Hyatt all-inclusive resorts now outnumber Intercontinental Hotels Group, Marriott, and Hilton combined. But storms disrupted an otherwise ideal 2024 performance.
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Strategic Expansion: Joint Venture with Piñero Group
In response to the challenges faced in the all-inclusive market, Hyatt announced a strategic joint venture with Spain’s Piñero Group, the parent company of Bahia Principe Hotels & Resorts. This partnership aims to expand Hyatt’s presence in the all-inclusive sector by incorporating Bahia Principe’s properties into Hyatt’s portfolio. The collaboration is expected to enhance Hyatt’s offerings and provide guests with a broader range of all-inclusive options.
“The deal, expected to close in the coming months, will add 23 resorts and 12,000 guestrooms to Hyatt’s Inclusive Collection. These properties include 22 Bahia Principe resorts in the Dominican Republic, Mexico, Jamaica and Spain as well as the Cayo Levantado Resort in the Dominican Republic. Hyatt’s all-inclusive portfolio will increase its room count by about 30% with the additional resorts.”
But most importantly:
“Bahia Principe resorts will be integrated into the World of Hyatt loyalty program.” – Travel Weekly
A closing period and go-live for integration remains unclear but following prior examples should be between 12 and 16 weeks.
Comparative Overview: All-Inclusive Portfolios of Major Hotel Chains
The all-inclusive market has become a focal point for major hotel chains, each striving to capture a share of this lucrative segment. As of November 2024, the approximate number of all-inclusive properties for leading hotel groups is as follows:
•Marriott International: Marriott has been expanding its all-inclusive portfolio, particularly through its Autograph Collection and Delta Hotels brands. The company offers a range of all-inclusive resorts in destinations such as the Caribbean and Mexico. (The Points Guy) Marriott has 36 all-inclusive properties in its portfolio.
•Hilton Worldwide: Hilton has made significant strides in the all-inclusive market, with properties across the Caribbean, Mexico, and other prime locations. The company’s all-inclusive resorts are designed to cater to both family vacations and romantic getaways. (Hilton) Hilton has 15 all-inclusive properties in its portfolio.
•InterContinental Hotels Group (IHG): IHG has been expanding its all-inclusive offerings, notably through a partnership with Iberostar Beachfront Resorts. This collaboration has significantly increased IHG’s presence in the all-inclusive market, providing guests with a variety of resort options. (IHG) The chain has 70 all-inclusive properties in its portfolio.
These expansions reflect the growing importance of the all-inclusive model in the hospitality industry, as travelers increasingly seek comprehensive vacation experiences. Hyatt purchased ALG in 2022 with just over 100 all-inclusive properties adding to its own line of Ziva and Zilara (10 properties.) Additional properties in development at the time, like Impression by Secrets Isla Mujeres grew the number by another handful of properties then the Bahia partnership adds a further 22 properties. Hyatt is far and away the all-inclusive leisure leader.
Hyatt’s Q3 Performance: A Decline in All-Inclusive Revenue
In the third quarter of 2024, Hyatt reported a decline in revenue from its all-inclusive resorts. The company attributed this downturn to a combination of factors, including increased competition and shifting consumer preferences but also leaned heavily on an adverse hurricane season.
“The company disclosed in its Q2 earnings report that its Inclusive Collection portfolio enjoyed “a really strong” first quarter with double-digit net package RevPAR, but that was followed by a more modest 3% increase in the second quarter.
The Q3 decline was particularly pronounced in the Americas region, where the company’s Inclusive Collection properties saw net package RevPAR fall 5%, due primarily to hurricane impacts. (Hyatt defines net package RevPAR as including revenue derived from the sale of package revenue comprised of rooms revenue, food and beverage and entertainment.)” – Travel Weekly
Despite the overall growth in the travel industry, Hyatt’s all-inclusive segment faced challenges in maintaining its revenue streams during this period.
What appears to be verboten in the industry is any mention that there’s a travel slow down for any number of viable reasons other than weather: inflation, an election year, an exhausted revenge travel demand. It can’t be stated clearly here which of these options are true and certainly Hyatt has seen the decline from the start of the year but still made the investment with Piñero, a smart long term outlook.
That said, maybe this is simply a slight hitch as Hyatt CEO, Hoplamazian, noted “forward bookings show promise for the segment, with Americas all-inclusive resorts’ pace up 10% over the [holiday] period as well as up over 20% for the first quarter of 2025.”
Conclusion
Hyatt’s recent financial performance in the all-inclusive sector highlights the dynamic nature of the hospitality industry. The company’s strategic partnership with Piñero Group underscores its commitment to strengthening its position in this competitive market. As major hotel chains like Marriott, Hilton, and IHG continue to expand their all-inclusive portfolios, the landscape of vacation offerings is set to become more diverse, catering to a wide array of traveler preferences but Hyatt is clearly in the lead especially at the premium end with 85% of its segment five-starred. Whether revenue challenges are a blip or a sign of more serious concerns in the leisure space remains to be seen.
What do you think?
I am sure there is a crowd for all inclusive hotels. That’s just not for me. I never been to one and don’t plan to ever be. I like to make my own decisions regarding where, when and what to eat and drink.
I’d vastly prefer for Hyatt to build another few dozen Hyatt Regency hotels than to continue to plod further into this sector. I’m a Hyatt loyalist and Hyatt is ignoring the sector that made them successful. On top of that the A-I’s are overpriced, particularly on points. My wife and I visited the Zilara Montego Bay a number of times but Hyatt made some changes – few of which benefited the guests – and jacked up the price on points. Since the proposition has been notably diminished so I’d rather stay elsewhere.
@Christian – The acquisition of The Standard and associated brands could be good and Thompson continues to expand in a way that Regency has slowed which I think is a great, modern fit.
I like AI’s for one night stays. Within Hyatt’s portfolio, the Dreams in Panama and Cozumel can be great values. I’m usually treated well, upgraded to suites, allowed 4pm check-out, and given access to the Club areas.
By comparison, I stayed at Marriot’s Royalton in Grenada this week, and while the property was fine and an OK value ~$350, I didn’t get a suite, I didn’t get late check-out, I didn’t get Club access.
Hyatt just does it better and that extends to AIs as well.
Somehow, higher end all inclusive s communicate a sense of more luxury without being nickel and dimed constantly. But inflation, especially when it comes to points redemption may be contributing to the most Q3 numbers. We have yet to be disappointed by a Hyatt AI.