Latin America hotel development continues slowdown

Novotel Marumbi Hotel, Sao Paulo, Brazil. Photo credit: AccorHotels Group

Latin America's total hotel construction pipeline dropped to its lowest number of projects since the fourth quarter of 2013, according to a report from Lodging Econometrics. 

The pipeline began a cyclical decline following its peak between 2015 and 2016. Hotel project numbers in the region currently stand at 750 with 129,351 guestrooms.

Brazil, which accounts for more than half of Latin America's pipeline, is experiencing the most significant decline in hotel development. The country's pipeline has 212 projects with 34,559 guestrooms, falling from its peak at 453 projects with 79,431 guestrooms in first-quarter 2015. Panama, Argentina and Jamaica also are experiencing declines in hotel development albeit at a lesser degree. 


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Latin America has 363 hotel projects with 63,607 guestrooms under construction, 207 with 32,305 guestrooms are scheduled to start construction in the next 12 months. Meanwhile, the region has 180 projects with 33,439 guestrooms in the early planning stage. 

A total of 94 projects with 16,024 guestrooms started construction in the first half of 2018. The number of new projects added to the pipeline during this period decreased 38 percent from 177 projects with 28,533 guestrooms recorded in last year’s first half. Brazil recorded a total of 114 newly added hotel projects with 17,595 guestrooms during the first half of this year. 

The first half of 2018 also saw the lowest number of hotel openings since the same period in 2014, which had 59 new hotel openings. LE predicts the second half of 2018 will fare better, with another 106 hotel openings set to increase the total to 167 hotels by end of the year. 

The number of new hotel openings this year will be less than the 180 recorded in 2017 and 187 in 2016. However, 2019 will see a slight increase in hotel openings to 182 before dropping to 168 in 2020, according to the LE data.

Brazil secures hotel construction lead despite decline

Brazil leads Latin America's total construction pipeline with 212 hotels projects and 34,559 guestrooms. Mexico follows with 180 hotel projects and 33,071 guestrooms. 

Colombia is in third place with 63 hotel projects and 9,623 guestrooms. Peru, which has the fourth largest pipeline in the region, reached its all-time high of 47 hotel projects and 6,843 guestrooms.

Meanwhile, Argentina's pipeline dropped to its all-time low with 29 hotel projects and 2,776 guestrooms. The Dominican Republic follows Argentina with 26 hotel projects and 9,452 guestrooms. 

Cuba has a development pipeline of 26 hotel projects with 8,643 guestrooms while Chile's pipeline has 21 hotel projects with 3,607 guestrooms for the region. 

AccorHotels leads Latin America's hotel development

AccorHotels Group has the largest construction pipeline in Latin America totaling 112 hotel projects with 16,223 guestrooms. Marriott International's pipeline comes in second with 95 hotel projects and 15,125 guestrooms. 

Hilton follows in third with 76 hotel projects and 11,851 guestrooms—an all-time high for the company in Latin America. IHG completes the list with 47 hotel projects and 5,933 guestrooms in the pipeline. 

The pipelines of these four companies account for 44 percent of all projects in the entire pipeline for Latin America. LE forecasts that AccorHotels, Marriott International, Hilton and IHG will have the highest number of hotel openings in the pipeline during 2019 and 2020.  

In terms of hotel chains, AccorHotels' Ibis and Novotel brands have the largest pipelines in the region. The Ibis brands have 79 hotel projects and 10,501 guestrooms while Novotel has 12 hotel projects and 2,034 guestrooms. Hilton’s Garden Inn and Hampton Inn brands follow with 20 projects (2,877 guestrooms) and 17 projects (2,087 guestrooms), respectively. 

IHG’s Holiday Inn Express brand has a pipeline of 19 hotel projects with 2,320 guestrooms while the Holiday Inn brand has 11 projects with 1,537 guestrooms in the pipeline. Marriott International’s Marriott Hotel, Courtyard and AC Hotel brands round out the list. Latin America's development pipeline has 11 Marriott Hotel projects with 2,191 guestrooms, 11 Courtyard by Marriott projects with 1,644 guestrooms and 10 AC Hotel by Marriott projects with 1,701 guestrooms.

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