The main things to consider are location, the number of people, what you like to do on holiday, whether you are likely to eat 3 meals a day and drink enough to make it worthwhile
First of all location. Many all inclusive are in fairly remote locations with very few if any bars or restaurants nearby. This works particularly well in the Caribbean and the Indian Ocean., neither of which are well served by local buses so you would otherwise have to rely on taxis to get around. Also these places tend to to employ locals and often they try to use local produce and cuisine so it still benefits the local community and they still manage to retain some local character and design. Some destinations such as Cancun and the Mayan Riviera, Dominican Republic and Tunisia are almost exclusively all inclusive. I am generalising here and there are a few exceptions but in the majority of Mediterranean destinations, all inclusives tend to belong to a chain and cater for a more international clientele so they have themed buffets on most nights, the food is often monotonous and inferior, the drinks often watered down, and they more often tend to employ international staff over locals.
The second thing to consider is who is travelling. If you are a couple and like to experience some local culture then you would really be better with a family run B&B, however if you do very little except sit round the pool bar all day then all inclusive would suit you. Families are more difficult. For a family of three, consisting of 2 and adults and 1 child you can often get a free or really cheap child price and benefit from the magnificent facilities the hotels have to offer and the child can drink coke and eat ice cream and chips to their leisure while mum and dad relax round the pool, perfect. The hardest families consist of 5 people, 3 adults, 1 child and a baby. 2 bedroom all inclusives are rare and have to be booked well in advance. If you have to go for 2 rooms then you lose the child discount so it proves to be ridiculously expensive. I have had a few requests for this family group and I haven’t managed to accommodate any of them due to the ridiculously high cost of ths combination. Take for example a family who paid £4000 for a week for a family consisting of 2 adults, a child and a baby. Adding an extra adult brings the cost up to £6600 over 50pc more! This is not a unique case either. All inclusives rarely work out well for single people either as the single room supplement often means paying almost double and the catering is only for one.
How much would you spend otherwise? We have just spent a week on B&B and another week on half board in another resort. It is true that we spent probably 4 times as much factoring in evening meals and drinks but we were in bigger company rather than just on our own. On the other hand we have stayed all inclusive in Tenerife and prefer the bars outside so we have still ended up spending a couple of hundred euros anyway. Personally I prefer half board as we don’t tend to eat lunch and I am not a big fan of hotel bars and hotel entertainment It really depends if the difference in cost is £200 or £1000. If it closer to £200 then it would certainly be cost effective but the quality of food may not be the best. If however the difference is much higher, would you honestly spend that much on food and drink?
The other thing worth remembering is that not every property offers all inclusive so it does narrow the choice considerably.
So in conclusion it can be good value but not always, so it is definitely worth looking at all the options and decide whether it really is the best option or whether it might be worth widening your options before making a final decision.