Why AMResorts Is Surging in the Caribbean

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There’s a company dominating the landscape of hotel development and management growth in the Caribbean, and it isn’t a really close competition. Apple Leisure Group’s AMResorts subsidiary has been on a stunning expansion push in the last several years, and it’s shown no signs of slowing down, with a total of 52 resorts in the Caribbean and Mexico and plans to open another 20 in the next few years. So what’s driving its growth? And what’s next? To learn more, Caribbean Journal talked to Javier Coll, executive vice president and chief strategy officer of Apple Leisure Group, during the CHRIS hotel investment summit in Miami.

How many properties has AMResorts opened in the past 24 months? What is the total number now? How can you maintain that pace?

There are 52 resorts now, and that’s a significant increase from 16 years ago when we opened our first property. We plan to open approximately 20 more newly constructed resorts in the next few years.  There will also be an increased number of new AMResorts properties that will come from rebranding of existing properties. By 2019, AMResorts will have over 65 resorts, representing more than 24,000 rooms throughout Mexico, the Caribbean and Central America. Apple Leisure Group (ALG), plans to reach 100 hotels both open and in the pipeline through its subsidiary, AMResorts, within the next 3 years.

Why would an investor want to work with Apple Leisure Group?

There are several reasons investors should choose Apple Leisure Group but one of the main reasons is our powerful distribution channels. ALG owns the largest tour operator in the U.S. and the largest leisure management company in Mexico and the Caribbean, two factors that create immense value for investors. In my opinion, this is more important for any investor, developer or hotel owner than any brand name, when it comes to the leisure segment and especially all-inclusive resorts. Additionally, the infrastructure of our four decades in the industry, the marketing support, management systems and many programs, like our Unlimited Vacation Club that helps owners increase their revenue, all make ALG’s offering that much more appealing.

Javier Coll.

The strength of our team is another factor. Our development team is comprised of industry and regional experts that understand investors’ needs, have the connections to work in-country to get deals done, and the market knowledge to know where to grow and when.

Another key factor is our attention to the customer experience from the moment they book until they arrive back home.  From transfers to offsite excursions everything is integrated, tested, supported and insured, and our investors can rest assured when putting the customer experience into the hands of ALG and its subsidiaries.

Talk about the KKR – KSL acquisition. How did that impact the company and what does it mean for the future?

We started as a family-run business, and in 2013 we made the decision to work with Bain Capital to accelerate our growth. The equity investment by Bain Capital allowed us to transition from a family-run business to a more corporate structure, and acquire Cheap Caribbean and Travel Impressions. With this travel industry infrastructure, we were able to grow at an even faster pace in addition to opening an unprecedented number of resorts under AMResorts.

Zoëtry Agua Punta Cana.

KKR and KSL Capital Partners are good partners for us as we enter our next phase of unprecedented growth. They know the travel industry well and that is a big asset. KKR and KSL share our commitment to the vision of Apple Leisure Group as we continue to deliver impressive results to travelers, guests and hotel owners.

What can destinations and governments do to encourage more tourism investment?

Have a more open and streamlined building approval process. Countries like the Dominican Republic have figured out how to create attractive destinations for hotel investment, making the approval process open, easy and certain. That’s not the case with many islands and this prevents these islands to keep growing but more importantly, to compete.

How does the Caribbean as a region compare globally this regard?

There are some places like Dominican Republic and Mexico and do this well.  There are many places that need to understand the opportunities and the impact of tourism. The cascade of economic benefits coming from tourism are countless, from new jobs, supplier and vendor development, workforce education, taxes, etc.

You have such a significant focus in Mexico. Why Is Mexico so important?

From a leisure market point of view, Mexico is number one. Mexico is like the perfect storm of tourism opportunity. Beautiful country abundant land, beaches, culture, gastronomy and an elevated level of natural personal service with a reasonable cost of labor and excellent attitude towards tourists. Mexico continues to hit that sweet spot for many U.S. travelers, thanks to the country’s proximity (e.g., short flight time) to the U.S.

What does the consumer want from an all-inclusive resort?  Is that changing?    

No so much changing as evolving. The biggest evolution is the choices now available to the traveling consumer. For example, in our case, we have six brands under AMResorts designed to meet the varying needs of travelers – for example, there is our very successful young lifestyle brand, Breathless Resorts & Spas, our high-end, boutique brand, Zoëtry Wellness and Spa Resorts, and our family-friendly and adults-only options. And then there have been innovations in F&B, activities and technology. Quality is not a factor anymore as it was in the past. There are all-inclusive resorts at the same level or even better than worldwide known brands offering the European plan. The benefit is that with all-inclusive resorts there is an additional level of convenience that can make your vacation very different in a positive way.

What’s your outlook for the next few years?

The Caribbean continues to be a region of interest for investors and tourists alike, and through Apple Leisure Group’s strong distribution channels, we will continue to be a major player in the region. The market is a cycle, and if it starts to pull back a little bit after years of growth, Apple Leisure Group will grow by rebranding underperforming hotels and reflagging them with our award-winning hotel brands through AMResorts. If the market stays as it is today, we’ll continue to expand with new construction. We have seen some pull back in the market so far in 2017, and we see this as an opportunity to tout our conversion offerings. Hotels owners, developers and investors understand that anticipating these cycles is critical to keep their investments as profitable, which is why we started to see heightened interest in conversions and rebranding existing properties.

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