As Marriott International doubles down on its all-inclusive expansion plans in the Caribbean, it's becoming clear the hospitality giant is taking a no-holds-barred approach to rapidly scaling its presence in the space.
"Marriott has been interested in the all-inclusive market since the early 2000s," said Chuck Kelley, partner in Cayuga Hospitality Consultants and a former executive vice president for Marriott's Caribbean and Latin American region. "Marriott had done some research then that showed that eight out of 10 of their customers, when making reservations, inquired about all-inclusive. So, yes, Marriott is a latecomer, but given their size and scope, their existing presence in the Caribbean and customer interest in a Marriott all-inclusive product, I'd say give them three to five years, and they're going to be a very serious all-inclusive player."
Among Marriott's more recent announcements is its October agreement to acquire Elegant Hotels Group, owner of seven Barbados properties, in a deal valued at around $199 million. Marriott said it plans to renovate the Elegant hotels and operate all seven as all-inclusive resorts under a Marriott brand.
The move will single-handedly make Marriott a major all-inclusive operator in a market that hasn't historically been an all-inclusive-heavy destination. According to Brian Hegarty, vice president of marketing for Travel Leaders Network, Marriott will account for around 500 of Barbados' existing 2,000 rooms of all-inclusive inventory.
Hegarty, however, said he did not think Marriott's outsize presence on the island will significantly alter the market in the short term.
"Considering that Marriott is taking over existing properties, I don't see this as a big shift," Hegarty said. "It would be different if they were building a new 1,000-room complex."
Still, the Barbados expansion is expected to have a ripple effect, especially when combined with Marriott's other forays into the space, which include several larger, newbuild developments in other Caribbean markets.
The company's plans call for a new 650-room Autograph Collection resort in Punta Cana, Dominican Republic, and four resorts in a single development on Mexico's Riviera Nayarit: a 240-room Ritz-Carlton, a 400-room Westin, a 300-room Autograph Collection resort and a 500-room Marriott. Those properties are scheduled to open between 2022 and 2025.
In November, Marriott added to the pipeline with details on the Marriott Hotel Al Amaterra in Trelawny, Jamaica, which is expected to be completed next year, and a 283-room Autograph Collection resort on Curacao, set to debut by 2024.
"Any time you have any big name coming in, that's going to be a game changer," said Kellen Collina, a VIP Vacations travel advisor. "As an example, if you look at Hyatt Ziva opening a huge waterpark at its new Cap Cana property [in the Dominican Republic], the fact that there aren't any other family-friendlies in Cap Cana with a waterpark certainly puts pressure on other all-inclusives in the area. We start to see more all-inclusives deciding to do renovations that normally maybe would have been pushed off for a bit."
Amy McHugh, co-founder and director of sales for Dream Makers Vacation Services, echoed Collina's sentiment but remained optimistic that with all-inclusive demand continuing to grow, there will likely be a large enough market for most players to thrive in the long term.
"In the beginning, everyone will feel some pain," McHugh said. "But I don't think there's major cause for concern once the dust settles. Our clients can be very loyal to the all-inclusives [they visit regularly], and even if we expose them to something new, sometimes they just like what they like. I don't think [Marriott's] news will change that."
According to Geoff Millar, co-owner of Ultimate All-Inclusive Travel and Ultimate Hawaii Vacations, Marriott's big splash into the sector will accelerate the ongoing evolution of the all-inclusive category, a move he sees as a net positive.
"It's competition that has really fueled all-inclusives to become what they are today," Millar said. "In Jamaica, for instance, we've seen some of the biggest change. Ten years ago, Sandals and Couples resorts didn't really have to put out top-quality product, but their quality has since increased because you had AMResorts, Palladium, Iberostar and others move into all-inclusive in a big way. Competition increases quality, and for our clients, that's a really good thing."
Millar added that smaller all-inclusive operators could respond by choosing to align themselves with a Marriott brand or by completely reflagging with Hyatt or Hilton. Additionally, in smaller Caribbean markets like Barbados, airlift could increase substantially due to the presence of a brand that Millar said "carries some weight," boosting the destination overall.
According to VIP Vacations' Collina, however, having a larger brand name isn't always a clear-cut advantage when it comes to selling all-inclusives.
"We sometimes struggle a bit with educating clients when it comes to the Hyatt or Hilton all-inclusive properties," Collina said. "It's not because those names aren't respected or well-known or the properties aren't amazing, but when people see Hyatt or Hilton, they automatically think about that Hyatt or Hilton hotel they have in cities like New York or down the street from them. And then we have to really explain what a Hyatt or Hilton all-inclusive is. And that is something that could play out with Marriott's all-inclusives, as well."