Tourism market forces in most tourism driven economies and mature tourism destinations shift from the ‘conventional independent’ to ‘all-inclusive’ (AI) tour mode. Using Majorca as a case study, this paper analyses the AI mode: its supply and demand sides. Through specific tourist and desk surveys conducted in 2006, it was revealed that until May 2006,the population of AI accommodation suppliers in Majorca was around 195; 36% of which offer ‘exclusively AI’ product. Moreover, above 85% of tourists visiting Majorca were package tour customers; with at least 15 percent travelling through the AI tours. Noticeably, an AI tourist spends less than overall average tourist’s expenditure per day at the destination, but spends more at the country of origin. Challenges are identified and recommendations given to improve the welfare of the economy