Wyndham launches new all-inclusive resort brand

Wyndham Alltra
Wyndham Alltra Playa del Carmen (Mexico). (Wyndham Hotels and Resorts)

Insight Comment
The pandemic has forced hotel brands to explore ways of improving and increasing their leisure offering. We've seen expansion through M&A e.g. Hyatt's move for Apple Leisure Group and other deals e.g. Marriott's long-term agreement with Sunwing Travel Group. However they do it, the big hotel groups are desperate to increase their options for holidaymakers.

Four months after launching its 21st brand, Wyndham Hotels and Resorts is adding to its offerings again. Unlike the luxury-focused Registry Collection Hotels, however, the new Wyndham Alltra is an all-inclusive resort brand that focuses on the upper-midscale segment.

Wyndham is partnering with Playa Hotels & Resorts, an owner, operator and developer of all-inclusive resorts in vacation destination in Mexico and the Caribbean, for the first two properties, Playa’s 458-room Wyndham Alltra Cancun and the 287-room Wyndham Alltra Playa del Carmen, both of which are located in Mexico. Currently undergoing renovations, both resorts remain open and are scheduled to complete renovations and officially become Wyndham Alltra resorts in December.

“This is a license agreement, it is not owned real estate, it is not managed real estate,” said Geoff Ballotti, Wyndham’s president and CEO. “Ninety-nine percent of our hotels are franchised and that is what these will be; 97 percent of our hotels are not managed and this is very consistent with that.”

The new brand’s name “Alltra” is based on the brand promise of “All-Inclusive Travel for All".

While it focuses on the upper-midscale segment, Wyndham said hotels in the brand will offer upscale food and beverage, services, amenities and activities “with an expressive local flavor at an exceptional value.” The brand will feature both family-friendly and adults-only resorts in the Caribbean and other resort destinations. 

“Today’s announcement combines Wyndham’s robust distribution capabilities and award-winning loyalty program with our highly acclaimed all-inclusive expertise. Together, we are launching a new experience in the upper-midscale resort segment to reach more first-time all-inclusive guests,” said Bruce Wardinski, chairman and chief executive officer, Playa Hotels & Resorts.

Growth Plans

Conversions are going to be a big piece of Alltra’s growth, according to Ballotti.

“These are really high-quality, highly rated resorts, and you can find in those same markets other really high-quality resorts that are independent,” he said. “That opportunity will certainly from a conversion standpoint present itself across Mexico in the resort destinations like Cozumel.”

Wyndham and Playa expect to develop a number of properties under the strategic alliance.

“We have an exclusive development agreement with Playa where we will in Mexico and certain to-be-identified countries in Latin America, they will have the exclusive development agreement for this one brand, which we're thrilled with,” Ballotti said. “So when they develop another Wyndham Alltra or convert another one of their independent hotels to the Wyndham Alltra, they will have the exclusive on that.”

Conversions and development also are expected in other regions beyond Latin America, but Ballotti said Alltra is not going to be the company’s fastest-growing brand.

“When I talk to my development teams in Europe, Africa and the Middle East or Southeast Asia and the Pacific Rim, there's a lot of excitement,” Ballotti said. “There's a lot of opportunity there as our development teams get out and begin to introduce the Wyndham Alltra brand into those markets. Having said that, we want to be very, very selective. The brand is only as strong as its weakest link in the chain. So we will be as we've been with Playa, very slow and deliberate in terms of who we partner with.”

Ballotti expects additions to occur via developers the company already has relationships with.

“We have the largest franchise sales teams that sell direct franchising agreements in the world and those relationships, those will be the first developers, they will talk to,” he said. “We have a development committee that reviews every deal and it's going to have to be upper-midscale product, it's going to have to be high quality and high standards because what is most important to us, to the Wyndham brand certainly to apply is the strength of the brand and what it stands for.”

Leisure Focus

The Alltra launch is very consistent with Wyndham’s strategy and approach from a leisure standpoint, according to Ballotti.

“Throughout this pandemic, roughly 80 percent of our business has been leisure, typically it's 70, and our business travelers really sort of focus as leisure travelers. Our business travelers are much different—80 percent of our business travelers don't have offices they go to. But they love to vacation.”

That love of vacationing has been the impetus behind the launch, along with the demands of loyalty program members.

“It's very consistent in that 50 percent of our check-ins across North America are Wyndham Rewards members, and what they want is just another place to aspire to vacation,” Ballotti said. “When you look at the redemption demands of our nearly 90 million members, what they're most looking for are aspirational leisure resorts to redeem into, which is why we're always from a strategic standpoint looking for how do we make the program more aspirational.”

Ballotti said that Playa’s research shows that all-inclusive offers a distinct cost advantage over planning a trip in individual pieces:

If you were to try to find a resort of equal quality in that market, the cost of that vacation with quality food, quality beverages and amenities, it would be 40 percent more,” he said. “That percentage comes down where there's more pricing power to maybe 25 percent to 30 percent”—still a significant savings.

Members will be able to redeem their Wyndham Rewards points at Wyndham Alltra resorts and earn points for their stays.

Playa owns and/or manages a total portfolio consisting of 22 resorts with 8,366 rooms in Mexico, Jamaica and the Dominican Republic. Playa owns and manages 15 resorts with 6,004 rooms and owns two resorts in the Dominican Republic that are managed by a third party. It also manages five resorts on behalf of third-party owners.

Wyndham Hotels & Resorts’ portfolio comprises approximately 9,000 hotels with 798,000 guestrooms across nearly 95 countries on six continents.