PIPELINE : LATIN AMERICA
“ IT MIGHT SOUND AGGRESSIVE ,
BUT IT ’ S NOT AS AGGRESSIVE AS WE ’ D LIKE .”
– MARRIOTT INTERNATIONAL REGIONAL VICE PRESIDENT CRAIG SMITH ON THE COMPANY ’ S GOAL TO GROW ITS LATIN AMERICA PORTFOLIO FROM 75 TO ABOUT 150 BY 2017 overall the city today is very undersupplied ,” Mader says .
Given that Brazil has 16 cities with at least a million residents and another 25 with at least 500,000 people — and many of these tertiary markets have few internationally branded hotels — Brazil would be soaring even without sport .
Lisbon-based Tivoli Hotels & Resorts , despite having a leisureheavy Europe portfolio , is focusing its Brazil expansion on city hotels . CEO Alexandre Solleiro says each of Brazil ’ s state capitals is ripe for development , including plentiful opportunity for conversions of subpar independent hotels .
São Paulo-based Brazil Hospitality Group , which licenses the Tulip brands in South America from Louvre Hôtels Group , is making a push into northwestern Brazil . BHG believes cities like Manaus and Belém need more hotels to serve the textile , construction and agribusiness industries and expects to open or convert 20 additional properties by 2015 .
The majority of Brazil ’ s new hotel developments , especially those in gateways , are being funded under a modification of the condo-hotel model . Dubbed “ condo-hotel 2.0 ” by some hotel executives , the model doles out percentage shares of the composite real estate , rather than physical units .
Hyatt Hotels Corp ., which has nine properties in Latin America and 24 more in the pipeline , is launching its Hyatt Place brand in Brazil with a nine-hotel development deal . “ The select-service segment is significantly underserved throughout Latin America ,” says Pat McCudden , senior vice president of real estate and development in Latin America . “ Emerging markets in Brazil and Mexico present great growth opportunities .”
Brazil still the star The 2014 FIFA World Cup and the 2016 Summer Olympics are the headlinegrabbers , but it is the weakened real complemented by a churning industrial sector that is really driving growth in Brazil ’ s hotel industry . Brazil ’ s active pipeline totaled just shy of 21,000 guestrooms as of May , according to STR data , which would represent an 11 % increase over existing inventory .
Rio de Janeiro needs about 24,000 more rooms to meet anticipated Olympics demand , says John Alexander Auton , a Rio-based adviser for Deloitte . There is some concern , though , that Rio ’ s Barra de Tijuca district could struggle with low occupancy after the Games , as inventory there is more than doubling from 4,500 guestrooms to about 10,000 . “ Some regions of the city may have some negative impacts because of the new supply , but
Colombia the trendy pick The one country in the region that can almost match Brazil for enthusiastic buzz is Colombia . Decades of political instability and drug wars have given way to peace and a robust economy , and developers are stampeding to opportunities across all segments and markets . Colombia also continues to benefit from festering anti-business sentiment in neighboring Venezuela , and tax incentives are helping generate a construction boom .
Hughes calls the 245-key Hilton Bogota one of Hilton Worldwide ’ s great successes in Latin America ; opened in November 2011 , the property is a year ahead of schedule in terms of achieving occupancy and rate projections .
50 HOTELS September 2013 www . hotelsmag . com