August 11, 2021 Blog Pro 0 Comments

Highlights

  • Among the multitude of hotel types to develop, the luxury all-inclusive resort model has emerged as a strategic, financially strong choice that delivers in droves for investors
  • Key reasons to build or convert to a luxury all-inclusive resort include how this extremely customizable concept exceeds consumer demands, delivers a predictable and robust return on investment, appeals to lenders for its revenue-earning potential, boosts local economies and a destinations’ talent pool, and is positioned to prosper post-pandemic and beyond
  • Aligning with the right partner, a proven leader in the luxury all-inclusive resort space, makes a significant difference in developing a successful property

Today’s hotel developers are faced with an enormous variety of lodging options, so how do they choose the best segment for their next hospitality venture? Following a path to profitability and a solid return on investment leads developers to the luxury all-inclusive resort model. Developing a luxury all-inclusive resort is a smart, economically resilient, convenient business decision that produces an attractive, sustainable resort concept delivering wide-reaching positive impact. Here are the five key reasons why developers are increasingly embracing the growing strength of building or converting to a luxury all-inclusive property.

  1. Luxury all-inclusive resorts deliver ‘more’ to guests

All-inclusive resorts used to evoke ideas of inexpensive alcohol, mediocre buffets, and limited activities, but with the concept’s evolution from mass market product to one that embodies luxury, a new definition deeply resonating with affluent consumers was born.

Today’s luxury all-inclusive resorts are characterized by “more” – more space in accommodations and oversized suites; more a-la-carte restaurants for diverse international options and fine-dining experiences; more activities and choice; and more exclusivity with a “hotel within a hotel” preferred vacation club option. Delivering “more” has further shaped the definition of a luxury all-inclusive resort, which is built on the pillars of comfort, customization, cost and convenience, and truly allows consumers to unwind and relax.

Apple Leisure Group (ALG) subsidiary AMResorts was founded in 2001 with the mission of presenting a quality all-inclusive resort product with large, stylish rooms, superior gastronomy, and extensive entertainment and activities. We saw an opportunity to change the perception of all-inclusives with an elevated-caliber product, and we succeeded with our portfolio of brands. A testament to AMResorts’ class of excellence, the hotel company currently has two AAA Five-Diamond properties, both in Mexico (Zoëtry Paraiso de la Bonita in Riviera Cancun and Secrets Maroma Beach Resort and Spa in Riviera Maya) and 27 AAA Four-Diamond properties, three times more AAA Four- and Four-Diamond resorts than any other all-inclusive chain in Mexico and the Caribbean.

  1. Luxury all-inclusive resorts achieve a solid ROI

Achieving a robust return on investment is the Holy Grail of any development project.

Luxury all-inclusives need to maintain higher occupancy and RevPAR levels in order to achieve a higher dollar contribution margin and be profitable. Fortunately, all-inclusives generally operate at high occupancy throughout the year, typically around 80% or more, which is significantly above the break-even point, resulting in a very profitable product.

Fueling a resort’s year-round occupancy, though, is intrinsically tied to distribution, so aligning with the right hotel operator partner who can help power occupancy through a connected distribution network is invaluable to achieving a healthy ROI, even during ramp-up periods or times of crisis. The strength of the luxury all-inclusive resort space is a resort operator’s demonstrated track record of penetrating the market. ALG Vacations has eight B2B and B2C brands that include traditional tour operators, OTAs, airline vacation brands. In addition, ALG also includes a destination management company, and a membership program with significant growth and a strong brand following. ALG Vacations transports approximately 3.2 million North American tourists each year, from which 2.3 million go to the Caribbean.

  1. Lenders are drawn to luxury all-inclusive projects

Since any hospitality real estate venture poses risks, profit potential is a key differentiator when it comes to lenders making funding choices. Luxury all-inclusive resorts have captured the attention of lenders for a simple, yet extremely important reason – they are a proven highly-profitable segment.

Lenders are seeing growing market confidence and strong revenue-earning potential in the luxury all-inclusive segment because the concept deeply resonates with consumers seeking top-quality personalized experiences, fine dining and premium liquor, impeccable customer service, and the best value for money. Brand choice for a luxury all-inclusive, whether for conversions or new builds, is a seal of approval that also resonates with lenders. AMResort’s breadth of expertise, experience and insights into the luxury all-inclusive market speaks volumes about a project’s potential success, and it provides lenders with a significant level of confidence.

  1. Luxury all-inclusives elevate local economies

The positive impact of hotel development reaches beyond delivering profitability for owners and a top-class experience for consumers. Luxury all-inclusive resorts transform the destinations they call home by dramatically boosting the local economy.

Delivering unrivaled luxury suggests an elevated level of hotel service and an increased guest-to-staff ratio in order to execute that service flawlessly. A destination’s improved employment levels is a distinct result. Higher service levels result in well-trained employees who acquire skills that make them more marketable and upgrade a destination’s available talent pool.

Local economies further benefit from the opportunity for luxury all-inclusives to source local products to convey authentic destination flavor and by them encouraging guests to head off-property for local experiences, which they have a strong propensity to do for leisure enrichment.

Places like Cancun, Playa del Carmen and Punta Cana are living proof of the positive impact of luxury all-inclusives, experiencing levels of growth places haven’t seen in years. They are flourishing, vibrant and generating wealth for the cities and countries like never before.

  1. Luxury all-inclusives are positioned to thrive post-pandemic and beyond

While the hospitality and travel industries have been dramatically impacted by the COVID-19 pandemic, luxury all-inclusive resorts are demonstrating themselves as a resilient model best poised to emerge from the current situation.

Post-pandemic, the luxury all-inclusive model is expected to perform quite well. The concept of a “luxury bubble” without sacrificing vacation quality attracts sophisticated consumers, plus there is immense confidence that these upmarket properties are adhering to the strictest hygiene protocols and safety measures to ensure guest well-being. The leisure segment has shown to be very resilient because companies may decide to cut expenses and reduce work travel-related costs, but families do not want to give up their yearly vacations. Even less after a year of quarantine and other restrictions.

Brand adaptability to evolving customer demands is extremely vital as the hospitality industry emerges from the pandemic, and the luxury all-inclusive segment is a flexible model providing that game-changing detailed personalization for guests.

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Collectively, these five key reasons affirm why the luxury all-inclusive resort is a smart, strategic choice for developers and investors seeking opportunities with outstanding potential to deliver high profitability. Luxury all-inclusive resorts have staying power, making them ideal for new builds and conversions, and their post-pandemic potential is inspiring. The choice of resort partner is also firmly connected to the profitability and ROI realized. AMResorts has elevated the luxury all-inclusive model in a way that actually gives guests and investors more opportunity for enjoyment and success.

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Affirming The Luxury All-Inclusive Resort Model As A Profitable Investment was last modified: August 11th, 2021 by Blog Pro