October 10, 2022 Blog Pro 0 Comments

The strength of the post-pandemic leisure travel market has been undeniable and shows no signs of weakening, largely driven by pent-up demand for vacation getaways.

 

In particular, today’s consumers are re-energized to create special memories with family and friends though travel experiences. According to the American Express 2022 Global Travel Trends Report, nearly 80% of those surveyed plan to travel more with family this year than last year, and 58% state they are more interested in multi-generational journeys. And, findings from Destination Analysts’ “State of the American Traveler” for September point to family trips and romantic getaways being top of mind with leisure travelers, with one-third of those surveyed saying that luxury travel experiences are an important part of their leisure journeys.

 

This robust leisure sentiment is just one indicator of resort development’s bright future, as increased demand encourages new product supply. The hotel industry continues to reveal its resiliency as evidenced by a recent report from CBRE, now expecting full recovery in average daily rate (ADR) in 2022 and in demand and revenue per available room (RevPAR) in 2023.

 

With consumers having higher expectations about their travel experiences post-pandemic, luxury all-inclusive resorts are in the enviable position to surpass guest demands, cultivate coveted customer loyalty, and achieve financial success thanks to the characteristics that distinguishes the concept – beautifully appointed accommodations, an extensive range of activities and entertainment, sprawling layouts in exquisite beachfront locations, diverse high-quality food and beverage offerings, an authentic sense of place whether through hotel décor or cultural opportunities offered to guests, and an unrivaled level of customer service throughout the stay.

 

How does this inspiring climate impact resort development? Developers, investors and owners continue to seek smart real estate projects delivering a consistent and healthy returns on investment driven by high occupancy rates and spend that exceeds expectations. Considering the strength of the leisure travel segment and the reliable revenue stream it provided during the pandemic, plus the exceptional features of a luxury all-inclusive resort and the extensive ease of planning that the model affords groups and multi-generational travel (a flourishing trend), developing luxury all-inclusive resorts with the right partner reflects an attractive real estate investment proposition well-poised for a thriving future.

 

Recognizing this potential for product longevity and profitability, hotel companies continue to embrace the smart business strategy of adding all-inclusive resorts to their growing offerings. Hyatt’s acquisition of ALG, which was completed a year ago, has already significantly exceeded expectations, evidenced by information Mark Hoplamazian, Hyatt’s CEO, shared during the company’s earnings call for the second quarter 2022.

  • Through the first six months of 2022, ALG has already surpassed full-year 2019 economic performance – and non-package revenue (by upselling/cross-selling guests) had a significant positive impact on results as well with a 26% increase, when compared to 2019 — a testament to compelling programming at ALG’s resorts
  • ALG has already achieved 10% net rooms growth since the beginning of 2022, surpassing the growth target of 10% that was projected for the entire year – pointing to the keen appeal the luxury all-inclusive resort product holds for developers and investors
  • Hyatt’s second-quarter performance was the “strongest in the company’s history by a significant margin,” fueled by “record-level leisure demand” and the ALG all-inclusive portfolio

 

These numbers speak volumes about both consumer satisfaction with the luxury all-inclusive model and developer interest in raising one of the flags in the AMR Collection on new-builds and conversions in existing and emerging markets around the globe. Last year in particular, the AMR Collection expanded its footprint in new and key destinations, including Cartagena (marking our South American debut), Mazatlan, Cozumel, Los Cabos, Curacao and St. Lucia, while growth continues in our established destinations, such as Montego Bay, Punta Cana, Cancun, and the Riviera Maya. Since the beginning of 2022, ALG has increased its footprint with three resorts, 797 rooms, three destinations, and one country (Greece). By the end of this year, we’ll open a resort in Cabeza de Toro, Punta Cana and unveil the first Secrets on Isla Mujeres. In late 2023, we’ll be expanding our presence with the second AMR Collection-branded property on St. Lucia and the third in Punta Cana. Most recently, it was announced that five luxury all-inclusive resorts under the Secrets, Dreams, Breathless and Alua brands will be coming to the Bulgarian Black Sea coast over the next two years as a result of the first newly inked deal under Hyatt’s Inclusive Collection, marking the first Breathless resort in Europe and the Inclusive Collection’s entry into a third European country.

 

The strength of the leisure travel segment and the AMR Collection’s impressive growth trajectory powerfully complement the key reasons why the luxury all-inclusive resort model remains a profitable investment, including achieving high occupancy year-round resulting in a very financially strong product, transforming the destinations they call home by dramatically boosting the local economy, and providing lenders with a significant level of confidence to back the development of this high-level, quality vacation experience.

 

The choice of resort partner is firmly connected to the profitability and ROI realized by developers, investors and owners. Partnering with a resort management company that possesses the breadth of expertise, experience and insights of the AMR Collection provides developers with a distinct competitive edge, particularly in this lucrative landscape with the soaring leisure segment.

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Leisure Market’s Resiliency Fuels Continued Luxury All-Inclusive Resort Development was last modified: October 10th, 2022 by Blog Pro