Hilton has expanded its Latin America footprint, adding nine hotels in with new deals signed in Central America.
The company was not alone, with Carlson Rezidor describing the region as “dynamic” with the opening of its first hotel under the Radisson Red brand in Latin America.
Hilton has signed a pipeline of nine hotels across five countries and representing five brands: Hilton Hotels & Resorts, Curio Collection by Hilton, DoubleTree by Hilton, Hilton Garden Inn and Hampton Inn by Hilton. The nine projects will deliver approximately 1,300 rooms, representing more than 10% of the company’s pipeline of approximately 11,300 rooms in Latin America, where Hilton has more than 70 properties under development.
“Our team’s strategic focus on growing our presence in key Latin American markets and an increase in demand across Central America have contributed to our substantial growth in the region,” said Juan Corvinos, managing director of development, Mexico, Central America, Andean region and Hispanic Caribbean for Hilton.
The company said that it was committed to expansion in the region with management and franchise agreements, including new builds and conversions.
The deals came as Carlson Rezidor Hotel Group opened the Radisson Red Campinas, a 185-room property located outside of Brazil’s most populous city. Atlantica Hotels International will operate the property, which also operates the Radisson Blu, Radisson and Park Inn by Radisson in the country.
Ken Greene, president, Americas, Carlson Rezidor Hotel Group, said: “The region is still a very dynamic place for the hospitality industry and after years of growth and development in the upper-upscale segment, the focus is now shifting to select-service concepts making Red an ideal fit.”
Greene said that the company was in advanced discussions for several projects in key cities, including Lima, Montevideo and Bogota.
Hyatt Hotels Corporation also announced that a franchise agreement with Talbot Hotels for two Hyatt Centric hotels, in Lima and Santiago. Expected to open in early 2018, the two hotels will mark the introduction of the Hyatt Centric brand to Peru and Chile.
“Santiago and Lima are two of the main gateway cities in Latin America, and we are confident Hyatt Centric San Isidro Lima and Hyatt Centric Las Condes Santiago will deliver on the brand’s commitment to put guests in the middle of the action and inspire them to explore these dynamic capital cities,” said George Vizer, VP franchise operations, Hyatt.
Hotels in the Central and South America region reported positive results in the three key performance metrics during July 2017, according to data from STR, with occupancy up 3.2% to 58.1%, with ADR increasing by 0.2% to USD97.86 and revpar up 3.5% to USD56.83.
Argentina reported its highest occupancy level for July since 2011, with occupancy up 8.6% to 62.3%, with ADR up 25.6% and revpar up 36.5%. According to STR analysts, an increase in flight options to the country and South America as a whole should continue to help the market’s hotels. Buenos Aires recorded a 14.2% lift in demand for July, its third consecutive month of double-digit demand growth.
Chile was also strong, with revpar up 5.1%. Performance was driven primarily by weekend business, with occupancy up 5.7% compared with a 2.9% increase for weekdays, indicating uplift in leisure bookings. Through the first seven months of the year, the country’s ADR was down 5.7%, in line with a weakened economy due to a drop in the global price of copper. STR analysts noted that Chile’s economy was expected to gain momentum in the second half of 2017, with a recovery in mining investment. The country currently has 22 hotel projects in the pipeline, accounting for 3,325 rooms.
July marked Colombia’s second month of revpar growth in 2017, including a 9.1% increase in May. The market has experienced a last-minute influx in supply development as the government’s tax break window for hotels built between 2003 and 2017 draws to a close. STR analysts note that the country’s June peace settlement with the Farc rebels could help stimulate hotel demand in the long term.
Despite the rise in performance, STR reported that the region’s pipeline had fallen, by 7.8% year-on-year in July. Among the chain scale segments, the Upper Upscale segment accounted for the largest portion of rooms under contract.
HA Perspective [by Katherine Doggrell]: The dynamism of Latin America is sparking enthusiasm for franchises, with the global operators all dabbling a toe. In keeping with, say, Africa, it is pointless to treat the whole region as one lump, it is more of a roulette wheel, with growth seemingly changing with every spin of the wheel. The ball stops in Argentina at the moment, having previously graced Brazil. Staying largely asset-light remains the sanguine choice.
The current issues to watch are the oil prices, flighty local politics in country’s such as Brazil and Venezuela and, of course, the overarching issue which threatens much of global tourism – where Donald Trump’s ire will alight next. Cuba in particular is confused after Trump announced that he was “cancelling the last administration’s completely one-sided deal with Cuba”. Like a boyfriend jealous of the preceding incumbent, countries who were friends with Barack Obama may be waiting a while for invitations to the party.
What is in evidence as the brands proliferate is that the general moving upwards of the region’s economies is sparking a move down the chain scales, as there is more domestic travel. Making sure that the full branded estate is represented is the order of the day.