by Cheryl-Anne Sturken | August 17, 2012

Waldorf Astoria Panama

In recent years, Asia has been at the top of the calling card for every major hotel company, and the explosion of U.S. brands there continues unabated as the race to plant flags shows no signs of slowing. It isn't the only destination developers have their eye on, though. Latin America has quietly been gaining ground in hotel product as companies turn their attention to expanding their presence in this region, which is priming for some significant upcoming  world events.

Stamford, Conn.-based Starwood Hotels & Resorts Worldwide, which all but steamrolled across China, has made no secret of its bullish strategy on Latin America. The company has 71 hotels in 13 Latin American countries, eight of which opened in the past year, and is eager for more. Two properties are scheduled to open by year's end, both in Panama, and another two are in the pipeline. Leading Starwood's effort is its Westin brand, which now numbers 12  hotels in the region, with Sheraton a distant second. "Latin America is one of Starwood's fastest-growing markets," Trip Barrett, the company's vice president of brand management, told The Hotel Insider. "Peru's economy is one of the fastest-growing in the region, and Panama City has literally transformed into a world-class global city right before our eyes." Indeed, that nation is gearing up for 2014, when the Panama Canal celebrates its 100 anniversary with the unveiling of a new $5.25 billion expansion.
Other U.S. hotel companies have their own aggressive expansion strategies. Both Hyatt and Hilton have said Latin America is a major focus for growth. In 2015, the 250-room Hyatt Regency Cartagena will open in Colombia, becoming the brand's first hotel in that country. Among the eight deals Hyatt has announced in the past few months, six are in Mexico and one is in Chile. By the end of next year, Hilton Worldwide is projecting it will have 60 properties in the region, including four in Panama and three in Argentina. Scheduled to open in the next two months is the company's first Waldorf Astoria in Latin America, the 248-room Waldorf Astoria Panama, which originally was slated to be called The Panamera. Just weeks ago, Hilton announced the name change: "Placing the brand prominently at the front of the hotel name reinforces our commitment to deliver unparalleled service and quality," said Danny Hughes, senior vice president of Hilton Worldwide's Caribbean, Mexico and Latin America operations, in a statement.

According to the June 2012 STR Global Construction Pipeline Report by Smith Travel Research, Central and South America have 227 hotels in the development pipeline, representing a total of 32,242 rooms. In fact, hotel performance in some Latin America cities is decidedly better than in Europe. According to a report issued this week by Hogg Robinson Group, while global corporate hotel room rates declined in 24 of the top 50 destinations and increased a mere 1 percent in another 23, Rio de Janeiro and Sao Paulo in Brazil both posted double-digit increases in room rate. And with major events like the FIFA World Cup coming to Brazil in 2014, followed by the Summer Olympics in 2016, it is expected that room demand will outpace supply, unless hotel companies continue to step up their development.