THE PIPELINE : LATIN AMERICA
has only 35 hotels in Latin America outside of Brazil . Accor says it is looking to continue expansion in Brazil , Argentina , Chile , Colombia and Peru .
“ Our aim is to reach , by 2016 , a network of 250 hotels comprising 40,000 guestrooms in Brazil for a total of 320 hotels comprising 50,000 rooms in Latin America ,” says Roland de Bonadona , Accor ’ s COO for Latin America , who says Accor will expand via franchise in Brazil with its newly revamped Ibis superbrand . The target customer is the local business traveler .
“ The franchising model is really taking off in Brazil ,” de Bonadona notes . “ We use this type of contract to develop in secondary cities . We recently signed three major franchise agreements with historical partners for the development of 25 Ibis Budget hotels . Our aim is to open , by 2018 , 100 Ibis Budget hotels in Brazil under franchise .
“ Around 80 % of our customers are local ,” de Bonadona adds . “ The profile varies from one brand to another , but basically we work with business travelers .”
Atlantica has the second-largest portfolio in Brazil with about 80 hotels operating . Atlantica has an exclusive development agreement with Choice Hotels International and Carlson for the Mercosur member states . Although
Holiday Inn Bogota Airport , Colombia
many of its hotels are under economy brands , Atlantica ’ s systemwide ADR in 2011 was US $ 112 .
“ Here that is the ADR with Comfort Inns . It ’ s because the supply here is limited ,” Sistare says . “ We finished last year with 17.9 % RevPAR growth systemwide . We had 13 % rate growth last year while occupancy was relatively flat , but that ’ s because we ’ re renting all the rooms we can . On Tuesdays , Wednesdays and Thursdays we are running near 100 %, while on Mondays and Fridays we ’ re at about 70 % and on weekends a bit lower .” Unlike Accor , Atlantica is skeptical about the viability of the franchise model for hotels given the relative opacity of income verification in South America and says it will expand via management deals . Atlantica has 35 more hotels under construction in Brazil , mostly in secondary cities of 2 million to 5 million people . “ We ’ re focusing on midscale business hotels in cities that anyone who doesn ’ t know Brazil can ’ t find on a map ,” Sistare says .
Atlantica will also steer clear of leisure travel development , asserting there is insufficient demand . “ The resorts we ’ ve had , we ’ ve fallen on our face ,” Sistare says . “ People here flee to the countryside or to the beach on the weekends and stay with friends , not in resorts .”
Brazil Hospitality Group ( BHG ), São
Paulo , operates 45 hotels in Brazil under Groupe du Lourve ’ s limited-service Tulip Inn , full-service Golden Tulip and upscale Royal Tulip brands via an exclusive partnership agreement . Like Atlantica , BHG saw RevPAR surge in 2011 , up 23 % year-on-year . BHG owns 16 of its hotels and looks to expand via own-operate as well as by management and franchise . In January BHG bought hotel management company Grupo Solare , São Luís , Brazil , and plans to use Solare ’ s Soft Inn brand to expand in Brazil via franchise . BHG appears to be set to reach its goal of 13,000 guestrooms by the end of this year ; so far the growth remains confined to Brazil .
“ The company envisages expansion in other countries in the region ,” says Pieter van Voorst Vader , BHG ’ s CEO . “ Nonetheless , we have to wait for the right opportunity to initialize this part of the company ’ s long-term strategy . If we do go outside Brazil , we will need to have acquired more than 600 guestrooms from the get-go so we can have a decent starting size to remunerate the initial investments and to support the costing structure of having an operation outside our homeland .”
Expansion plans Brazil is not getting all the regional pipeline , though , as Latin America has several other hot markets .
NH Hoteles is looking to expand its Latin American portfolio of 35 hotels via own-operate and management deals , primarily in the markets in which it is already present — Mexico , Argentina , Colombia , Chile and Venezuela , where it says its hotels are performing well . Business travelers comprise about 60 % of its guests . “ We would like to double our size in Latin America within the next three years ,” Donmez says .
La Quinta Inns & Suites , Irving , Texas , has been targeting Mexico — where it has five hotels open and 16 in the pipeline — for expansion , and now has Panama and Colombia in its sights for its mid-range franchise offering . “ Local travelers need price point-advantageous hotels ,” says Rajiv Trivedi , La Quinta ’ s executive vice president of franchising and chief development officer .
Trivedi says La Quinta will avoid master franchise agreements and instead set
32 HOTELS June 2012 www . hotelsmag . com