leisure Partners, the company behind all-inclusive brands such as Secrets and Dreams to expand those brands within Europe, as well as launch a new all-inclusive brand called Amigo Hotels & Resorts.
But the major hotel brands are getting closer to doing so, and they are, slowly but surely, entering a sector of hospitality long dominated by family-owned Spanish hotel chains that include brands such as Melia, Iberostar, and Riu.
Therefore, all-inclusive resorts enable price-sensitive travelers to focus much more on included amenities and on the overall trip experience, rather than fixate on room rate alone.
According to STR, all-inclusive resorts in the Caribbean region saw revenues of $3.8 billion in 2017, an increase from $2.2 billion in 2012.
These types of properties, too, have always attracted a very global audience, and have been popular with European travelers in particular, who are familiar with brands like the aforementioned, as well as Club Med.
And while not as many resorts are being built today as there are limited- or select-service hotels, Hanson believes that the future of resorts lies in adopting the all-inclusive model. “I think a major phase in the evolution of resorts for global lodging companies will be all-inclusive over the next several years.”
For hotel brands seeking to grow their respective all-inclusive resort portfolios, growing with a partner like Playa can often be a safer bet than trying to launch an all-inclusive brand on their own.
And whether those brands decide to launch new brands, as Hyatt did, or use an existing brand, as Hilton has, is also a deciding factor.