(Bloomberg) -- All-inclusive resorts, which typically charge budget-conscious travelers a single price for lodging, food and often airfare, have long been the domain of specialty operators. Now the world’s second-largest hotel company is wading further into the business.

Hilton Worldwide Holdings Inc. on Monday announced an alliance with Playa Hotels & Resorts NV, a real estate investment trust that specializes in all-inclusive resorts. Playa will convert two Caribbean hotels into Hiltons, and the companies plan to team up on an additional eight resorts by 2025, according to a statement. Hilton currently has 11 such properties in its portfolio.

All-inclusive resorts became popular in the 1950s as a way to appeal to bargain-hunting vacationers, according to a report last year from Jones Lang LaSalle. In recent years, hotel owners have been applying the model to higher-end properties, sparking “growing curiosity and interest of global management companies,” according to the report.

The niche is still dominated by brands like Sandals Resorts International and Secrets Resorts & Spas. Hyatt Hotels Corp. operates six hotels under two all-inclusive brands, according to the company’s website, but those are more the exception than the rule.

Although it hasn’t had a dedicated brand, Hilton has experience operating all-inclusive properties, Chief Executive Officer Christopher Nassetta said on a conference call in July, and has considered creating “sub-brands” focused on the business model.

“We’ve been doing a bunch of work to figure it out,” Nassetta said on the call. “In certain locations, not broadly across the world, but in certain geographies, that is something that customers want.”

All-inclusive resorts in the Caribbean region generated revenue of $3.8 billion in 2017, up from $2.2 billion in 2012, according to lodging-data provider STR Inc. The two hotels that Playa is converting to Hiltons are in Playa del Carmen, Mexico, and La Romana, Dominican Republic.

To contact the reporter on this story: Patrick Clark in New York at pclark55@bloomberg.net

To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net, Peter Jeffrey, Debarati Roy

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