Growing Hilton Playa alliance benefits both

PLAYA DEL CARMEN, Mexico — Hilton’s decision to expand its
alliance with Playa Hotels & Resorts is poised to give both players a leg
up in the fast-growing all-inclusive market.

The partners announced plans to renovate and reflag the
Royal Playa del Carmen in Mexico and Dreams La Romana in the Dominican Republic
under the Hilton banner last week, with Playa Resorts set to manage both
properties. (The Dreams La Romana is owned by Playa Resorts and is currently
managed by AMResorts, owner of the Dreams brand.) 

In addition, Hilton and Playa plan to convert up to eight
more all-inclusives throughout the Caribbean and Mexico by 2025. The pair are
already aligned at the all-inclusive Hilton Rose Hall Resort & Spa in
Jamaica.

Tyler Batory, vice president of travel, lodging and leisure
for financial-services firm Janney Montgomery Scott, said the extended
partnership holds major upside for both parties.

“Hilton benefits from more resort properties and
additional franchise fees, while Playa benefits from increased scale, more
attractive OTA contracts, additional direct business and incremental meetings
and incentive groups,” Batory said, adding that the move is also “a
positive for the Playa development pipeline.” 

The Royal Playa del Carmen and Dreams La Romana — which
will be renamed the Hilton Playa del Carmen and the Hilton La Romana later this
fall — will begin renovations of their guestrooms, restaurants, bars and
public spaces in November, with completion targeted for late 2019. 

The Hilton La Romana will split into two separate resorts,
offering both a 344-room all-inclusive, adults-only concept and a 412-room
all-inclusive, all-ages concept, while the 513-room Hilton Playa del Carmen
will continue to be an all-inclusive, adults-only property. Playa estimated the
total spending for both projects at around $50 million to $54 million. 

Mie Morgan, product development manager for Mexico, Costa
Rica and the Caribbean at Classic Vacations, said, “Just having the Hilton
name will make a big difference and will open more doors for both resorts.
People have apprehension when visiting countries they’re not used to, and having
a worldwide, renowned brand like Hilton helps ease those concerns.” 

Margie Hand, a travel adviser and Caribbean expert with
Andavo Travel, said Playa is also well positioned to benefit from the Hilton
Honors loyalty program, which has close to 80 million members. Both converted
properties will enable guests to earn and redeem Hilton Honors points.

“For guests, I think the big thing will be [the
ability] to redeem points or earn additional points,” Hand said. “I
think reward members will be attracted to these properties, and this gets
consumers to these properties that might not have even looked at them before.”

She added that she believes more luxury travelers will also
be drawn to all-inclusives as the segment continues to see more activity at the
high end.

Likewise, Playa is hoping its travel adviser partners will
be able to leverage the Hilton Honors program.

Playa executive vice president and chief marketing officer
Kevin Froemming said, “Travel agents have told me that they often don’t
have access to those customers who are interested in points offers. At Playa,
we have built our brand on the trade, so we’re looking to integrate point
collection so that travel agents always have the ability to service those
guests.

“We’re working on a solution with our agents so that
they have the ability, if a customer comes to them and they’re a Hilton Honors
member, to get those customers their full points.” 

The Hilton Playa del Carmen and the Hilton La Romana will
join Hilton’s existing all-inclusive portfolio of 11 properties. Playa Resorts
owns and/or manages 20 resorts across Mexico, Jamaica and the Dominican
Republic.

Meanwhile, Playa is in expansion mode with Hyatt, recently
detailing plans to open the Hyatt Zilara Cap Cana and Hyatt Ziva Cap Cana in
the Dominican Republic next year. The company’s other Hyatt-flagged properties
include the Hyatt Zilara Cancun, Hyatt Ziva Cancun, Hyatt Ziva Puerto Vallarta
and Hyatt Ziva Los Cabos in Mexico as well as the Hyatt Zilara Rose Hall and
Hyatt Ziva Rose Hall in Jamaica.

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