Realising Potential: All-inclusives

From seven options as to type of holiday, which one would you think would be rated as having most potential in 2012? The magnificent seven are: all-inclusive, singles holidays, adults-only hotels, city breaks, gastronomy/environmental tourism, wellness, sports tourism. Give up? Well, if you are a bar or restaurant owner, you may already have done. The answer is the first: all-inclusive (AI).

Deloitte, in association with "Hosteltur", has conducted its annual survey of Spanish travel agencies, the headliner of which has to do with potential. Rated from very little potential to much potential, AI has so much more potential than the other six that it outstrips the nearest contender in the much potential bracket by a clear 25%.

As those being surveyed are Spanish travel agencies, the clientele to whom they assign all this potential is also Spanish. The finding regarding AI, while hardly that surprising in terms of its attractiveness, is unwelcome news for the complementary offer that has been less affected by a Spanish demand for AI than that from other markets.

A shift in terms of AI's increased potential for the domestic market is easily explained, as the advantage of a set budget that comes with an AI package is as appealing to a Spanish family hammered by recession as it is to a British family (or a German one).

Along with the British and German markets, the domestic tourism market ranks in the top three most important markets for Mallorca. Until now, it has, unlike the other two, been less inclined to go down the AI route. Economics have, however, brought about a change. As far as spend by Spanish tourists in 2012 is concerned, the survey reckons that 94% of the market will seek to spend the same or less. In other words, it is looking for the best value for money. One can argue whether AI always represents this, but for many consumers, it does.

The survey does not signal great news for businesses outside the confines of a hotel complex, and it also doesn't signal particularly great news for the type of niche holiday offer of which Mallorca has had such high hopes for so long. Compared with the 38% much potential of the AI, gastronomy/environment and sports tourism are rated as having only 4% high potential. Indeed, when it comes to sports tourism, the survey suggested that it has little or very little potential.

This finding will come as a blow to resorts where investment is being targeted towards sports tourism; Alcúdia for example, where both the "estación náutica" concept and the "bienestar activo" (active well-being) plan are intended to both raise the reputation of the resort and eat into the negative effect of seasonality.

A survey is of course only a survey, and this is a survey of only one market and one conducted with a population that isn't totally neutral. Like some travel agencies in the UK form part of integrated businesses with airlines and tour operators, so also are some Spanish travel agencies similarly allied. Nevertheless, travel agencies offer as good a barometer as any other part of the tourism industry in indicating where trends are heading. And if the trends of potential are mirrored in other national markets, it is clear enough where they are indeed heading.

What stands out from this survey is that for all that niche attractions, such as sport or gastronomy, are given such prominence, it is the traditional holiday which still holds by far the greatest appeal (and potential for sales by travel agencies). What has changed is that the type of board that is offered is less traditional, i.e. it is all-inclusive.

It is possible to conclude that the holidaymaker, especially at a time when money is tight, goes for the safe option, which means foregoing a holiday that is less traditional. If so, however, and certainly in the short term, investment of the type that hotels are making in wellness facilities (spas, etc.) does not necessarily appear to chime with what the market wants; the survey rates wellness as only having some potential.

But wealthier markets, such as the Russian market, would probably have a different perception of potential or consumer want. Consequently, the investment in spas would be good business as they would facilitate an upgrading of star rating. The four and five-star hotel is increasingly the future for Mallorca, so long, however, as they hold much potential. And for the Russians, far more than the Spanish, this also means all-inclusive.

Nothing will stop the increase in all-inclusive. Nothing. Other than a change in tourist attitude. And this is not going to change.


Any comments to andrew@thealcudiaguide.com please.