SPRING
2014
Latin America
Lodging Real Estate Trends – Executive Summary

Upward trend continues. Brazil & Mexico lead pipeline.

The Construction Pipeline growth in Latin America continues its upward trend and now stands at 788 Projects/127,550 Rooms, up 14% Year-Over- Year (YOY) by Projects and Rooms. The Pipeline is 74% higher than its Q1 2010 cyclical low mark.

Projects Under Construction are at 394 Projects/67,133 Rooms, up 18% and 22% respectively YOY. Construction Scheduled to Start in the Next 12 Months, 169 Projects/26,690 Rooms, is up 20% by Projects and 12% by Rooms YOY. Early Planning has also increased 4% by Projects and 2% by Rooms.

South America tops the region’s Pipeline with 534 Projects/85,644 Rooms, followed by the Caribbean’s 66 Projects/12,516 Rooms, and Central America with 50 Projects/9,250 Rooms.

Top Countries
The top five countries in the Latin American Pipeline are Brazil with 408 Projects/69,023 Rooms, Mexico 138 Projects/20,140 Rooms, Argentina 40 Projects /4,231 Rooms, Colombia 39 Projects /6,406 Rooms, and Panama 28 Projects/5,538 Rooms. These five countries represent 83% of the entire Latin American Pipeline.

Brazil has the third largest Pipeline in the world, trailing only the United States and China. The upcoming World Cup this year and the 2016 Summer Olympics in Brazil has propelled growth in hotel development. Brazil’s supply of open and operating hotel rooms has been mounting in recent years and currently stands at 218,658 Rooms, up 12% from five years ago.

Ten of the 15 Latin American markets with the largest pipelines are in Brazil. Eight of those 10 markets will participate in hosting this summer’s World Cup, including Rio de Janeiro, which has the largest pipeline of any city. With 45 Projects/9,577 Rooms it represents 8% of the total Pipeline in Latin America by rooms.

Mexico has the second largest pipeline in the region and leads all countries in YOY growth, up 60% by projects and 82% by rooms. Mexico recently launched a new REIT-like investment structure that provides tax advantages for new investors making for an easier exit strategy for developers. This new framework has attracted more cross-border real estate investment dollars and has also helped fuel the country’s construction pipeline.

Panama currently has 47 open and operating hotels and 28 projects in the Construction Pipeline. When the current Pipeline comes to fruition Panama’s Census count of open hotels will increase by almost 50%.

Chain Scales & Leading Brands
Three chain scales represent 77% of the Total Pipeline by Projects: Upscale 222 Projects/37,860 Rooms, Upper Midscale 175 Projects/25,553 Rooms, and Midscale with 199 Projects/25,905 Rooms. As of Q1 2014 76% of all Pipeline projects have already selected a brand.

Smaller hotels generally with less than 200 rooms, account for 80% of the projects in the Pipeline. They typically move through the local permitting process faster than larger projects and also have shorter time-lines to plan and build.

Accor is the biggest franchisor in the region with 110 Projects/17,891 Rooms. Accor’s three Ibis brand extensions account for 81 Projects/12,505 Rooms, a surprisingly high 10% of the region’s entire Pipeline.

Intercontinental Hotels Group is second in the region with 63 Projects/8,811 Rooms. Its leading brand is the Upper Midscale Holiday Inn Express with 29 Projects/3,781 Rooms. Choice Hotels rounds out the top three franchise companies in Latin America with 48 Projects/7,073 Rooms. Their leading brand is the Upper Midscale Comfort Inn & Suites, with 24 Projects/3,629 Rooms.

Order the complete Latin America Construction Pipeline Trend Report or a Market Trend Report for any individual market.

LE’s Construction Pipeline Trend Report for Latin America presents an unmatched review of lodging real estate and development activity. Ideal for monitoring development growth trends, the report contains current and comprehensive views of the Construction Pipeline by Project Stage (Early Planning, Scheduled to Start in the Next 12 Months and Under Construction), LE’s Proprietary Three-Year Forecast for New Hotel Openings, current counts for Open & Operating Hotels (Census) and New Hotel Openings for the previous two years.

An LE Market Trend Report for any Individual Market will supply you with every lodging real estate fact needed about a particular market. Reports provide a summary of the Construction Pipeline as well as contain individual Hotel Records with full details on New Construction Projects, Brand Conversions, Announced Renovations, and Open & Operating Hotels (Census).

To order LE’s Construction Pipeline Trend Reports for Latin America, or an individual Market Trend Report for a particular market, updated quarterly, please call +1 603-431- 8740, ext. 25, fill out the following inquiry form or email info@lodgingeconometrics.com for more information.

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