In recent years, Marriott International has made a strong commitment to the resort segment, where traditionally global hotel brands have been less present. Karim Cheltout, Regional Vice President Development for Marriott International in Europe, Middle East & Africa, shares his view on the opportunities in the market.
What can a global brand like Marriott bring to the leisure hospitality market, particularly for owners?
Karim Cheltout: Developers/owners are increasingly seeking out unique value propositions with trusted brands for their properties. Marriott International has leading support platforms – including our global Marriott Bonvoy travel programme membership base – and our long-standing operational expertise in the hospitality industry. We have long standing experience of operating traditional resort properties and the leisure segment.
We also have scale, which can benefit our owners in gaining economies of scale with their operations – a crucial point in this segment of the industry. With our portfolio of 30 brands we also have a breadth of brand options to fit different all-inclusive offerings in addition to our traditional hotel resort portfolio. We’re initially leveraging seven of our brands to grow our all-inclusive portfolio - they’re all full-service e.g. Westin, Delta and Autograph Collection and some are luxury, including W Hotels and The Ritz-Carlton.
Each brand offers a distinctive experience for customers that is true to respective brand values and in line with what can be expected in our hotel properties. For example Marriott Hotels and The Ritz-Carlton can be positioned as family-oriented properties in the premium and luxury segments, W and Autograph Collection can be considered for adult only options, and Westin focusing on well-being and spa experiences.
The all-inclusive model is gaining traction in the resort market: what is Marriott’s strategy in this segment?
Cheltout: We see the all-inclusive segment growing exponentially, especially given consumers’ lifestyles today post pandemic. We see a huge opportunity to expand Marriott’s leisure travel offerings in both All-Inclusive hotels and luxury resorts. All-Inclusive resorts are now one of the fastest growing segments of vacation lodging. Marriott International intends to capitalise on its strong momentum in this area by leveraging both our premium lifestyle brands and luxury brands that guests know and love to drive growth. At the luxury end of the market, guests are seeking convenience and hassle-free vacations and in the premium market people are looking for cost certainty that you get from an all-inclusive experience.
In 2021, Marriott International signed 22 agreements for all-inclusive resorts marking us one of the largest All-Inclusive providers in the marketplace. Currently, our all-inclusive portfolio spans 30 open properties in locations across the Caribbean, Mexico and Central America and we are focused on further expanding our all-inclusive portfolio in popular leisure destinations around the world with both new-build properties as well as, conversions of existing resorts. We see great potential in Europe and Southeast Asia, for instance as we continuously strive to offer our members and customers – as well as our development partners – new travel choices around the world.
What partnerships are you looking to build for Marriott to grow in the market? Is the ownership profile and operational model different from other segments, or between North America and Europe?
Cheltout: During the development process we work closely with our partners, advising and exchanging ideas on the best brand fit, supervising the construction and design, and conducting the pre-opening services until the official opening. Our goal is to always maximise returns while minimising risks for our owners/franchisees. In addition, we also need to leverage the strength of our travel industry partnerships, such as airlines, tour operators, OTAs and agents. In addition, look at partnerships with restaurant and entertainment brands to make a resort stand out and attract customers and members to book and return.
In terms of the ownership profile in Europe and the US – there is no difference. However, in EMEA there is a difference in the perception of all inclusive as historically this has been associated with low-cost mass tourism. So there is a huge shift in thinking for hotel owners, that we need to support, to move their mind set to the new trend of upper-upscale and luxury all inclusive resorts.
Operationally the old all inclusive model’s efficiency was mainly based on cost reduction. The reality today is that the type of traveller booking an all inclusive hotel has changed from “budget” travellers to a more experiential traveller with high expectations who is willing to pay extra for enhanced experiences. The other shift in the all inclusive segment is that in addition to the higher package rates, the incremental revenue at all inclusive resorts is higher than for traditional resorts, through guest spending more on extras such as spa treatments, premium beverages, private dining, local experiences and excursions. Of course all inclusive operations can require a higher number of associates to activate and deliver these high service levels and programming offered by the all inclusive experience which increases the volume and level of operational talent required.
How is operating an all-inclusive asset different from a traditional hotel? What are the efficiencies gained in operating an all-inclusive?
Cheltout: All-Inclusive resorts have unique and distinct physical structure requirements that may limit the ability of some existing properties to convert into the segment or require significant changes and investment particularly with F&B, entertainment and amenities. Due to longer stays and all-inclusive nature, a diverse offering of F&B offerings/ restaurants is critical to address guests needs and ensure a variety of guest experiences.
With Marriott’s all-inclusive resorts, guests can stay with the brand they trust, earn and redeem loyalty points while enjoying great food and beverage, recreational activities and entertainment at a fixed cost.
For owners, the properties are further supported by a powerful distribution platform and innovative sales and marketing programming - including our industry leading loyalty platform and integrated strategic sales organisation – and scale to drive efficiencies and positive economic returns. Our loyalty programme has more than 169 million members globally who keep returning to our properties and are always seeking new experiences and new ways to earn and redeem their points.
Are there specific segments that are better addressed with an all-inclusive offer and why?
Cheltout: We’ve been watching the all-inclusive industry for years, and it’s truly evolving. Post pandemic we are seeing that consumers are increasingly seeking all-inclusive holidays that fit their lifestyles – it’s a hassle-free option with cost certainty, which is appealing in the current climate of economic uncertainty and cost of living concerns in many markets.
Whatever holiday spend bracket you are in we’re all pressed for time and some of us really like keeping things simple. For this audience, paying a single price is attractive.
It is also important to note that this segment has increasingly been going upper-upscale – with affluent travellers looking for a luxury all-inclusive experience which offers elevated food and beverage experiences, and expanded services. This positions Marriott International, with our luxury brands, very well to capture market share.
Why is it important for Marriott to participate in the R&R event?
Cheltout: The R&R conference is unique in that it focuses almost exclusively on the trends, performance and outlook for leisure travel. As the key driver of the hospitality industry’s recovery following the pandemic, it is important to engage in the dialogue around trends impacting leisure travel near and long term. R&R always offers a great opportunity to network with new partners and those we’ve had relationships with for years. This year our team is looking forward to also visiting the recently opened W Algarve resort nearby.
Marriott International is a Patron Sponsor of the Resort & Residential Hospitality Forum