Marriott International in US$800m deal to build resorts

Business | 7 Aug 2019 3:18 pm

Marriott International Inc is jumping into the all-inclusive resort business, once the domain of specialty companies that offered lodging, food and other services for a single price, Bloomberg reports.

Marriott, the world’s largest hotel company, announced plans for two new resorts that will cost more than US$800 million combined to build: a 650-room hotel in Punta Cana, in the Dominican Republic, and a multibranded property on Mexico’s Riviera Nayarit that will include the first all-inclusive project in the history of Marriott’s Ritz-Carlton.

“What’s disappointing to us is when one of our loyal customers says, I want to have an all-inclusive experience in a given destination, and by virtue of the fact that we don’t have that offering, it causes them to go outside of our system,” said Tony Capuano, global chief development officer at Marriott.

All-inclusive resorts gained popularity in the second half of the 20th century as companies like Club Med SAS and Sandals Resorts International packaged vacations for bargain-minded travelers.

The niche grew, but the global corporations that came to dominate the hotel industry steered clear.

Hyatt Hotels Corp. finally entered the arena with the launch of two new brands in 2013, while Hilton Worldwide Holdings Inc last year announced plans to expand its all-inclusive offerings.

Bigger players are embracing the model at a time when full hotels are driving new development, said Bjorn Hanson, a consultant to the lodging and tourism industries.

About 1,500 all-inclusive resorts tracked by lodging data provider STR generated US$7.9 billion in sales through the first six months of 2019, a 20 percent increase in revenue from five years earlier.

Marriott operates just one of those properties, a Westin resort in Costa Rica added through the 2016 acquisition of Starwood Hotels & Resorts.

Initially, the company is planning all-inclusive resorts under seven of its 30 brands and is expecting developers to opt for multibranded properties like the one in Nayarit, where developer Artha Capital is building resorts under the Ritz-Carlton, Westin and Marriott Hotels flags, as well as a hotel in Marriott’s Autograph Collection.

Getting into the all-inclusive game may help Marriott appeal to its 133 million loyalty program members, letting them spend points earned traveling for work to vacation with their families. It also helps the company convince real estate developers to partner with Marriott when building new resorts or rebranding existing properties.

 

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