LE: Mexico, Brazil rep 50% of LatAm hotel pipeline

AC Hotel by Marriott Guadalajara, Mexico
The AC Hotel in Guadalajara, Mexico, is part of Marriott International's growing Latin American footprint. Photo credit: Marriott International

While Mexico and Brazil are setting a strong pace,  the Latin American hotel pipeline is down 8 percent year over year, the third year of decline from its 2015-2016 peak, according to analytics firm Lodging Econometrics.

Data from its latest Latin America hotel construction pipeline trend report shows that pipeline stands at 717 hotels and 123,804 rooms.

There are currently 329 hotels with 57,735 rooms under construction, the report said. Projects scheduled to start construction in the next 12 months stand at 207 hotels and 34,712 rooms and 181 hotels with 31,357 rooms are in the early-planning stage.

Q1 had 29 new hotels and 5,405 rooms open and the team expects another 126 new hotels and 19,687 rooms to open by year's end, and 176 hotels with 28,698 rooms by 2020.

Top Markets

Mexico leads Latin America’s construction pipeline with a record-setting 205 hotels and 34,426 rooms. Next is Brazil, where the pipeline peaked in Q1 2015 at 453 hotels and 79,431 rooms in preparations for the Olympic Games and now stands at 161 hotels and 26,877 rooms. 

These two countries combined account for 50 percent of the total pipeline. 

Colombia follows with 46 hotels and 7,727 rooms, then Peru with 46 hotels and 6,351 rooms. The Dominican Republic is at an all-time high with 34 hotels and 11,226 rooms, a 48 percent increase in hotels, year over year.

Cities in Latin America with the largest pipelines include Lima, Peru with 32 hotels and 4,889 rooms; Mexico City with 25 hotels and 4,309 rooms; Cancun with 19 hotels and 6,379 rooms; Sao Paulo, Brazil with 17 hotels and 2,864 rooms; and Cartagena, Colombia, with 15 hotels and 2,797 rooms. 

LE noted the pipelines in Lima and Cartagena make up 58 percent and 46 percent, respectively, of the cities' existing supply.

Top Companies

Accor is the top hotel franchise company in the region's pipeline with 112 hotels and 15,231 rooms. Marriott International follows with 102 hotels and 16,356 rooms. Last month, the company announced plans to expand its footprint in Mexico more than 50 percent by the end of 2023. The company's pipeline for Mexico now has nearly 50 properties with 8,000 rooms. 

Hilton is at a record high with 80 hotels and 11,904 rooms, and the company is on track to open its 100th hotel in Mexico by 2022. IHG has 52 hotels and 6,525 rooms in development. 

These four companies are responsible for 48 percent of the hotels in the total construction pipeline., according to LE.

The top brands in the pipeline are Accor’s Ibis brands with 73 hotels and 9,408 rooms; IHG’s Holiday Inn Express with 20 hotels and 2,403 rooms; Hampton by Hilton with 20 hotels and 2,368 rooms; and Hilton Garden Inn with 19 hotels and 2,763 rooms. These are followed by Marriott’s Fairfield Inn with 15 hotels and 2,285 rooms and Residence Inn at an all-time high of 10 hotels and 1,442 rooms, noted LE.