Mexico's All-Inclusive Resorts

Mexico's all-inclusive resorts continue to evolve By: Mark Chesnut
The Bali Beds at MECancun provide a prime example of the upscale nature of today's all-inclusives. // © 2011 Me lia
The Bali Beds at MECancun provide a prime example of the upscale nature of today's all-inclusives. // © 2011 Me lia

New On the Scene

Some of the newest all-inclusive options on Mexico's Caribbean Coast

• Starwood Hotels & Resorts now offers all-inclusive packages to complement its European Plan (EP) at several Mexican properties, including three in Cancun: The Westin Resort & Spa, Westin Lagunamar Ocean Resort Villas and Le Meridien Cancun Resort & Spa.

• The 417-room ME Cancun converted from EP to an all-inclusive format, which it calls "Complete ME," this year. Non-guests are still able to visit the property's restaurants, bars and beach club.

• Phase one of the newly built Villa del Palmar, the Villa Group's first foray into Mexico's Caribbean Coast, opened in December in Playa Mujeres, about 25 minutes by ferry north of Cancun's hotel zone. The property currently has 150 rooms and two full-service restaurants. Phase two is to be finished by August, with the third and final phase complete by December, bringing the total room count to 415. The property will also have a spa and children's club.

• The family-friendly Azul Fives by Karisma opened in October 2010, about a 10-minute drive from Playa del Carmen. The 260-unit hotel features upscale decor, children's programs and suites with up to three bedrooms.

• The 100-unit Gran Bahia Principe Sian Kaan Condo Hotel, which is about a 15-minute drive north of Tulum, opened in September 2010. Part of the Bahia Principe Riviera Maya Residential Complex, the property offers access to a Robert Trent Jones II golf course.

• In December, the TAO Riviera Maya is to open; it will be a wellness-oriented residential and hotel complex, with programs and classes included with room rates.

• In late 2011, Sol Melia is opening two new properties, the 512-room Paradisus Playa del Carmen La Esmeralda, which is positioned as a luxury family resort, and the 394-room Paradisus Playa del Carmen La Perla, the brand's first adults-only property.

• Riu Hotels & Resorts will open a newbuild hotel in Cancun in early 2012. The property, currently under construction, will belong to the Riu Palace brand, which is the company's top-of-the-line product.

• Oasis Hotels & Resorts, whose properties have been operating under a different name and were not marketed to the U.S. market due to litigation proceedings, are now returning to their former identities. The 736-room Grand Oasis Cancun and the 1,008-room Oasis Cancun are currently open. The 471-room Oasis Palm Beach is scheduled to reopen this spring. The four additional Oasis properties -- the Grand Oasis Caribbean, Grand Oasis Playa, Oasis America and Sens Resort -- will open in the coming months; dates have not yet been announced.

Five Things to Tell Your Clients, Club Med Ixtapa

Read tips on how to address client misconceptions about all-inclusives

More Images

Couples at the Occidental Grand Cozumel have everything provided for them. // © 2011 Sol Melia

Couples at the Occidental Grand Cozumel have everything provided for them. // © 2011 Occidental

At the Occidental Royal Hideaway Playacar, service is key. // © 2011 Occidental Hotels & Resorts

At the Occidental Royal Hideaway Playacar, service is key. // © 2011 Occidental Hotels & Resorts

The all-inclusive concept may be nothing new, but on Mexico's Caribbean Coast, the range of options available is expanding like never before.

In both Cancun and the Riviera Maya, new resort properties are rising along the shore, while some existing hotels have thrown their hats into the all-inclusive ring.

What's pulling new properties into this well-developed market segment? For ME Cancun, which dropped the European Plan (EP) in favor of the all-inclusive platform on Jan. 1 of this year, it was customer demand, according to Tony Cortizaz, vice president of marketing at Sol Group Corporation, which provides services to Sol Melia.

"The economic challenges that were taking place probably had a role to play," he said. "We were getting asked way too often by our clientele if we had the option. So it was about listening to the customer."

As a result, ME Cancun has taken a slightly different path from its counterpart in Los Cabos, ME Cabo, which continues to operate with the EP. In addition, ME Cancun stands out from other all-inclusive properties in Cancun, since it still allows non-guests to use the beach club, restaurants and bar areas.

"I believe that this brings another type of experience to hotel guests," said Raul Petraglia, the hotel's general manager, explaining that the property wants to maintain its reputation as a social hub for locals as well as visitors from other hotels.

Starwood's decision to introduce an all-inclusive option at its Mexico properties is also due client demand and economic conditions, according to Alan Duggan, vice president of sales for the Latin America division at Starwood Hotels & Resorts.

"We are always looking to ensure that we are meeting the needs and demands from both our current loyal guests, as well as to attract new visitors to our hotels," he explained. "Certainly, the current economic climate has influenced the way some people will travel, and having the benefit of an all-inclusive offer, in addition to our EP promotions, is a way to best meet a broad array of the traveling consumerís needs."

An Evolving Product
The all-inclusive offerings on Mexico's Caribbean Coast are not only growing in number; they are also diversifying, according to industry observers.

"Definitely, the resorts are doing things to improve themselves," said Karina Martin, a travel consultant at Vision 2000 Travel in Calgary, Canada, "whether it's butlers, beach service or other ways to make themselves different."

And as hotels differentiate their product in terms of ambience, niche and price point, Martin said, she is able to pitch all-inclusives to a wider array of clients, including an increasing number of upscale travelers, who she said tend to choose places like the Royal Hideaway Playacar.

"I sell to everyone from oil company executives to the owners of a small mom-and-pop shop. Everybody has different needs, and there's always something for everyone down there," Martin said.

Today's budget-conscious climate also makes the all-inclusive concept an easier sell, according to Martin.

"We like to joke that there are some clients who get inside the four walls of the resort and never leave because they don't want to," she said. "They've paid their money to get down there, and that's all they can afford. They don't want to leave the resort, and they don't need to."

"We definitely see the whole industry of all-inclusives not just growing, but also evolving," said Alex Zozaya, president of AMResorts, which has seven all-inclusive resorts in Cancun and the Riviera Maya. "The consumer is the one whose taste and expectations have evolved."

As a result, hotels are scrambling to meet the increasingly high expectations of travelers and to compete with the larger number of all-inclusive properties.

"There are two things we have to respond to," Zozaya explained. "Number one is consumer preference. Number two is our competition. For the consumer, we have made the product a lot more sophisticated. When we started the company almost 10 years ago, we thought the product would be in the $100,000- to $125,000-per-key range, which is like a four-star-plus hotel. Now we're talking an average of $300,000, $400,000 and $500,000 per key, which is three or four times more than we were expecting to invest. We have added more restaurants per available room than we had before. We added a lot more flexibility and value. We just added unlimited phone calls and laundry services."

In short, the average all-inclusive resort is now likely to include more than it used to.

"We constantly have to reinvent ourselves and make sure that weíre continuously upgrading all of our resorts," concurred Kathy Halpern, vice president of sales and marketing at Occidental Hotels & Resorts, which operates the Allegro Playacar, Royal Hideaway Playacar and Occidental Grand Xcaret in the Riviera Maya. "And it's not just upgrading the amenities, but itís also the level of service."

As competition heats up, Halpern added, "a lot of hotel chains have lowered their rates. But it's not just rates anymore. Clients want value. They want value-added features."

Decisions, Decisions
With so many choices out there, how can agents decide which properties to sell?

"Travel agents need to consider a number of factors, including company reputation, consumer satisfaction and, most importantly, the company's commitment to the travel agent," said Frank Maduro, vice president of marketing for Palace Resorts, which recently celebrated the awarding of a Four-Diamond rating recognition to its Moon Palace Golf & Spa Resort in Cancun. "Who is making an investment in the travel agents, who is directly servicing them, who has been in business for many years? These factors really differentiate the resorts in this area and put those valuing the travel agent on a different level."

Education is an important way to stay on top of the offerings, according to Jayne Weyeneth, a travel agent at Uniglobe Professional Travel in Danville, Calif.

"As an agent, I have pursued various webinars to keep updated and have also completed several courses that are available," she said, ticking off a list of educational programs and certifications that have helped her better sell the destination. "I am a certified Official Cancun Counselor, Cozumel Consultant, Yucatan Holidays Specialist and a Master Agent with AMResorts, as well as other resort specialist programs and the Magic of Mexico program with the Mexico Tourism Board."

Weyeneth noted that Mexico's Caribbean all-inclusive product is an easy sell, even for clients based in the Western U.S. who might be tempted by the proximity of Mexicoís Pacific Coast.

"What I sell is the Caribbean," she explained. "I sell the water. I sell the beaches. I just think the beaches are better on the Caribbean Coast. I also sell the archeological sites."

If current trends continue, itís likely that travel agents will have even more all-inclusive products to sell in Cancun and the Riviera Maya.

"I think we're far from saturated," said AMResorts' Zozaya. "Look at places like Palma de Mallorca, in Spain, where there is a natural market that is from one to five hours away by plane, which is the same distance that we have in Cancun and the Riviera Maya from similarly sized markets -- namely, the U.S. and Canada. Then you take into consideration that Palma de Mallorca has 250,000 rooms and we in Cancun and the Riviera Maya have close to 70,000. They have three times more for the same size market; the only difference is the market in Europe is just a summer market. They do all those numbers in only six months."

Cancun and the Riviera Maya's peak season is much longer, Zozaya noted, making the growth of hotels -- and all-inclusive options -- nearly inevitable.

"We're a year-round destination," he said. "Right now, we're only getting 6.5 to 7 million visitors to all of Mexico and, out of that, maybe a little more than half visit Cancun and the Riviera Maya ó maybe 3.5 to 4 million a year. That number could be 20 or 25 million one day. So I see a tremendous potential to keep growing."

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