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Charting a course for smart hotel expansion planning requires a deep understanding of the markets in which a luxury resort management company is interested in entering. A strategic approach to global growth is not just about increasing portfolio numbers, but developing a portfolio of profitable resorts, and destination choice is crucial to achieving this success. Ultimately, a “right fit” destination is where luxury all-inclusive resorts are best positioned to thrive.

 

High Development Potential

Destinations don’t all possess the same profitability potential for the specialized luxury all-inclusive segment to succeed and ensure a consistent ROI. Amid a sea of characteristics, what are the destination distinguishers? These key factors have proven themselves to be fundamental when mapping out intentional, successful global expansion of luxury all-inclusive resorts.

• Picturesque, coastal beach locations – The beach is a key activity component of the luxury all-inclusive resort experience, so it’s essential for a destination to have scenic swaths of sand for swimming, sunbathing and a variety of watersports. Additionally, beach locations where there are wide open spaces are extremely important, whether for new-builds or conversions, to allow for the expansive layouts and multiple activities expected by luxury-minded travelers.
• Transport/ample airlift – Sufficient airlift is required in order to drive convenient and accessible travel and ensure a steady flow of visitors. This encompasses flights from multiple international gateways to the destination, regional and national traffic in places such as South America, and proximity to the U.S. as a key feeder market due to travelers’ familiarity and success with the luxury all-inclusive concept.
• Supportive in-destination tourism/government entities – When there is a cooperative spirit in providing statistics, reports, contacts, incentives, and more, plus support in the negotiation process, it creates a welcoming market for the development of luxury all-inclusive resorts. In-destination tourism/government entities are increasingly supportive of bringing luxury all-inclusive resorts to their shores once they recognize the positive impact of this development on the economy – in terms of jobs creation, skill development of work colleagues, and a bolstered economy from increased traveler spend.
• In addition to sun-splashed natural beauty, destinations that have an intriguing culture, fantastic gastronomy, exciting off-property activities, and friendly people are particularly appealing for the concept. This also allows luxury all-inclusive resorts to enhance a sense of place throughout the vacation experience.

 

Why Colombia?

Selecting Colombia for the AMR Collection’s entry into South America – the 268-room Dreams Karibana Cartagena Beach & Golf Resort which will open in Cartagena in April 2022 – reflects investor confidence in the country due to reactivation, economic growth, and the high potential of locations like Cartagena to attract global tourism. Our arrival in Colombia comes at a time when the luxury all-inclusive resort product has proven to be quite resilient during post-pandemic recovery and has re-affirmed itself as a profitable investment that is attracting the attention of investors, owners of independent hotels, and investment funds.

There is tremendous potential in this emerging market, and we want to be there early on to leverage the opportunity. According to the Lodging Econometrics 2021 year-end Construction Pipeline Trend Report for Latin America, Colombia is in the top 5 – the 5^th – countries for hotel construction in Latin America, currently standing at 19 hotels and 2,913 rooms.

 

As travelers are increasingly seeking out idyllic locations in emerging markets, we continue to evaluate these destinations for their development potential, and Colombia has been on our radar for several years because it possesses the fundamental characteristics that are essential for luxury all-inclusive resort development to thrive.

 

Cartagena’s privileged location on Colombia’s Caribbean coast is the gateway to stunning beaches and an existing tourism infrastructure. Dream Karibana Cartagena Beach & Golf Resort is a conversion as it already had a good physical base, which is allowing for easy implementation of design themes and facilities that define the AMR Collection’s brands. Colombia’s proximity to the U.S. and international airlift make the country an attractive market for the development of luxury all-inclusive resorts, plus Colombia is a great destination to generate traffic to Cartagena from within South America in order to feed important domestic tourism. Colombia also has a fantastic food scene, interesting history, great art and culture, welcoming people and natural beauty, which collectively enhance the vacation experience.

 

ProColombia, a government agency responsible for promoting international tourism and foreign investment, has been very helpful in paving the way for development of luxury all-inclusive resorts in the country through assistance with providing information and contacts and helping in negotiations to ensure optimum satisfaction for all partners. There is recognition that foreign investment/hotel projects contribute to economic growth, job creation, and the development of a country’s tourism offerings, as well as the positioning of the country as a diverse and world-class destination. Take for example that Dream Karibana Cartagena Beach & Golf Resort plans to generate about 400 to 450 jobs, a positive boost for the local economy.

 

Partnership Matters

The right partner for a hotel project – a resort management company that has a proven track record of success, plays a leadership role in concept advancement, and has the resources to drive customers to an emerging destination – is crucial in guiding development in new markets.

 

The AMR Collection is the fastest growing resort management company in the Caribbean and Mexico and the fourth largest hotel chain in Spain (in room count). We experienced expansion of 300% in the last decade thanks to global growth efforts, enjoyed 85% global expansion in 2020, announced several new resort management deals in 2021 to expand our footprint in key and new destinations, and entered the beginning of ALG’s next chapter of global growth and success when our acquisition by Hyatt Hotels Corporation was completed last November.

 

ALG’s distribution network through ALG Vacations offers a huge advantage by driving a consistent flow of customers to a destination/resorts throughout the year. ALG Vacations is the world’s #1 provider of U.S.-based leisure travelers to Mexico and the Caribbean, and 30% of U.S.-based ALG Vacations’ bookings are to resorts in the AMR Collection. This is an undeniably impactful way to guide tourist arrivals and enhance profitability potential.

 

Looking Ahead

Entering South America and Colombia with the AMR Collection’s first project is a significant milestone in our expansion. Since the AMR Collection is committed to bringing all the brands in its portfolio to Colombia, the potential of additional destinations to Cartagena, such as Santa Marta and San Andrés, is already being explored. Brazil is another destination under consideration for expansion of the luxury all-inclusive concept because it has the features that our brands require for success, including anticipation that 85-90% of customers will be national.

 

 

Extremely important for expansion of all our brands across South America is creating a life-long journey that begins and ends with us, a philosophy reflected in our tagline, which was introduced last year – “Celebrate Every Moment.” This is a smart, savvy way to raise brand awareness, cultivate customer loyalty, grow hotel business throughout the continent, and affirm our positioning as one of the largest portfolios of all-inclusive branded luxury resorts in the Americas.

 

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The luxury all-inclusive resort concept is a lifestyle choice that is poised for exponential growth when it is developed in the right destinations, but what makes a destination “right?” Where there are scenic beach locations, sufficient airlift, in-destination tourism/government entities that are enthusiastic about the concept, and a destination with an engaging culture, sensational food, and warm, welcoming people – this is when a destination reveals itself as ripe for the luxury all-inclusive vacation concept to thrive.

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