THE PIPELINE : LATIN AMERICA
Radisson Hotel Aracaju , Brazil
We will consider taking equity in very specific circumstances , but our preferred method is to establish long-term management contracts ,” Hughes says . “ Latin America does not have a big range of independent third-party management companies , so we are very selective with franchising . We look for partners that can do multiple deals , although not necessarily a master license deal .”
In April , Hilton signed a management agreement for a 102-room Hilton
The Hilton Garden Inn Santiago Airport , Chile . Some natural building materials that are typically too expensive to use in limited-service hotels in North America are more affordable in South America .
Garden Inn in Queretaro , Mexico , and a 92-room Hampton Inn by Hilton in San Juan del Rio , Mexico , both set to open later this year .
IHG sees the most potential for its hotels in Brazil , Colombia , Chile , Peru and Argentina , but is wary of oversupply in Panama . “ When we look at our pipeline , the majority are midscale ,” says Alvaro Diago , IHG ’ s COO for Latin America .
IHG has 78 hotels comprising 15,201 guestrooms under operation in Latin America and 21 under development , of which 16 are branded Holiday Inn or Holiday Inn Express . About 60 % of its Latin American portfolio is franchised , and it saw a 10 % yearon-year RevPAR increase in 2011 . Almost all the hotels are primarily for business travelers . “ I would say 99 % of our portfolio is business hotels in key markets ,” Diago says . “ You have a lot of inter-regional travel .”
In March , IHG signed a franchise agreement with Grupo Contempo , Bogota , for three Holiday Inn Express hotels in Bogota , Cartagena and Barranquilla , Colombia .
Kempinski Hotels is set to re-enter Latin America with the signing of a management contract for a new-build 106-room near Portobelo , Panama .
The Caribbean remains largely cut off from the Latin American pipeline due to excess inventory and leisure demand from the United States and Western Europe remaining below pre-crisis levels . However , an exception is Hard Rock International , Orlando , Florida , which is set to expand via all-inclusive casinoresorts in Mexico with the opening of three rebranded Palace Resorts properties as The All Inclusive Collection . This includes the 601-room Hard Rock Cancun , 1,266-room Hard Rock Riviera Maya and the 348-room Hard Rock Puerto Vallarta . In addition , Hard Rock announced in April a 310-room newbuild under development in Aruba .
Hard Rock says its Panama City hotel , which opened in December , is performing well , and RevPAR at its Punta Cana , Dominican Republic , casino-resort doubled year-on-year in 2011 .
“ The brand has resonated in this marketplace ,” says Michael Shindler , Hard Rock ’ s executive vice president of hotels and casinos . “ Our music connection is the big differentiator .”
34 HOTELS June 2012 www . hotelsmag . com