Playa’s Fernando Mulet on the Future of All-Inclusive Hotels
By Joe Pike, Special Contributor
Sine the coronavirus (COVID-19) pandemic halted Caribbean travel in March, new hotel regulations have been put in place that fans of all-inclusive resorts might have to take some time adjust to.
But aside from adapting to a new norm, Fernando Mulet, executive vice president and chief development officer at Playa Hotels & Resorts, said he expects both vacationers and hotel investors to have a heavy interest in the all-inclusive product both during and after the pandemic.
In an exclusive interview with Caribbean Journal Invest, Mulet shared his opinions on the current state of the all-inclusive market, as well as some details about new safety precautions being implemented at Playa Hotels & Resorts.
Here’s what he said to say.
How is the ongoing COVID-19 pandemic changing the all-inclusive landscape both from a development and operational perspective?
The whole hospitality industry is changing fast to ensure the safety of our guests and resort team members. We are focused on improving our operations so that we are the destination of choice for travelers in our markets.
In response to COVID-19, Playa has developed “Playa Safe Stay” with the help of trusted global hospitality brands and key sectors of the travel industry to create a safe and fun vacation environment for guests.
For instance, we have reimagined the buffet experience, keeping an almost endless selection of culinary delights while ensuring safe social distancing, allowing no direct access (self-serve) to utensils, flatware, and the culinary choices.
The result is a much higher level of service and satisfaction as guests make their selection from almost endless options while our associates serve and/or prepare the cuisine and instantly deliver to the guest’s table.
Additionally, contactless check-in and check-out are available at several of our resorts. We have replaced paper menus, newsletters and the like with digital versions.
We are excited to have debuted a pocket concierge, a mobile/online solution that features on-property amenities, schedule of events, important information, reservations for various offerings, like dining venues, spa, etc., and a QR Code solution for important information.
From a development perspective, our industry is changing, and we are proud to be part of this transformation. The future of our industry will be marked by the presence of new skilled players/operators, technological distribution channels with a worldwide reach, and strong global brand presence.
We have taken important steps to be the best long-term partner for owners and investors by offering the path to successfully implement differentiated all-inclusive resort concepts managed under U.S. global brands.
What’s the future for all-inclusive hotels?
We are seeing tremendous interest from owners and investors in our all-inclusive business model and we expect more properties to be converted as owners look to differentiate from competitors, lower distribution costs and capture a rate premium for their assets.
The whole world is going through an unprecedented time, and the all-inclusive segment, just like the entire hotel sector, is doing its best to anticipate and adapt to better serve its customers.
For us at Playa, we believe there will be increased demand for an all-inclusive experience and resort options that are more spread out, and we believe that we are positioned quite well because of the great value proposition of our business model and the expansive beaches, and pools and large open spaces that our resorts offer.
[As mentioned], we recently launched our “Playa Safe Stay” promise and continue working with our global brand partners on industry-leading safety protocols that separate us from the competition.
We are confident that people are going to be willing to pay up for quality, and quality includes safety, and the confidence that they can go to one of our resorts, have an outstanding time and return home safely.
We’ve seen more and more entrants into the all-inclusive market as of late, including Marriott International. What is attracting them?
We are not surprised at Marriott’s interest in the all-inclusive market, given the growth potential that exists in this segment.
From a macro standpoint, we see Marriott’s move as a natural progression from a global brand responding to consumers’ growing desire for all-inclusive vacations.
Playa was the pioneer in developing and managing all-inclusive resorts under U.S. global brands first through our partnership with Hyatt back in 2013 and then followed by our alliance with Hilton in 2018.
Playa currently manages eight resorts (3,250 rooms) under the Hyatt Ziva and Hyatt Zilara brands and four resorts (around 1,800 rooms) under the Hilton all-inclusive brand.
We have spent the last seven years executing our strategy and investors have noticed the success we have had in differentiating our product offering and implementing a direct-to-costumer sales and marketing strategy.
We expect branded all-inclusive properties to become the “new normal,” as the brands try to position themselves to capture the shift in consumer preferences for all-inclusive resorts.
Playa recently sold two of its resorts in Jamaica, Jewel Dunn’s River Beach Resort & Spa in Ocho Rios and the Jewel Runaway Bay Beach Resort and Waterpark in St. Ann. Can you tell us why those transactions were made?
The transaction [in Jamaica] increased Playa’s liquidity at a superb cost of capital for our shareholders and the proceeds from the sale of these two non-core assets will be utilized for general business purposes.
It also showed Playa’s capability of executing a significant transaction during such extraordinary times.
We remain committed and actively looking for ways to grow in Jamaica where we still own and manage more than 1,450 rooms under the Hyatt Ziva/Hyatt Zilara, Hilton and Jewel [Resorts] brands.
What’s in the pipeline for Playa?
We are continuously evaluating opportunities for conversions and new developments.
We had just finished repositioning three brand new Hilton resorts in December 2019, one in Playa del Carmen, Mexico and two in La Romana, Dominican Republic with more than 1,200 rooms as well as opened our new generation Hyatt Ziva and Hyatt Zilara resorts in Cap Cana, Dominican Republic with 750 rooms.
We are excited to reopen all of these properties and welcome guests in these stunning new resorts following COVID-19 related closures.