by Michael J. Shapiro | October 18, 2019

Marriott International has struck a deal to acquire Elegant Hotel Group, a collection of seven owned and operated all-inclusive hotels, as well as a restaurant, on the island of Barbados. The US$199 million deal will provide Marriott with 588 luxury rooms on the island, as well as a foothold in the all-inclusive market.

Marriott recently launched an all-inclusive platform to expand its presence in the that market, courting owner investment while simultaneously announcing the development of five new-build all-inclusive resorts, accounting for more than 2,000 rooms in total and with planned opening dates between 2022 and 2025.

The first all-inclusive property will be a 650-room Autograph Collection resort in Punta Cana, Dominican Republic, with a planned 2022 debut. The other four resorts will be part of a major development, NIA, in Mexico's Riviera Nayarit near Punta de Mita. Two of those resorts are expected to open in 2023: a 240-room Ritz-Carlton and a 400-room Westin. The remaining two, a 300-room Autograph Collection resort and a 500-room Marriott Hotels resort, are scheduled to debut in 2025.

Marriott intends to bolster its all-inclusive portfolio through a mix of new-builds and conversions in popular vacation destinations, initially under the following brands: Ritz-Carlton, Luxury Collection, Marriott Hotels, Westin, W Hotels, Autograph Collection and Delta by Marriott. Each property would maintain the characteristics of their brands but offer all-inclusive packages and pricing.

The hospitality company's discussion of the new platform has, to date, focused on vacation destinations and leisure travelers. But the all-inclusive segment in general has been gaining a lot of attention in the meetings space. The use of all-inclusive destinations is on the rise, particularly for incentives, according to the Incentive Travel Industry Index. Northstar Meetings Group, the parent company of Meetings & Conventions, will hold its first Destination All-Inclusive hosted-buyer event in November 2020, specifically targeting planners looking to book business at turn-key venues and cruise ships.

The Elegant Hotel Group acquisition is still subject to Elegant shareholder approval and other customary closing conditions. Once final, Marriott plans to renovate the Barbados properties and then rebrand each under one of Marriott's collection brands. Given Marriott's asset-light strategy, the company will likely sell the hotels after a period of time, while securing long-term management agreements to continue operating them.

Elegant's existing hotels are currently known as the Colony Club, Tamarind, Crystal Cove, Turtle Beach, Waves Hotel & Spa and Treasure Beach.