Hyatt Goes All In on All-Inclusive Resorts

On Nov. 1, Hyatt Hotels & Resorts welcomed its first-ever all-inclusive property, the Hyatt Ziva Los Cabos in Los Cabos, Mexico, and it will soon be followed by Hyatt Zilara Cancun, also in Mexico. For Hyatt, the two properties mark a significant entry into an area of hospitality that continues to be popular with leisure travelers and incentive groups, and is just beginning to court the meetings market. We recently sat down with Chris Walker, vice president of brand experience for Hyatt, to talk about how all-inclusives are evolving to accommodate more meeting and incentive groups, as well as how Hyatt’s all-inclusives will differentiate themselves in an heavily competitive market.

Walker: Hyatt is going into a shift in our strategy to be more brand focused. We recognize that we have different consumers whom we are targeting with each of our brands. We realize that we have to be more thoughtful about how we deliver the experiences of these brands. Instead of a traditional consumer package brand, we wanted to make sure it was really clear that the brand experience is our product. The experience is the service that we’re selling and we want to bring that brand to life.

We’ve been looking at this [all-inclusive] space for at least the past three to four years. We saw the same trends: Huge growth, a lot of European planned hotels that were converting to all-inclusives. So we asked ourselves, what’s this new segment, and would it be a good fit for Hyatt? We looked at the business model and talked to our guests. What do our loyal guests think of us going into it? What do all-inclusive customers think of a big brand moving into this space? The feedback was universally positive. The majority of our Hyatt Passport members were already staying at all-inclusive properties. Non-Hyatt loyalists’ perceptions went up when they found out that Hyatt was developing an all-inclusive product. Brand value and recognition brought some credibility to that. It allows us to grow in more resort destinations, and to introduce Hyatt to a new group of customers. 

Walker: We’re partnering with Playa because they have that experience in all-inclusives. We bring the brand and our experience in culinary, meeting planning, and customer service…and we both have a lot to learn from each other.

There are two relationships that we have with Playa. We’re an investor in Playa Hotels & Resorts. That’s the first part of the relationship. In a separate kind of relationship from Hyatt Corporation, Playa is franchising these properties and getting all of the brand pieces that come with a franchise relationship. Because we have both of these angles, we’re working really closely together, and we’re sharing our expertise with one another. 

Walker: We’ve already started doing a lot of guest research with focus groups across the U.S. to really understand the opportunities for differentiation. Guests generally like the all-inclusive experience, and most resorts do well. But at the same time, there are opportunities to improve and to differentiate. 

When people plan a vacation, that’s when the excitement really starts. The anticipation starts to build. That’s when people get that big boost in happiness. Now, however, it’s rare for people to connect with the resort to plan out their days. There tends to be a lull starting from the moment of booking throughout the stay — this lull in keeping the excitement going. 

We also heard that all-inclusives can be a little almost programmed. A little bit of spontaneity and fun interjected in there is a huge opportunity to spice things up. Not everything has to be scripted or put on a calendar. We have to figure out those things to bring that to life. 

The third point of difference is the idea, that perception of an all-inclusive experience being all about staying at the restaurant, beach, or pool all the time. People want to do things that they can’t do at home, like kayaking or paddle boarding, seeing the Mayan ruins, or discovering nesting sea turtles on the beach. There’s a sense that people do want to experience the destination, and to have that element of discovery. 

So far, we’ve taken over two properties, and they’ll act as testing grounds to put some programs into place to see which things work and which things don’t.

Walker: We put a lot of thought into that, asking ourselves it there was enough of a distinction between the two. We didn’t want one brand to be characterized the absence of children. We discovered that people who are booking these experiences want to know the differences between them. There’s a difference between a property that’s for all ages and on that’s for adults only. To cue that for the consumer or the meeting planner or travel agent we needed to have two separate brands to call out the differences. 

With Hyatt Zilara, it’s adults only and there’s an added air of sophistication. There will be more romantic dining options  … we wanted to create an atmosphere where you can live in the moment with the person with whom you traveled.

Hyatt Ziva will be more vibrant and capture the fun and excitement of a vacation. There will be more things happening like discovering things together and doing things as a group. Whether you’re part of an actual group or not there are opportunities for excitement and interacting and doing things together. How we bring that to life will be a little bit different from other all-inclusive resorts. 

Walker: Hyatt Ziva Los Cabos opened on Nov. 1 and it has more than 600 rooms and lots of meeting space. There’s a theater and some dedicated meeting space, but it also still feels like a resort. They have an in-house entertainment group and an on-site choreographer that can do all kinds of entertainment and work with planners to tailor the experience. They do a great job of customizing the whole experience for the group. They also have a great sales team and they do a lot of group business related to incentives and product launches. This property was a former Barceló hotel. 

We take over the Hyatt Zilara Cancun today [Nov. 15]. It’s the former Royal Cancun. That property has less meeting space but they still do some groups and it has more than 300 rooms.

The third one will be Hyatt Ziva Rose Hall in Jamaica, opening next year. It’s in the space of a former Ritz-Carlton and has meeting space as well. They do everything from weddings and family groups up to meetings and incentives as well. We’re even adding a whole new wing that will have some adult-only rooms and an additional restaurant complex that they’re building out, as well as renovating the existing hotel. We’re adding 120 more guest rooms. This property will be larger than Cancun but not as big as the Los Cabos property.

Walker: We see these types of properties as a platform for growth for Hyatt. We have a need for more resort product. We have a lot of business and meeting hotels and those same customers also want to stay with us on a vacation. Playa is purchasing more than just these three hotels. We have plenty to explore. We’d be willing to work with any number of owners and hotels to expand, whether in the Mediterranean or even Asia. 

There’s not a preponderance of all-inclusives all over the world. There are certain markets where it all works. Ski and beach resorts tend to be the two most popular. That’s kind of where it works. We’d be open to exploring a lot of those opportunities. We’re exploring that through the franchise relationship with Playa. We want to be flexible to grow through whatever business model would be best going forward.

Walker: On the ease front, the all-inclusive nature of it just makes the whole planning and setting up the group and billing so much easier. These types of properties are already doing a lot of incentive business. Why should planners choose us? The guest experience is something we hope to enhance. The other area that’s a huge opportunity is food and beverage (F&B). With any trip like that, you want to make sure the food is really good and you’re feeding a lot of people. 

Right now, the all-inclusive, as a segment, doesn’t do F&B particularly well well. Negative feedback for all-inclusives is often related to F&B. Hyatt has such a heritage of F&B and excellence in that space. We want to take a close look at that — especially for quality and presentation — and also for atmosphere and where you have the meals. How do you enhance the overall dining experience? That’s the one area that’s really important to planners. We also have some expertise on the dining side to help enhance the overall experience. That would be very relevant to planners. 

Walker: Hyatt made a conscious decision to say that each brand appeals to different types of customers and should deliver a different kind of experience. What do the guests need? We have to look at both aspects of that. How do we innovate that experience and make sure we focus on this specific customer? How do we understand their needs? How do we design the experience for them?

A meeting or incentive group at a Grand Hyatt, for instance, might have a different experience than they would at a Hyatt Regency. The Hyatt Grand will be bigger, bolder, and more dramatic. The Hyatt Regency will be a little bit more about connections and being practical.

Hyatt Ziva and Hyatt Zilara a will cater a lot more to groups. We have the experience elements that’ we’ve worked out on how they’ll be different. From the planner perspective, we’ll do all the great things we do at Hyatt, but they’ll se the customer experience. We still have some homework to do to dig in there and understand the all-inclusive experience more.