Economics of All-Inclusive

One of the things I spent a bit of time thinking about on holiday was the economics of the whole all-inclusive aspect of the holiday. I can’t think of a better place for experiments on the value that we assign to things than an all-inclusive hotel. Initially, I thought that there’s no way I’m ever going to ‘get my value’ (i.e. use more than I spend) on an all-inclusive. I’m small and my family are fairly small eaters (3 small children!) - neither my wife nor I are heavy drinkers. All-in-all, we’re presumably the kind of people who all-inclusives love. However, the nature of an all-inclusive fundamentally alters our consumption patterns and offers a really good insight into what your life might be like if you were completely price insensitive. We didn’t start drinking heavily every night, but the 11:30am cocktail by the pool? Sure. And to wash it down, I’ll have a slushy. Why not? Snack pizza before dinner? Of course. Again and again I found myself reaching for ‘just a little thing’…