What it means
An all-inclusive product is one whose price covers most or all of what a guest will consume on site: accommodation, meals, soft drinks and (usually) alcohol, and a defined set of activities, with extras that fall outside the bundle clearly named in the booking terms. The phrase implies that the guest does not need to make further purchasing decisions during the stay - a promise about cognitive load as much as about money. The promise is delivered to very different standards across four distinct tiers.
Origin and trade adoption
The modern all-inclusive resort traces to Club Méditerranée (Club Med), founded in 1950 by Gérard Blitz and Gilbert Trigano, which built the pre-paid bundled-holiday model through the 1960s and 1970s. Earlier antecedents exist in turn-of-century holiday camps and Britain's Butlin's (1936), but Club Med is the proximate source of the contemporary luxury and near-luxury vocabulary. The mass-market Caribbean operators built on the Club Med template through the 1980s onward: Sandals (1981, Jamaica, adults-only), Beaches (Sandals' family brand), AMResorts' multiple brands (Secrets, Dreams, Now), Iberostar, RIU, and Bahia Principe. Small-ship cruise lines adopted the format from the late 1980s: Seabourn (1988), Silversea (1994), with Regent Seven Seas and Crystal following.
What to expect
Four tiers are useful to keep distinct. The mass-market beach resort (Sandals, Iberostar, RIU, Bahia Principe; Mexico, the Caribbean, Spain) offers high volume, food, soft drinks, well spirits, and non-motorised activities included; premium spirits, motorised activities, and most off-resort excursions are unbundled. The mid-market lodge-based tier (selected operators in Africa, Costa Rica, parts of Southeast Asia) is smaller in scale and includes food, drink, and one or two guided experiences a day. The ultra-luxury all-inclusive (Singita in Africa, certain Aman packaged tours, Belmond's train-and-lodge programmes through southern Africa and the Andes) charges substantially higher per-night rates and includes most experiences plus drinks at a level the mass-market operators do not match. The small-ship cruise tier (Silversea, Seabourn, Regent Seven Seas, Crystal) includes accommodation, meals at the main and most specialty restaurants, drinks at named tiers, gratuities, and a varying number of shore excursions. The marketing distortion to watch for: the same phrase covers all four tiers, and what is actually included varies sharply. A mass-market Caribbean all-inclusive at $200 per night and a Regent Seven Seas suite fare at $1,200 per person per night are both called "all-inclusive" without further qualification.