Arturo García Rosa, president and founder of SAHIC, interviews Christopher Nassetta, president and CEO of Hilton Worldwide, at SAHIC 2016 in Guayaquil, Ecuador. Photo by Michael J. Shapiro.
Hoteliers still consider Latin American expansion a priority, the lodging giants confirmed at SAHIC 2016, the South American Hotel and Tourism Investment Conference currently taking place in Guayaquil, Ecuador. Despite the economic uncertainty and political turmoil occurring in primary markets such as Argentina and Brazil, executives remain bullish.
"Over the past five years, we've tripled our presence in Latin America," noted Hilton Worldwide president and CEO Christopher Nassetta in a keynote address at the conference. Hilton is on target to open its 100th hotel in the region this year, after opening about 20 properties over the past 12 months.
"We've had a record-breaking year for ourselves," said Ted Middleton, Hilton's senior vice president of development in Latin America. "In the past 12 months we've approved 30 new deals, and we did it despite economic headwinds we're experiencing there, whether it's due to political situations, economic situations, low-commodity prices... There's quite a few challenges, but we continued to experience strong growth in the region." Hilton now has more than 50 projects in the regional pipeline.
The region is seeing a lot of interest in the midscale market, in part due to growth happening in suburban areas and secondary markets. In many cases, those midscale properties will provide meeting space. "Typically for Hilton Garden Inn, what we have done is added meeting space to those projects -- so they're not just a drive-in hotel, but a place where people gather for regional meetings," explained Hilton's Tom Potter, senior vice president for operations in Latin America and the Caribbean.
Marriott International's presence in the region grew exponentially last week, when the company acquired Starwood. "We went from having 28,000 rooms in the region to 49,000, which is about a 75 percent increase," said Laurent De Kousemaeker, Marriott's chief development officer for the Caribbean and Latin America. "In South America alone, our footprint increased from 29 to 74 hotels, about two and a half times what we offered previously."
Although Marriott's Latin American growth had been moving at a more rapid clip than Starwood's, De Kousemaeker added, Starwood was there first. In Argentina, for example, Sheraton has strong loyalty while Marriott hasn't had a presence in the country for more than a decade. "So we're inheriting that strong brand preference," said De Kousemaeker. "That's exciting."
InterContinental Hotels Group, meanwhile, has 40 hotels in the pipeline for Mexico, Latin America and the Caribbean, representing about 6,000 rooms. While much of the growth is taking the form of midscale brands such as Holiday Inn and Holiday Inn Express, the more meetings-focused Crowne Plaza flag has three Latin American properties scheduled to open; and InterContinental and Kimpton hotels will be opening soon in the Caribbean.
Last year, Wyndham Hotel Group broke its own record for the region, opening 38 hotels for a total of 5,089 rooms -- a 90 percent year-over-year increase. In the process, the company introduced the Wyndham brand to Brazil and Argentina, and the Tryp by Wyndham flag to Mexico and Puerto Rico.
Many of the hotel companies represented cited Mexico, Colombia, Peru and Chile as areas of particular growth in Latin America, with increasing attention paid to Brazil and Argentina as those countries emerge from economic difficulties. Brazil in particular has become an attractive destination for hotel companies seeking conversion opportunities, lending hotel branding power and backing to underperforming properties.