LE: Latin America reports development uptick in Q2

According to the recent "Latin America Construction Pipeline Trend Report" from Lodging Econometrics, the region’s total construction pipeline has 555 hotels and 90,496 rooms as of Q2 2022.

Following nearly two years of pandemic-driven uncertainty, the hotel industry in Latin America is finally showing some signs of recovery, the report found. Consumer confidence has risen as border restrictions and quarantine requirements across the region and air passenger traffic to Latin American countries has increased substantially compared to numbers recorded in the second quarter of 2021.

In the first half of 2022, 40 hotels and 8,481 rooms began construction in the region. New project announcements in the second quarter were up 57 percent by projects year over year at 36 hotels and 6,208 rooms.

Latin America has 254 hotels and 46,670 rooms under construction. Projects scheduled to start construction in the next 12 months are at 158 hotels and 23,371 rooms and projects in early planning are at 143 hotels and 20,455 rooms. The early-planning stage of the pipeline in Latin America is the only stage with growth, up 43 percent by projects and 26 percent by rooms year over year.

Top Markets

Mexico led Latin America’s construction pipeline at Q2 with 211 hotels and 34,509 rooms. Next is Brazil, which stands at 89 hotels and 14,471 rooms. These two countries account for 67 percent of the projects in the total pipeline. Following Brazil is Peru with 29 hotels and 3,669 rooms, then the Dominican Republic, with 24 hotels and 5,563 rooms, and then Colombia with 19 hotels and 2,936 rooms.

Cities in Latin America with the largest pipelines at Q2 include Mexico City, Mexico, with 26 hotels and 3,371 rooms; Guadalajara, Mexico, with 21 hotels and 2,595 rooms; Cancun, Mexico, with 19 hotels and 8,379 rooms; Lima, Peru, with 18 hotels and 2,567 rooms; and São Paulo, Brazil, with 11 hotels and 2,101 rooms.

Top Companies, Top Brands

At the close of the second quarter, the top hotel franchise companies in Latin America’s construction pipeline are Marriott International with 105 hotels and 17,559 rooms, followed closely by Hilton with 100 hotels and 14,166 rooms. Next is Accor, with 80 hotels and 10,274 rooms, and then IHG Hotels & Resorts, with 59 hotels and 6,828 rooms. These four companies are responsible for 62 percent of the projects in the total construction pipeline.

The largest brands in the pipeline for each of these companies at the end of the quarter are Accor’s Ibis brands with 53 hotels and 6,678 rooms, Hilton’s Garden Inn with 25 hotels and 3,271 rooms, Holiday Inn Express by IHG with 13 hotels and 1,538 rooms, and Marriott Hotels with 12 hotels and 3,011 rooms.

In the first half of 2022, 38 new hotels with 6,961 rooms opened across Latin America. The LE forecast for new hotel openings calls for another 72 new hotels to open in the second half of the year bringing the total to 110 by the year-end. In 2023, LE analysts are forecasting 108 hotels and 19,637 rooms to open in the Latin America region. In 2024, LE’s forecast for new openings is expected to increase to 129 new hotels with 17,494 rooms forecast to open.