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CASE STUDY

All-Inclusive Resorts
There is nothing new about the concept of all-inclusive resorts; they have been with us for decades,
from the holiday camps in the UK to the ‘western dude ranchers’ of the USA. Club Med about
which there is a detailed case study elsewhere in this book pioneered the all-inclusive concept in
the Mediterranean as long ago as the 1950s.
However, in recent years we have seen a massive increase in the development of new all-inclusive
resorts, and the adaption of older traditional hotels into all-inclusive properties, notably in the
Mediterranean.
The growth of all-inclusive resorts has been stimulated by both demand and supply factors.
Firstly, there is the fact that tourists like the idea of paying one price and not having to worry about
what ‘extras’ they will have to pay, for that will inflate the total cost of their holiday. Secondly,
because all drinks, activities, and entertainment are included in most of the all-inclusive packages,
customers believe that they are receiving good value for money. Thirdly, with the growth of long-
haul travel to unfamiliar destinations, many tourists do not feel confident about travelling off site
to buy meals in countries, whose language they do not understand. Fourthly, on the supply side, in
many of the new long-haul developing country destinations, the infrastructure may be little devel-
oped, so that tourists who are willing to venture out of their hotel grounds may find very few restau-
rants or other products and services. Penultimately, many coastal destinations, where the main
appeal is the beach and sun, are in relatively poor developing countries. Often tourists fear – rightly
or wrongly – that if they leave their hotel grounds, they will be attacked and robbed because they
are richer than their hosts. Finally, in traditional Mediterranean destinations, many established hotels
have converted to the all-inclusive formula to help them differentiate their offer from that of their
competitors, and to satisfy the tour operators who want to exploit this growth market.
As we will see now, all-inclusive resorts come in many different forms and many different lev-
els in the market.
1. Sandals Sandals is an upscale operator who limits access to its resorts to ‘mixed sex couples
over 18’ only, so it discriminates against gay and lesbian couples and does not accommodate
families. The company operates four resorts, solely in the Caribbean, with five being located in
Jamaica.
Given the growing competition in the all-inclusive market, Sandals, one of the earliest
movers in the field, seeks to sell itself on the basis of the following strengths of its product:

Many hotels offer all-inclusive holidays, but it is important to look at what you are being
offered during your precious holiday time. Sandals provides unlimited premium brand
drinks with meals throughout the day and night. As well as sumptuous buffets, Sandals offers
a world-beating choice of gourmet restaurants, from oriental to Italian and French a la carte
dining with no hidden surcharges. Among an array of activities, watersports include sailing
and windsurfing, waterskiing (at most resorts), and even scuba diving, equipment and
instruction is all part of the service included.

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The list goes on and on … Sandals and Beaches Resorts, voted ‘The World’ Leading All-
Inclusive Company’ at the World Travel Awards 8 years in a row.
Source: Sandals/Kuoni brochure, 2002

The same brochure outlines what guests receive for their money at each resort, as shown
below, where ‘x’ means ‘yes’.

Sandals Grande St Lucian

Sandals Royal Caribbean

Sandals Royal Bahamian

Sandals Halcyon Beach

Sandals Royal Hicacos

Sandals Montego Bay

Sandals Dunn’s River

Sandals Ocho Rios

Sandale St Lucia

Sandals Antigua
Sandals Negril
Accommodation
Total rooms and suites 193 280 327 170 405 190 245 237 250 223 404
Concierge service in selected room categories x x x x x x x x x x x
Swimming pools
Main freshwater pools 5 4 3 2 3 4 4 3 2 2 3
Whirlpools 5 4 4 3 6 5 4 2 3 2 4
Food and drink
All meals and 24-hour food service x x x x x x x x x x x
Unlimited premium brand drinks x x x x x x x x x x x
Gourmet speciality restaurants 4 5 6 3 8 4 5 4 4 4 4
Swim-up pool bars 1 1 2 2 3 2 1 1 2 1 1
Full room service (in selected rooms) x x x x x x x x
Dine at neighbouring Sandals or Beaches resorts x x x x x x x x
Entertainment
Daily organized activities including pool games x x x x x x x x x x x
Discotheque/nightclub x x x x x x x x x x x
Nightly entertainment x x x x x x x x x x x
Indoor activities
Fitness centre, sauna, and/or steam baths x x x x x x x x x x x
Spa facilities (treatments payable locally) x x x b x c x x x
Beauty salon (treatments payable locally) x x x x x x x x x x x
Indoor games x x x x x x x x x x x
Pool/billard tables x x x x x x x x x x x
Watersports
Scuba diving (for guests aged 12 and over) and snorkelling x x x x x x x x x x x
Sailing, windsurfing, Hobie Cats x x x x x x x x x x x
Canoes, kayaks, and/or paddle boats x x x x x x x x x x x
Waterskiing x x x x x x c x x x
Landsports
Tennis courts (including floodlit]) plus equipment 2 2 5 2 2 3 4 2 4 4 3
Golf b x b d d a
Table tennis, volleyball, shuffleboard, croquet, and horseshoes x x x x x x x x x x x
Basketball x x x x x x x x x x
Lawn chess x x x x x x x x x x x

Source: Sandals/Kuoni brochure, 2002

The letters a, b, c, and d reflect more detailed comments, which space does not permit us to reproduce here.

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And the prices are not low, for Sandals is aimed at an upper-scale clientele. In Summer 2003,
prices for adults for vacations to Sandals resorts, offered by Kuoni, from the UK, ranged from
£967 in Cuba and £1225 in Jamaica to £4151 for a 7-night all-inclusive vacation, to the most
expensive resort.
Sandals has also developed a successful area of business and weddings where guests are
offered a free wedding and the chance to spend at leave 5 nights at a resort.
In response to customer demand, Sandals has launched ‘Beaches’, an all-inclusive resort
given to singles, couples, friends, and families Sandals itself has traditionally avoided markets.
2. Hedonism III, Jamaica Following on from the success of Hedonism II, we now have
Hedonism III, an all-inclusive resort, devoted to hedonistic pleasures. The following extracts
from its web site give a good indication of the resort’s main features:

Hedonism III Tucked away on Jamaica’s sultry North Coast, Hedonism III enters the mil-
lennium with everything that made Hedonism II the world’s most notorious resort and more!
You will find swim-up rooms. A Roman tub in every room. And a see-through slide that
snakes through the disco. At Hedonism III, you will find that famous uninhibited spirit where
just about anything goes. For couples and singles 18 years and over. Set on 15 acres of beauti-
fully landscaped gardens on the eastern end of Runaway Bay, Hedonism III features expan-
sive ocean views and offers total escape for a truly active (and slightly wicked) vacation.
Hedonism III is 42 miles or approximately 1 hour and 20 minutes from the Montego Bay
Airport.
The apple does not fall far from the tree – good news for Hedonists around the world, as
the newest hedonism resort, Hedonism III takes the pleasure principle to new extremes.
Quaint, Victorian architecture, and soft pastels conceal a sinister soul, like a black teddy
under a housecoat.
A few days here are more than enough to make up for a lifetime of ordinary vacations.
Of course, when things like a water slide through the disco and a pool table actually in the
pool start to seem ‘normal’, well it may just be time to go home. So, do whatever you want,
whenever you want. We suggest you try everything once, and the really bad things as fre-
quently as you can. But there is more to Hedonism III than a wet and wild non-stop party.
Like award winning cuisine at a variety of unique restaurants, free flowing liquor at bars
never close.
An endless array of land and watersports. Live entertainment and plenty of shaded
hammocks where you can recover from too much of the above. This wicket sister of legendary
Hedonism II is a spectacular launching pad for a new millennium of decadence. And it is
alive and thriving on Jamaica’s sultry north coast. Hedonism III. Is the world ready? Two
beaches, one Au Natural. Three Jacuzzis, one Au Natural and the world’s only see-through
Jacuzzi.

Weekly theme parties

Night Themes Dress code

Tuesday Battle of the Sexes PJ Party Silks and satin, leather and lace, anything
naughty (sleepware mandatory for entrance in
disco up to 1.00 a.m.)
Wednesday Blast from the Past Oldies Party 1970s Minis and Bell Bottoms
Thursday Talent and Toga Teaser Togas are required (sheets will be provided) for
entrance into the tropical terrace for the Toga Parade
Source: Company web site.

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Hedonism III is a reflection of the current growth of hedonistic tourism, among most age
groups.
3. Karmina Palace All Suites Resort, Mexico The all-inclusive resorts in Mexico are
focused largely on the American market. This property has 324 bedrooms and offers a fully
inclusive package which includes the following:

● Room, accommodation, tax, and gratuities

● 24-hour room service
● All meals
● Concierge for tee-time reservations
● Daytime activities programme
● Fitness centre use
● Kids’ club
● Nightly live music
● Nightly shows
● Non-motorized watersports
● Theme nights with buffet
● Unlimited drinks
● Wedding co-ordination
Source: Expedia, 2003

The resort offers suites varying in size between 990 and 3019 square feet (the use of feet not
metres is further evidence of the focus on the US market).
Interestingly, the description of its services, emphasizes the availability of non-smoking
rooms and children’s facilities.
4. Iberostar Punta, Dominican Republic This resort is owned by a Spanish chain, showing
that the all-inclusive concept does not just appeal to the English-speaking market in the
Caribbean. This unit is aimed at a family market with a children’s club and a jungle walk/mini
zoo for children. Accommodation only prices in 2003 varied between US $512 and $700 per
adult, per week.
5. Voyager Beach Resort, Kenya This is a 230-bedroom property on the Kenyan coast, near
Mombassa. Its all-inclusive package includes meals, entertainment, and sport facilities. It
also offers unusual activities, such as glass-bottom boat trips. However, with companies like
Sandals, the alcoholic drinks included in the package are not premium brands but are locally
produced. Furthermore, the all-inclusive concept is only available between 10.00 and midnight.
6. Les Pavillons, Mauritius Like a number of resorts, Les Pavillons offers both halfboard
and all-inclusive concepts. The price differential between the two varied between £135 per
adult per week to £147 in 2003. The extra money brought guests the following benefits:

● All meals, breakfast, lunch, dinner, and snacks.

● All drinks, local beer and spirit, soft drinks, house win by the glass, and tea and coffee.
● Watersports as detailed in hotel description.
● All taxes and tips (excluding overseas airport departure tax).
Source: Kuoni brochure, 2003

7. Hotel Fortina Spa Resort, Malta A four-star seafront hotel in Sliema, Malta, that has
changed to the all-inclusive format and has also added a spa centre to further differentiate

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itself from other hotels in the area. In 2003, a week’s all-inclusive stay at the hotel cost between
£270 and £406 per person.
8. Hotel Santa Susanna Club, Costa Brava, Spain This is a mid-range property aimed at a fam-
ily clientele. Its low prices reflect the fact that the hotel offers fewer sports facilities than many
other all-inclusive resorts. There are also restrictions, such as snacks are available only from
10.30 to 12.30 and 15.00 to 18.30, and children’s soft drinks and ice cream are not available
until 11.00 hours.
These few examples show the diversity of the all-inclusive resort complex around the world, but
also some of its similarities. Let us now look at how tour operators market the all-inclusive resort
products.

Tour operators’ all-inclusive programmes

Tour operators have quickly seized on the rising popularity of all-inclusive resort vacations and
have developed their own all-inclusive holiday packages. In the UK market, for example, some
tour operators have developed whole brochures devoted to all-inclusive hotels, such as Cosmos. In
2003, the company stated in this brochure that the all-inclusive holiday package was as follows:

Under every accommodation description in the ‘All-Inclusive’ means, section we have listed the
All-Inclusive facilities included in your holiday price.
You can normally expect the following:
● Buffet-style breakfast, lunch, and evening meal.
● Snacks and/or ice cream throughout the day.
● Unlimited locally produced alcoholic drinks and soft drinks.
● A regular variety of daytime and evening entertainment.
● Sports and activities, such as tennis, volleyball, and aerobics.
● Watersports including sailing, windsurfing, and pedalos (availability subject to season).
● Pool sports as appropriate to each hotel, such as water polo and water aerobics.
Naturally, activities and facilities vary from hotel to hotel; so, to be certain that you select the
right holiday for your needs, be sure to check individual accommodation descriptions.
Note: All-Inclusive guests are normally required to wear or carry identification to ensure they
receive the All-Inclusive benefits. This is provided by the hotel and consists of an identity bracelet
or ID card.
Source: Cosmos All-Inclusive brochure, 2003

Meanwhile, other tour operators mix all inclusive with other formats in the same brochure. For
instance, Thomson/Touristik Union International (TUI) offered three different forms of all-inclusive
products in its main 2003 Summer Sun brochure, as follows:
● Sandals and Beaches resorts.
● Thomson All Inclusive.
● Thomson All-Inclusive Select.
As the all-inclusive market has grown, more and more travel agents and travel web sites have
become involved in selling such tour operator packages, often at heavily discounted prices.

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For example, in February 2003, the ‘Holiday Warehouse’ web site was offering the following all-
inclusive packages, inclusive of flights:
● 14 nights in four-star hotel in the Dominican Republic in May and June from £889.
● 14 nights in a three-star hotel in Kenya in March and April from £864.
● 14 nights in a three-star Mexican resort hotel from £769.

Key issues
● The all-inclusive resort concept is more than 50 years old, but it has grown very rapidly in popular-
ity in recent years.
● In certain destinations, such as the Caribbean, all-inclusive resorts are almost the norm while in
other regions, such as South-East Asian, they are relatively rare.
● All-inclusive resorts exist at many different levels in the market from medium to very expensive.
● Even within the Mediterranean region, some countries, such as Turkey and Tunisia, have a lot of all-
inclusive properties while there are relatively few in countries like Greece and Portugal.
● All-inclusive resorts have grown up particularly in relatively new destinations with limited non-hotel-
based infrastructure, and where tourists may perceive there to be security risks for themselves.
● Many people believe that self-contained, all-inclusive resorts may grow more in popularity if terror-
ist attacks increase in frequency. Others think however that such resorts may well become targets for
such attacks.
● All-inclusive complexes are criticized on a number of fronts in terms of their social, economic, and
environmental impacts. Socially, they are accused of creating ghettos, which segregate tourists and
locals, and do not encourage the mixing of the two. Economically, it is argued that while lucrative for
the hoteliers themselves, they generate little spin-off expenditure on meals, drinks, and shopping, out-
side the resort complex, thus minimizing the opportunities for local small-scale entrepreneurs to make
a living. Finally, in terms of the environment, such complexes are often on a very large scale and as
well as harming the visual amenity of sites, they often use valuable water and damage wildlife habi-
tat. Due to these negative impacts, some developing countries’ governments oppose such complexes.
Indeed, in 1999, the development of new all-inclusive resorts in the Gambia were banned, although
the policy has since been relaxed.
● In the Mediterranean, especially, many all-inclusive resorts are simply hotels that have adopted this for-
mat. In many cases, they have done so under pressure from foreign tour operators who dominate their
market.They may, therefore, be unwilling and unenthusiastic, and offer a less than first class service.
● In the lower/middle market, as opposed to the upmarket operators, such as Sandals, the all-inclusive
concept gives the hotelier a captive market and may, therefore, reduce the motivation to strive for ever
greater quality.
● Tourists are often dissatisfied with aspects of these mid/lower-range all-inclusive resorts in terms of
food quality, alcoholic drinks quality, and the restrictions that are often placed on alcohol consumption,
for instance. After all, there is no universally accepted definition of what ‘all-inclusive’ actually means.
● There are clearly different types of all-inclusive resorts for adults only and hedonistic resorts to
family-oriented ones.
● All-inclusive resorts may appeal to the same motives as cruises for instance, given that both are sold
on the basis of pay one price and everything is included.
● It is interesting that all-inclusive resorts are growing at the same time as we see growth at the oppo-
site extreme, such as room only in hotels and self-catering accommodation. Clearly, there are differ-
ent segments and market trends driving both developments.
● All-inclusive resorts may be a permanent feature in destinations or they may prove to be a transitionary
phase which new destinations go through until their local infrastructure has developed to the point
where it is on a par with the quality of the all-inclusive hotel.Tourists may then reject the all-inclusive
complexes to enjoy the diversity of the local area. Alternatively, as tourism develops in a place, the resent-
ment of the tourist by the locals, and fears of terrorist attacks may encourage even more tourists to
seek the cocoon-like atmosphere of the all-inclusive resort.

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Conclusion
While not new, all-inclusive resorts have been proving more and more popular in recent years,
possible in newer long-haul destinations with limited tourist infrastructure. They clearly appeal to
a large number of tourists but they also face criticism about their negative impact on the host com-
munity and local environment. It remains to be seen if they will grow or decline in the future, or if they
can evolve in ways that make them more compatible with the principles of sustainable tourism.

Discussion points and exercises

1. Critically evaluate the impact of all-inclusive resort complexes on the destination’s economy,
society, and environment.
2. Compare and contrast Club Med, Sandals, and Hedonism III in terms of their product, market,
and main selling points.
3. Discuss the factors that will influence the future development of the all-inclusive resort market.
4. Devise a new concept for an all-inclusive resort complex in a location of your choice. You should
produce a report for your concept which covers the following:
– core concept,
– main elements of the product,
– the size of the property,
– target market(s),
– pricing policy,
– site requirements,
– preferred location.

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