In August Marriott announced that they’re launching an all-inclusive platform.
Marriott’s All-Inclusive Plans Up Until Now
Marriott sees a lot of growth with all-inclusives, and it’s an area where they’ve historically had very little market share.
To kick off their strategy, Marriott announced that they had signed management contracts with developers who plan to build five all-inclusive resorts between 2022 and 2025, at the cost of over $800 million. This includes over 2,000 hotel rooms in the Caribbean and Latin America.
In Punta Cana, Dominican Republic, Marriott plans on opening the following resort:
- A 650-room Autograph Collection property, expected to open in 2022
In Riviera Nayarit, Mexico, Marriott plans on opening four resorts:
- A 240-room Ritz-Carlton property, expected to open in 2023
- A 400-room Westin property, expected to open in 2023
- A 300-room Autograph Collection property, expected to open in 2025
- A 500-room Marriott property, expected to open in 2025
While those are some potentially cool developments, they’re still several years off. I figured all along Marriott was hoping to have some all-inclusive resorts before that, and that the initial announcement was a way for them to signal to investors and hotel operators that they’re open for business, so to speak.
Well, the next plan for Marriott’s all-inclusive platform has just been announced.
Marriott Acquires Elegant Hotels Group
It has been announced today that Marriott will acquire Elegant Hotels Group in an all cash deal. The offer price implies an enterprise value of approximately 199 million USD — this is between Marriott’s 130 million USD purchase price, plus the roughly 69 million USD in debt that the company has, which Marriott will acquire.
Marriott isn’t just taking over a management company here, but rather Elegant owns these resorts. Elegant owns and operates seven hotels with 588 rooms in Barbados. Six of the seven properties are along the West Coast of Barbados, and a majority of the properties are operated as all-inclusive resorts.
Marriott plans to carry out full renovations of these resorts. Upon completion of those renovations, Marriott plans on operating all Elegant hotels as all-inclusive resorts under one or more of Marriott’s existing brands.
Furthermore, given Marriott’s asset-light strategy, Marriott intends to market the hotels for sale over time, with long-term management agreements so that Marriott can manage the properties.
As Marriott CEO Arne Sorenson describes this purchase:
“There is a strong and growing consumer demand for premium and luxury properties in the all-inclusive category. The addition of the Elegant portfolio will help us further jumpstart our expansion in the all-inclusive space, while providing more choices on the breathtaking island of Barbados for our 133 million Marriott Bonvoy members.”
Elegant Chairman Simon Sherwood says:
“The Board of Elegant Hotels is confident in the Group’s long-term prospects but believes that this offer represents compelling value for our shareholders and a great opportunity for our employees to be part of one of the world’s leading hotel companies. The fact that Elegant Hotels has attracted the interest of a company of Marriott’s caliber is a resounding endorsement of the outstanding quality of our properties, operations and people, and indeed of Barbados as a highly desirable destination. We are therefore unanimously recommending the offer to shareholders.”
This is an interesting move on Marriott’s part, especially given that they have an incredibly asset-light strategy. So they’re buying seven resorts in Barbados, renovating and rebranding them, and then they hope to manage them long term while selling the hotels to investors.
I don’t know much about Barbados or Elegant properties, but they don’t look particularly luxurious. It’ll be interesting to see if Marriott plans on turning any of these intro true luxury properties, or if we should expect them all to be mid-range.
What do you make of Marriott’s Barbados investment?
Marriott is a well regarded and respected international brand and it would do well to continue to market the Elegant hotels to the existing UK B&B clients. It is a loyal and affluent customer base which enjoys good access to Barbados via Gatwick and Heathrow airports. The island also understands and appreciates this market’s contribution to the island’s shops, restaurants and the supporting tourist industry. Officials recently denied Sandals plans to build an all-inclusive site...
Marriott is a well regarded and respected international brand and it would do well to continue to market the Elegant hotels to the existing UK B&B clients. It is a loyal and affluent customer base which enjoys good access to Barbados via Gatwick and Heathrow airports. The island also understands and appreciates this market’s contribution to the island’s shops, restaurants and the supporting tourist industry. Officials recently denied Sandals plans to build an all-inclusive site in recognition of the negative impact all-inclusive offerings can have an The island’s economy. Marriott can certainly add shareholder value by providing a luxury offering to a discerning Uk but not through the all-inclusive model.
Barbados is mainly 80% UK travellers with the other 20% made up from Canada US and other European countries . Many UK visitors support the local economy and like to eat and drink out in the local bars and restaurants. It will be a shame if the hotels acquired by Marriott are turned into all inclusive .The Colony Club which is a particular favourite with UK guests with a 80% return rate in my opinion...
Barbados is mainly 80% UK travellers with the other 20% made up from Canada US and other European countries . Many UK visitors support the local economy and like to eat and drink out in the local bars and restaurants. It will be a shame if the hotels acquired by Marriott are turned into all inclusive .The Colony Club which is a particular favourite with UK guests with a 80% return rate in my opinion should stay as non inclusive along with The House both along the West coast.
Not all that long ago, AA flew 2x757s a day from MIA and there were many European carriers there. BH, LH, AB, VS. Marriott in Barbados had just a single small Courtyard. I'd mostly stay at either the Hilton or even better the Radisson (yes it was better than the Hilton IMHO). Courtyard was in a good area, but not close to the coast. Radisson and Hilton both close to each other and both with private beaches. Marriott needs more properties in Barbados.
Does Coconut Airways still fly to Bridgetown? Far away from London Town and the rain? ( probably have to be old to ‘get’ the reference though).
For those of us from the UK, Australia and New Zealand, Barbados is by far the preferred Caribbean destination.
We are bound together by the sport of cricket, and it is one West Indian place which is wealthy, advanced and modern without being a tax haven.
For us it is heaven on earth.
That’s why Barbados was the world’s only scheduled Concorde destination apart from JFK!
Barbados was almost an 11th province of Canada back in the 70's.
I spent 19 Christmas vacations there with my family. Direct charter flights were available from Toronto, Calgary/Edmonton and Vancouver on Wardair before Air Canada killed them. Then by PWA for a brief period.
Miss the direct flights (10 hrs from YVR) so getting there is more of a hassle but hopefully will return soon.
@ Edw3rd - Sam’s Lord Castle burned to the ground years ago. Wyndham is rebuilding but has run into significant issues with the Barbadian govt & has suffered numerous delays. Gonna be very nice though once completed (2020?), & I will be happy to drain my Wyndham Rewards on a suite. Flights to BGI aren’t more difficult than most of the Caribbean - 3+ daily thru Miami or Charlotte. Maybe you are thinking of access...
@ Edw3rd - Sam’s Lord Castle burned to the ground years ago. Wyndham is rebuilding but has run into significant issues with the Barbadian govt & has suffered numerous delays. Gonna be very nice though once completed (2020?), & I will be happy to drain my Wyndham Rewards on a suite. Flights to BGI aren’t more difficult than most of the Caribbean - 3+ daily thru Miami or Charlotte. Maybe you are thinking of access to/from St Barts which can indeed be expensive, limited, & tricky.
The west coast of Barbados has especially gorgeous beaches, resorts, & the most expensive golf course in the world (Tiger was married at Sandy Lane). There is a Nikki Beach Club outpost (of Miami fame). The Fairmont is also there & is a great use of Accor points/status for a beachfront villa. The AIs Marriott is buying are certainly not of that caliber of property but Daphnes especially is very appealing. Rihanna likes to dine at their restaurant when on-island.
On the east side close to the airport is an excellent use of Hilton points. The Crane was the first Caribbean resort built. Half is still purchase, but HGV is gradually buying up the other half in chunks. Not the great beaches/retail of the west/Platinum side but beautiful and very nice rooms. Sam Lord’s is under construction just down from it.
Wow! The lovely Treasure Beach just placed 12th in the Caribbean and Central America in the Hotel category of Conde Nast Traveler Readers' Choice Awards.
I sure hope Marriott doesn't ruin this little gem!
Me and my wife stayed in Barbados earlier this year at an all inclusive resort. The rooms were less than luxurious, however, everything else was outstanding. Even had Green Monkey visits everyday. The island itself is a slum with way over priced Golf.
I don’t understand how a brand like Ritz-Carlton could be an all-inclusive resort in Mexico. Marriott should flag all of its all-inclusive resorts as Delta. Regardless, Marriott already has some optional all-inclusive properties as well as some properties that bundle meals in rates.
@MT - If that's what you're looking for, may I suggest Jade Mountain in St. Lucia. Spent a week here in 2012 for my honeymoon. Adults only, personal butler, gourmet meals. Usually rated the #1 resort in the Caribbean.
@MT - That may have been the case for many years but not anymore. Grand Velas in Los Cabos is an example of luxury all inclusive being one of the best resorts I've been to, with service levels that rivals the best of best out there. Of course, it doesn't come at a cheap price either.
I don't think all-inclusive and luxurious go together.
I think one of these places was a prize on Wheel of Fortune the other night...
Barbados used to be great. And, at one time, Marriott managed a wonderful property called Sam Lord's Castle - it's now a Wyndham property. The issue for any Marriott members is how difficult it is to get to BGI. In fact, flight access is both expensive and terrible. If these all-inclusive properties stay consistent with their Caribbean peers, I wouldn't put this on the Wanna-Go list for a few years.