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All-Inclusive Package Holidays: The Tourist Industry's Villains?

“All you need to save for in the run up to your break is some spending money for the airport, any transport or extra activity costs and cash for any souvenirs you wish to buy.”, Why Go All-Inclusive?

The ‘all-inclusive holidays’ described by Travel Supermarket are seen by some as monsters, ruining the very places that they promote. Are they really that bad? Or have they breathed new life into the travel and tourist industries? We look at the issue from the point of view of some key stakeholders …

The two ends of the discussion are illustrated by the ‘anti’ camp:

versus the ‘pro’ point of view:

What do you think? Are the anti-inclusives just killjoys who don’t realise what it’s like having to save up for a decent sunny holiday?

Or are the pro-inclusives missing out on the real joys of travel while destroying local communities?

It’s not an easy issue.

Introducing the Holiday Stakeholders:

1 – The Holidaymaker

When they started in the 19th century, package holidays gave people confidence to travel, and budget control was not typically a big issue – it was more about security. In the 21St century package holidays are less about physical security than comfort and acceptable food and drink. And with the increase of all-inclusive package holidays, the landscape has changed again – and not necessarily in a way that makes for happy customers …

These days people are increasingly chasing the deal, and last year’s Post Office report into all-inclusive holidays shows that it’s not so rosy, or so easy to budget. With unexpected extras ranging from branded drinks to wi-fi and inflated exchange rates for local currency, expectations often fall short of reality. As a result, nearly half the travellers surveyed in 2012 had ended up paying more than they had expected, and more than on a standard package.

Bracelet that shows what level of package you are on

The AI bracelet shows staff what deal you are on

Another key question for many is whether tourists actually enjoy being cloistered. The answer seems to be a resounding ‘yes’ for the cash-strapped family who can spend their entire trip in a fully-catered resort complex, relaxing by the pool with children safely cared for, eating and drinking whatever they want.

But for those who have fewer family demands – or who are not happy sitting around a pool for their holiday – the all-inclusive option might not seem a credible option.

2 – The Local Business

Before the rise of all-inclusive holiday packages, local businesses clearly benefited from an increase in tourism to their part of the world. Hotels, businesses that supplied the hotels, local bars and restaurants, taxis, supermarkets and other shops all stood to gain from tourists who were relaxed and spending money.

The modern popularity of all-inclusive holidays often means that holidaymakers and their money are increasingly kept inside the resort complex. With everything they consume already paid for, it is the – usually foreign – company who sold them the trip that makes all the money. And if the tour operator doesn’t have local businesses within their supply chain, the local economy benefits very little from the tourists that their region attracts. And when large hotels are supplied by local businesses, their purchasing clout ensures that profit margins are cut to the bone.

However, some parts of the world do not have the infrastructure to support a tourist trade, and an all-inclusive deal makes these areas accessible to travellers without having to strain the local economy. And the hope is that once the tourist trade has been established, local entrepreneurs can start to thrive, and there will be an increase in numbers of ‘independent’ travellers whose money connects more with the local community.

The challenges faced by local business varies around the world, but here are some examples from Mediterranean short haul destinations.

Cyprus – and the Russians

Cyprus is notoriously popular with Russian tourists, and they have embraced the AI holiday in Cyprus wholeheartedly: “a staggering 80% of Russian arrivals select all-inclusive holidays”, according to Cyprus Mail, and the blame is quite clearly apportioned: “the all-inclusive product is problematic as it promotes the creation of tourist resorts, excluding the local entrepreneurial sector. Additionally, it encourages the leakage of money to foreign tour operators”.

Cyprus beach … covered in tourists on an all-inclusive package? (image:

Turkey – a real boom?

Tourism is thriving in Turkey, due in part to its relative affordability to those who live outside of the Eurozone. But once again, the financial benefits to the host country are limited: Hurriyet Daily News says:

Although Turkey is one of the hottest tourism spots and attracts around 35 million foreign tourists a year, its tourism income per tourist is far below the average among all the top hotspots, due in part to the large number of all-inclusive destinations on the country’s south coast that mean visitors pay less per capita than tourists to other countries.

Fuerteventura – in the balance

On a recent visit to Fuerteventura in the Canary Islands, it was shocking to see how a small shopping centre in the resort of Costa Calma had been transformed over four years from a fairly bustling spot to a desolate building with closed-down shops and just one bar. The local hotel reviews on, though, suggest that somewhere producing good food that beats the much-derided all-inclusive buffet may stand a chance of attracting good business – if they persevere …

Further north lies the bustling town of Corralejo – by contrast fairly devoid of ‘AI’ packages. Tourists there have access to a range of bars and restaurants, and the changes there over the last few years seem to have been positive. New restaurants have sprung up, and the contrast with Costa Calma is apparent.

3 – The Local Worker

Distinct from local businesses, local people are needed to staff the holiday complexes. It may often be menial work such as cooking and cleaning, but employment brings money into the community. There are also higher-level jobs such as working on reception or management that require education and language skills.

The danger is that it is often easier for the tour operators to recruit high-level staff in their own countries, so taking even more away from the local economy.

A local hotel worker in the Caribbean once told me that the jobs provided for the local community by all-inclusive hotels were “the best jobs we’ve ever had”, says Justin Francis from Responsible Travel.

4 – The Tour Operator

The biggest winners out of the all-inclusive boom are of course the travel companies – but tour operators are not all the same.

The ‘Responsible’ Attitude

There are, as Sarah from the ethical travel portal tells us, different types of all-inclusive packages.

Some of the holidays on  are “all-inclusive” in that the customer pays the tour operator for all their food, accommodation, transport, activities etc – but that this doesn’t necessarily mean they are cooped up in a hotel/resort they don’t leave, or that they are detrimental to the local community or environment.

“These trips often involve touring a region or country, eating in local restaurants, staying in locally owned and run accommodations, using local guides, and supporting and visiting local community tourism projects. They offer travellers a real insight into the country they are visiting – a more authentic, deeper experience.

Responsible travel benefits tourists and locals (image:

‘Ethical’ travel companies also offer all-inclusive holidays when it would be difficult for tourists to be able to fend for themselves. Profit is less of an issue than maintaining a reputation for not damaging the destinations they manage travel to. There may not be the ‘luxuries’ that are often part and parcel of a fancy travel experience, but you return home knowing that the place you visited is more likely to stay as you left it.

The ‘Pile-it-high Sell-it-cheap’ Attitude

This makes the holidays on markedly different to the standard travel companies who are driven more by ‘short term’ gains. The recent decision by TUI-owned First Choice Travel to make all of its packages all-inclusive show how attractive they can be, and how they can dramatically increase profits in a previously-beleaguered industry.

TUI Travel, owner of the Thomson and First Choice holiday brands, made record profits last year as more and more Brits opted for its all-inclusive package holidays,” writes Neil Goodway in The Standard.

Tui – doing well out of all-inclusives (image source:

All-inclusive packages allow big companies to take advantage of economies of scale that are not available to the smaller operator – and when they fly holidaymakers to their destination in Boeing’s 787s they have control of the whole journey.

Surprise Win at Responsible Tourism Awards 2013

Having said that, Responsible Travel’s annual Responsible Tourism Awards there was a surprising winner … TUI Netherland.

Responsible Tourism Awards 2013

A surprising winner! (image:

They showed that economies of scale can be put to good use: “TUI Nederland and its numerous partners launched a campaign to say ‘a collective ‘NO’ to child sex tourism in the Northeast of Brazil’ “. The Judges added that TUI Nederland “contributed over 100,000 euro since 2008 to fighting child exploitation in the region; 80 adolescents from 14 to 17 years of age have been trained as ‘Youth Mobilizers’, for the prevention of sexual exploitation of children and adolescents, reaching over 2,000 people. Their vocational training programme has 104 graduates of whom 39 were employed throughout 2012“.

So what do you think now? Do you agree with those surveyed who think ‘all-inclusive packages’ should be banned?

Or are they a natural development in an expanding industry?

To find out more about this issue:



  • Dewi Evans

    All inclusive holidays serve a purpose especially where cash strapped families are concerned. Imagine a family of 4 (2 adults & 2 children)staying in a 4* hotel on a B&B basis in Cyprus for instance at an average cost of £3500 all in for a two week stay. Then add on the cost of meals, drinks, ice cream & other sundry items. Add all that together and you will find that this well exceeds the cost of a similar AI holiday!
    In Cyprus, it appears that businesses, rather than compete with the AI holidays and reduce their prices, are hell bent on INCREASING prices, stating that falling sales due to the AI packages, forces them to put up their prices, therefore increasing their profit margins!!!! IMHO, this widespread practice amongst the business community in Cyprus does nothing to encourage the tourist to take a more independent approach when choosing and booking their hard earned holidays!!
    Maybe a solution to the spread of AI’s is for local Hoteliers and businesses to change their practices and reduce their costs favouring smaller profits but with a higher turnover of patrons!!!!

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