Focus on upper-upscale and luxury hotels leads to higher systemwide
ADR; all-inclusive with more wellness still the development play.
Note: first published in Travel Weekly
MALLORCA, Spain – Founded in Mallorca, Spain, in 1956, Meliá Hotels
International has evolved into a major hospitality player with a global
portfolio of more than 380 properties across more than 40 countries. Its 10
brands include luxury flags like Gran Meliá Hotels & Resorts and ME by
Meliá as well as the high-end, all-inclusive concept Paradisus by Melia. Christina Jelski recently caught up with Meliá Hotels International COO
Andre Gerondeau for an update on the fast-growing company.
Travel Weekly (TW): How did the company’s portfolio
perform in 2023?
Andre Gerondeau: We ended 2023 with about four points
less occupancy than in 2019 but with about 25% higher ADR, for a number of
reasons. One is because we’ve been focusing a lot of strategy on upper-upscale and
luxury hotels. Today, about 15% of our rooms are upscale or luxury, but they
generate almost 40% of the revenue.
TW: What’s your bird’s-eye view of the current global
travel demand picture?
Gerondeau: Last year, we were facing a number of
challenges. Obviously, the situation in Israel is delicate. So, we had some
concerns of how that could impact travel, especially in Europe. And we still
have the Ukraine situation. One thing we can say, though, is that this business
is very resilient. Customers are willing to travel, and I say this because our
pace has not slowed down. It did not slowdown in summer, and it has not slowed
down as we enter the winter. We have very strong demand in Q1 with the
Caribbean, and the pace is strong in the Dominican Republic. It’s also very
strong in the Canary Islands.
The [all-inclusive] segment is becoming far more well known. People are understanding that it’s possible to drive a luxury experience in all-inclusive.
Andre Gerondeau
The U.S. market coming back to Europe was very strong. In
some of our destinations, which were not key U.S. destinations, like the
Balearic Islands – Minorca, Ibiza, Mallorca – the U.S. market became the third
most important market for some of our luxury properties last summer.
Previously, it may have been the fifth, sixth or seventh most important market.
TW: What are the headwinds and tailwinds when it comes
to growing Meliá’s all-inclusive presence?
Gerondeau: The biggest challenge is the U.S. brands
coming into the all-inclusive market in the Caribbean, and that has been a
challenge for all all-inclusive properties. At the same time, it’s the biggest
opportunity because the segment is becoming far more well known. People are
understanding that it’s possible to drive a luxury experience in all-inclusive.
TW: What’s new on the Paradisus all-inclusive front?
Gerondeau: There are a few things we’re doing. We
opened our first two Paradisus properties in the Canary Islands, on Lanzarote
and Gran Canaria. And we are converting one of our properties in Bali to
Paradisus. So, our plan is to take the footprint of the brand to the
Mediterranean, Caribbean and Southeast Asia. And we understand there are
certain markets where you can’t be a 24-hour, self-contained resort. So, we’ve
created Destination Inclusive. This is a program for some of our categories
where we add a number of activities within the destination as part of your
experience. Some of these are curated, private experiences for hotel guests.
For example, we have a cenote that is only for our Paradisus Playa del Carmen
and Paradisus Cancun guests.
Another thing we did, because we realized that all-inclusive
was becoming a little vanilla and there are only so many restaurants and pools
that you can have, is converted the Meliá Punta Cana Beach to create a
wellness-inclusive resort. It’s a spa without walls. There are a number of
activities related to the spa circuit, there are wellness suites.
It’s creating a whole well-being atmosphere. That’s
something we’ll continue to add to our Paradisus resorts, as well.