All-inclusive resorts will seek to widen their demographics, appealing to all incomes with more services
Los Angeles, CA (PRWEB) September 06, 2012
The All-Inclusive Vacation Resorts industry is dependent on tourism and aggregate consumption levels; therefore, it has struggled with declining revenue and profit as demand for travel accommodations fell due to the global recession. In the five years to 2012, industry revenue is expected to decline at an average annual rate of 1.4% to $133.5 million. Revenue was particularly hard-hit in 2009, as people became more concerned about their finances and cut back on luxuries. Nonetheless, the industry started to recover in 2010 as domestic and international travel rates improved due to a rise in per capita disposable income. In 2012, domestic and international travel increases are expected to benefit operators, causing revenue to grow 2.1%, according to IBISWorld industry analyst Andrea Alegria.
The All-Inclusive Vacation Resorts industry operates in a very niche segment of the hospitality sector and includes only about 34 resorts. Demand for all-inclusive hotels is weak across most US markets dominated by hotels and motels that operate under a business model where accommodations (and perhaps one meal) are the only items included in the price of the stay. High operational costs, compared to other countries where all-inclusive resorts are popular, also limits profit expansion for the industry since tourists are often looking for low prices. Price-based competition puts increasing downward pressure on room rates, and limits profit growth. Nonetheless, the industry has found growth opportunities in remote locations in rural areas. All-inclusive resorts that offer guests a ranch experience, for example, and provide visitors with outdoor activities like horseback riding, swimming and hiking, are gaining popularity.
IBISWorld projects that the industry will expand over the five years to 2017 as travel demand rises and operators seek to capitalize on the rebound of tourism spending by creating all-inclusive experiences in these remote settings. IBISWorld forecasts that revenue will increase over the five years to 2017. All-inclusive resorts will seek to widen their target demographic and expand service offerings to appeal to more sophisticated clients across all budget ranges. The number of resorts will grow as tourism spending spurs investment in new developments. Profit margins will also improve in response to increasing demand for travel accommodations and slightly higher room rates. The All-Inclusive Vacation Resorts industry exhibits a high level of concentration, with the top three players dominating the industry in 2012. While there are a multitude of hotels and motels in any given area of the country, there are a limited number of all-inclusive resorts. Furthermore, the income disparity between smaller all-inclusive resorts and the industry's largest resorts is significant. This disparity serves to increase the market share of the industry's largest players, leading to a high level of concentration. For more information, visit IBISWorld’s All-Inclusive Vacation Resorts in the US industry report page.
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IBISWorld industry Report Key Topics
The industry operates establishments where customers prepay a set rate for accommodations, food and some activities (and sometimes alcohol and transportation) at a vacation resort.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.