All-inclusive contracts offer benefits and challenges

For hoteliers, all-inclusive vacation club contracts provide guaranteed volume, extend the season, and simplify marketing. However, they also impose strict pricing controls, contractual dependency, and constant pressure on food costs, raising questions about the true value of these agreements.

Vacation club model originated in France

The vacation club model began in France, where tour operators bring the brand, airplane, and entertainment, while hotels provide the physical infrastructure, service, and staff. This partnership allows hotels to focus on operations while relying on the tour operator for marketing and customer acquisition.

Seto tour operators report strong performance

In 2024/2025, Seto tour operators achieved 4.36 billion euros in turnover for nearly 2.9 million customers. By December 2025, club reservations for the summer of 2026 were up 44.3%, with Greece surpassing Spain in bookings, showing strong demand for all-inclusive vacations.

Occupancy rates show mixed trends

Despite a slower spring due to the Middle East conflict, individual clubs saw a 1.5% increase in occupancy, while traditional vacation packages declined by 16.2%. Hotels that operate as clubs reported more stable occupancy rates compared to the broader market.

Club Med sets a new benchmark

Club Med set a benchmark in 2025 with an average daily price of 241 euros and 75.8% occupancy, aiming to expand to 100 villages in ten years. In France, all-inclusive clubs commit for six months, compared to about four months in Italy, offering a longer season but shared financial risk.

Industry consolidation affects hoteliers

Consolidation in the sector is accelerating, with Karavel Fram acquiring Alpitour France and its brands Bravo Club and Sea Club in 2025. This trend reduces hoteliers' negotiation power and may lead to less favorable contract terms.

All-inclusive model has mixed efficiency

The all-inclusive model offers customers predictable pricing and protection from inflation, but it demands strict cost control for hoteliers. Research shows lower efficiency in the Canary Islands, while in the Balearics, the model generates value through economies of scale.

Cost calculations are critical

Before signing contracts, hoteliers must calculate their complete cost per night, including variable costs (food, drinks, energy) and a share of fixed costs (staff, maintenance). For example, a 4* Mediterranean hotel requires at least 50 euros per person per night to maintain quality.

North American chains expand all-inclusive options

North American hotel chains are expanding their all-inclusive segments. Hyatt operates over 150 all-inclusive resorts with 58,000 rooms, while Marriott has 38 and 20 projects in development. Six out of ten American and Canadian travelers prefer all-inclusive options, with 84% returning after their first visit.

European hoteliers face growing competition

European hoteliers face competition from better capitalized chains like Hilton and Hyatt, which are expanding into Greece and Portugal. These chains offer à la carte dining, loyalty programs, and adults-only spaces, pushing European hotels to adapt to new market demands.

Hoteliers advised to focus on quality and flexibility

Hoteliers are advised to calculate their complete cost per night, invest in family and quiet spaces, train teams in French-speaking hospitality, offer flexibility in shoulder seasons, and measure customer satisfaction continuously. These steps are essential for maintaining quality and competitiveness.

All-inclusive model evolves toward premium experiences

The all-inclusive model is evolving, with a focus on premium accessibility, eco-clubs, and culturally rooted experiences. Future success depends on understanding costs, investing in quality, and negotiating as partners to meet customer expectations.