The Power of All-Inclusive Hospitality - Sabrina Cendral

Josiah: All-inclusive hospitality is very, very interesting to me. And I think, as a guest, there is something that feels very free and hospitable in the sense of having everything covered. And it allows guests to explore and experience more when you're not nickel and diming everything. And it's like, this activity is this extra amount of money. And I get why many companies have to charge more per activity. Something about just including things makes you feel free and easy. And I don't know if that resonates with you, but it seems there's so much power in all-inclusive hospitality. I'd like to see more of it.

Sabrina: I love that. I mean, you look at Club Med's latest campaign, which is called L'Esprit Libre, which means, you know, freedom of mind and spirit. And that is the DNA of the entire sector. It's very liberating not to worry about pulling out your wallet and everything you want to consume or enjoy, but it's more than that. And I've seen it, we've seen it in the sector, even more so in the current inflationary context. And I think that's also why the all-inclusive, you know, segment is booming right now. It is because of that inflationary context and because people just really want to have control over their spending, and all-inclusive allows for that. But I think even, you know, taking it a step further and going back to the experience, it also allows, it gives more space and opportunity for that transformative experience, trying out new sports, right, back to, back to, you know, discovering new skills and new passions. You wouldn't do that as much if you had to pay to get on the flying trapeze and not be sure you'll even dare jump off that board, right? But if it's all included, hey, why not? I'll try. I think that is central to how powerful this all-inclusive experience is in providing a very transformative experience.

Josiah: So it seems incredible as a guest. I would love to hear your thoughts, though, on whether this is an interesting business. Because it feels like, as a guest, I feel free. I'm trying new things. Is it an interesting business as well?

Sabrina: Yes, and I think we're seeing many traditional hotel brands and groups, conglomerates going into all-inclusive right now, so there's something there that's attracting them. I think one thing that these big brands are saying, you know, Marriott, Hyatt, they're setting up strategic partnerships and making acquisitions into the all-inclusive segment. Of course, they're saying that their loyalty program members are looking for that kind of experience to burn their points, right? You rack up a credit of points with your business travel, and then you want to spend it with your family or with your better half on some leisure travel and preferably that a type of travel that your points can cover entirely versus just covering the room and the accommodation and then you having to pay for the rest. I think something very interesting is happening there. From a business model perspective, operating all-inclusive products takes a lot of expertise. It's nothing like operating a European plan at a traditional hotel. It takes a lot of expertise, especially in the areas of F&B. Those buffets, you know, the F&B experience is very complex to deliver on a non-inclusive basis.

Josiah: Why is that? Can you tell me a little bit more about the complexity or what skills or capabilities are important in this?

Sabrina: Absolutely. Everything around menu planning for the buffets and quantity management. There's a perception of food waste, and the food waste is actually very, very minor because everything comes out unprepared from the kitchens and goes into these cooking stations that are cooked and prepared individually. as it goes along for each guest. So, the whole life cycle and making sure that the food waste is limited and managed is a very important one. And then display, hygiene, safety, all of these aspects are essential. The other areas that require, I would say, a lot of expertise and history to know how to operate everything around families. So, the very strong expertise of Club Med and everything around kids' clubs and how to cater to families are huge assets. Not a lot of brands have gone there fully yet, and I think there's a phenomenal opportunity to cater to families and multi-gen families in a very expert way like Club Med does. And the last thing, the last element I would add to that is everything around sports activities because in a regular resort, and even some of the all-inclusive resorts, you would go, say you go to tennis, they would say, okay, here's the court and here's a racket, right? Club Med goes really the extra mile in terms of really wanting to teach you. You know, they have tennis coaches for all levels. You have classes, beginners, intermediate, advanced, all of that is included, no extra cost. So, you know, not only do you have the equipment and the infrastructure, but you have, you have the teaching, and you have the whole social experience with the tournaments and just the fun-loving spirit that gets you united around people who like the same sport as you or who are learning the same sport as you.

Josiah: Which is great, I think, as a guest, but also as a team member there, because it feels like a fun, open environment, the best of hospitality. I appreciate you walking through All-Inclusive, everything from your experience as a guest to working there to commenting on how some of the bigger trends are happening in the space. You touched on a lot of elements of this, but before we move on, is there anything else on your mind when it comes to All-Inclusive, things you're thinking about, excited by, reflections on, I guess this is a type of hospitality business?

Sabrina: I mean, just on your question about the business model and the profitability, I do have to say that maybe one of the preconceptions could be that, okay, it is all-inclusive, so there's not a lot of opportunity to generate additional revenue and I don't agree with that. I'm a big believer in the fact that even in an all-inclusive environment, if you deliver your all-inclusive very well, your basic all-inclusive very well, there are a lot of opportunities to generate ancillary revenues and upsell and to create additional experiences there for guests. I think that's something that other sectors do much better than the all-inclusive sector. But I get very excited thinking about all the opportunities that there are and translating sort of the best practices of cruise lines or even airlines. At Club Med, we worked on a concept called Pick Your Room, where you could, just like you pick your seat and pay for it in an airplane, or the same on a cruise, you pick your cabin and pay a specific price for the cabin with the certain features you want. We also worked on that concept for Club Med, where you have a floor plan of the resort, and if you want to be closest to the restaurant or close to the kids club, you can pick that ahead of time, and that has a value. And anything that has additional value that's an unmet need for guests, I think there are many opportunities there.