MADRID — Sometimes panned as a realm of watered-down drinks and so-so buffet meals, the all-inclusive resort sector is getting a reputational boost from the growing involvement and investment of the big hotel brands, particularly in Europe.

Hotel brands such as Fairmont, IHG Hotels & Resorts and Hyatt Hotels Corp. increasingly are joining European firms long established in the sector — many of them Spanish, such as Barceló Hotel Group, Iberostar Group and Meliá Hotels International.

Speaking on a panel at the Atlantic Ocean Hotel Investors’ Summit, Sara Rosso-Cipolini, CEO and president of hotel management firm Planhotel Hospitality Group, said all-inclusives are discernibly shifting to higher-market accommodations.

“[All-inclusives] are shifting north due to demand from the guest, and we are seeing additional revenue on top of the rent and providing better quality. It makes life easier,” she said.

Gabriele Burgio, president and CEO of Italian travel and package group Alpitour World, said the increase in quality and offerings in the sector is also boosting real estate values.

Another plus is the stay itself, said Javier Águila, group president for Europe, Africa and the Middle East at Hyatt Hotels Corporation.

“All-inclusives moved from being a vacation type to an experience. It is changing quickly,” he said, adding that at one time “unlimited phone calls to the U.S.” was considered a perk at an all-inclusive resort.

Águila is the former CEO of Spanish resort firm Alua Hotels & Resorts. In December 2018, American hotel manager and operator Apple Leisure Group bought a majority stake in Alua.

In August 2021, Hyatt agreed to buy Apple for $2.7 billion, a deal that was completed at the end of that year and that doubled the American hotel firm’s resort portfolio.

Raúl González, CEO for Europe, the Middle East and Africa at Barceló Hotels & Resorts, said the all-inclusive resort model, which his company knows well, makes a clear case for the optimization of gross operating profit.

González said new investors and operators will lead to a rise in quality and average daily rates at all-inclusive resorts.

“The customer is ready to pay more as the perception is they will receive better service and quality,” he said.

Burgio said the segment is using more social media than ever before, which has led to more direct sales at his company's all-inclusive resorts. Alpitour World has its own airline, Neos, and resort brand, VOIhotels.

However, with the rise in quality and rates, competition is also increasing.

“Spanish companies now have the challenge to be the best in the world, as they now have competition,” González said.

Águila said the competition will derive from newcomers, often being larger companies, having more leverage in contract negotiations. The business models of the newcomers and of the established players will be different, he added.

González said there are guests who will only consider an independent resort, while Rosso-Cipolini said there are markets, notably The Maldives, where resorts are not able to effectively compete without the presence of a brand.

“We need to take care that people will want to travel to an all-inclusive when they might all start to look alike,” González said.

Investors in all-inclusive resorts will also start demanding more, panelists said.

Águila said growing knowledge and understanding of the all-inclusive model has boosted the amount of capital and the number of investors in Europe, and the rest of the world is catching up.

Rosso-Cipolini said there are some distinct concerns for the sector that must not be ignored. She added all-inclusives are not merely a matter of offering guests everything.

“Choosing what to and what not to include can dramatically affect values,” she said.

Burgio said resorts also cannot ignore community feeling, as all-inclusives often are the largest entity in a community in terms of real estate coverage and jobs creation.

“We are often the engine of parts of the islands we are on. We know of employees who support up to 15 people, so even when there were furloughs going on, we decided to continue to pay salaries,” he said.

González said back when Barceló entered the Punta Cana market in the Dominican Republic, the immensely popular beach destination had only one other hotel.

He said resort and all-inclusive properties can change communities very quickly.

“Now [Punta Cana] has more than 80,000 rooms,” he said.

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