Hotelier shuns all-inclusive concept
While an increasing number of properties in Jamaica and the Caribbean have embraced the all-inclusive concept to lock in tourist spend, reduce visitor safety concerns or otherwise enhance the vacation experience, two of Chris Blackwell's properties are backing away from the model.
Jason Henzell, president of Island Outpost, which operates the upscale and exclusive GoldenEye resort property in Oracabessa, St Mary and The Caves at West End in Negril, Westmoreland, has outlined plans to reposition the hotels away from being all-inclusive.
Henzell has offered as the reason for the move, his wanting to give visitors a better experience of Jamaica, but later added that with the repositioning away from the mass market, the properties should improve earnings.
"I'm not beating down the all-inclusives; I don't think the (model) is the right concept for Jamaica's interest because, with the all-inclusive, the wealth is not spread," he told the Financial Gleaner.
He clarified, however, that he was making no judgement call on all-inclusive operators, saying their hotels have had a big role in the development of the tourism sector.
"I have a tremendous respect for those who operate them. I'm not saying, or expecting, the all-inclusive should change their concept, but for future hotels, I think that the all-inclusive model is not the one we should pursue for Jamaica," he said.
Island Outpost is a grouping of some nine villas and five privately owned small properties: Jakes Hotel Villas & Spas, owned by Henzell; The Caves, GoldenEye and Strawberry Hill Hotel and Spa, owned by Blackwell; and Geejam Hotel in Portland.
Henzell argued that properties that are not all-inclusive allow more economic activities to be available to entrepreneurs in communities close to the resorts.
All-inclusive resorts, which package food, entertainment and accommodation for one price, for the larger segment of the hospitality trade in Jamaica, account for 15,313 of the available rooms at the end of 2009, compared to 5,237 for European Plan properties, according to the Jamaica Tourist Board.
The tourism agency says it does not track how much of each dollar spent for all-inclusive vacations spill over into the Jamaica economy, but they lead the market in terms of volume and revenue.
Last year, average room occupancy for all-inclusive hotels was 64.9 per cent and 39.5 per cent for non-all-inclusives.
revised sales pitch
GoldenEye, which is undergoing a multibillion-dollar upgrade and expansion, is expected to reopen at the end of November.
However, it will be another two years before the 14-room Caves, sheds the all-inclusive plan.
Rates at the properties are expected to see some changes, with GoldenEye to cost more as a result of additional offerings, while The Caves could see room-rate reductions, with the operational changes to be made in 2012.
Henzell said he was aware that it would require more work to sell, the non-all-inclusive concept to visitors.
"The advantage of an all-inclusive hotel is that it is easier to sell because persons buy into the fact that Jamaica is a violent society," said Henzell.
"But Jamaica's asset is its people and culture. There is more economic benefit if this is highlighted."
"It will take a little more work," he said.
Tourism minister Edmund Bartlett has welcomed the move by Island Outpost, whose other properties do not operate under the all-inclusive umbrella.
"It will drive the average daily rate and it will allow more of the tourism dollar to flow into the community. That business model will allow more persons to benefit from the tourism product," said Bartlett.
Despite the harder sell, Henzell is projecting that the new business model will do well for the properties.
"We used to run GoldenEye as a small villa property (and) it was marginally profitable," said Henzell.
When it reopens, the St Mary property it will be marketed as a boutique hotel at an even higher end of the market.
"We believe that with the scale, and it being a non-all-inclusive hotel, it will be more profitable," Henzell said.
"When you go too much for the mass market, people will see you as a commodity. But where you embrace the country and the people and put that in the marketing, you will be more unique."