PIPELINE : LATIN AMERICA
And where upscale and luxury hotels were once scarce outside Bogotá , secondary cities Cartagena and Cali now have branded 4-star properties under development , too , while Barranquilla , Cúcuta and Medellín are seeing an influx of midscale projects . Among the six properties IHG has in process across Colombia is an InterContinental in Cartagena , and Hyatt has a Hyatt Regency under construction in the city .
Colombia ’ s resort market remains underpenetrated , but the consensus is that the country ’ s business sector needs to be better established before growing too rapidly on the leisure side . “ Once [ travelers to Colombia ] feel comfortable from a safety and security perspective , the next time they come maybe they ’ ll add on a leisure experience ,” del Olmo says .
Mexico ’ s U . S . dependence Hoteliers in Mexico report strengthened business travel as more manufacturers relocate operations from an increasingly expensive Asia labor market . On the other hand , drug violence continues to tamp down leisure travel , particularly from Americans . However , Mexico ’ s resort communities
The 207-key Hilton Lima Miraflores debuted in Peru last year .
are statistically some of the safest places to travel in Latin America . “ The promotion of insecurity has pushed away many investors from Mexico , but in general , a foreign investor needs to do their own homework and due diligence ,” says Benjamin Greenberg , a director with Deloitte Mexico ’ s real estate advisory practice .
Because Mexico must count on fewer tourists , developers have turned their focus toward limited-service . “ Developers are not thinking as much about the most extravagant hotel with the most exclusive name , but the hotel that attracts the most Mexican nationals , with appeal to the international traveler ,” Greenberg says . Most major international brands are , in fact , looking to grow in the Mexico , with IHG , Wyndham , Starwood , Hilton and Marriott each having at least 10 hotels under development .
Commercial financing is generally limited in Mexico . Banco Nacional de Comercio Exterior is offering 50 % loan-to-value for properties in the resort corridors , and some regional banks are willing to fund limitedservice developments . Equity and debt financing had dried up for Mexico developers after 2008 , but the situation is changing with the creation of the Mexico equivalent of REITs , known as FIBRAs and structured equity securities known as CKDs . The two big FIBRA players — Monterrey-based Fibra Inn and Mexico City-based Fibra Hotel — are primarily looking to acquire midscale business-class properties , mostly independent hotels and those with national brands , to renovate and reflag for a quick return .
Peru , Chile gain momentum Peru has not received the attention from developers that its 6 % year-overyear economic growth would imply , but a report published this summer by Jones Lang LaSalle Hotels lumps Peru with Brazil , Colombia and Chile as having the region ’ s greatest near-term opportunity . Peru ’ s new government is committed to promoting tourism and foreign investment , giving it the potential to become the region ’ s next hotel hot spot . “ It ’ s not on the scale of Brazil , but we feel very , very strongly about Peru ,” says Hughes , whose company opened the 207-key Hilton Lima Miraflores last year . “
Other projects recently announced for Peru include a 140-key Tryp by Wyndham and a 150-key Courtyard by Marriott , both in Lima , and three Ramadas . Starwood opened Four Points Miraflores in Lima , the brand ’ s debut in Peru , earlier this year .
Investors are upbeat on Chile , which posted an ADR spike of 11 % last year in the capital of Santiago behind a 14 % rise in international arrivals . Enhancing Chile ’ s attractiveness are its loan rates , among the lowest in Latin America at 6 % to 8 %. Investors can borrow up to 70 % of necessary capital with a general repayment time of 10 to 20 years , according to Fernanda L ’ Hopital , managing director of HVS South America .
Accor aims to reach 20 hotels under operation by 2015 in Chile , mostly in Santiago . Meanwhile , Meliá Hotels International is developing five properties under its select-service Innside by Meliá brand in Chile , with the first opening next year in Santiago .
52 HOTELS September 2013 www . hotelsmag . com