According to the Q3 2021 Latin America Construction Pipeline Trend Report from Lodging Econometrics, the total construction pipeline stands at 577 hotels and 103,648 rooms. The region’s pipeline project counts are down 14 percent and room counts are down 11 percent year over year.
Projects under construction at the end of Q3‘21 stand at 304 hotels and 60,048 rooms, down 12 percent by projects and 2 percent by rooms year over year. Projects scheduled to start construction in the next 12 months stand at 155 hotels and 24,959 rooms, down 17 percent and 28 percent respectively, and those in the early planning stage are down 16 percent by projects and 11 percent by rooms year over year, settling in at 118 hotels and 18,641 rooms.
Border closures, travel restrictions, and fluctuating cases of COVID-19 and its variants throughout the region have forced the hospitality industry in Latin America to rely largely on domestic demand over the past 18 months. However, as vaccine rollouts increase and travel restrictions are loosened, international travel demand is likely to increase in the region. Many of the larger international hotel companies are poised to take advantage of this increased interest in travel to Latin American countries like Brazil, Argentina, Chile, Columbia, Mexico, and other areas in the Caribbean, as they market their resort and all-inclusive options. Notably, 33 percent of the pipeline in Latin America is slated for resort locations.
Top Markets
The top countries in the Latin America construction pipeline at Q3 are led by Mexico with 204 hotels and 36,873 rooms, accounting for 35 percent of projects and 36 percent of room counts in the region’s total pipeline. Next is Brazil with 112 hotels and 19,075 rooms, then following distantly is Peru with 33 hotels and 4,140 rooms, the Dominican Republic with 22 hotels and 5,132 rooms, and Colombia stands at 19 hotels and 2,997 rooms.
Cities in Latin America with the largest pipelines by rooms include Mexico City with 24 hotels and 3,444 rooms; Lima with 23 hotels and 3,214 rooms; Guadalajara with 18 hotels and 2,416 rooms; Cancun with 17 hotels and 9,402 rooms; and Sao Paulo with 16 hotels and 3,071 rooms.
Top Companies and Brands
At the end of the third quarter, the top hotel franchise companies in the region’s construction pipeline by projects are led by Hilton, with peak project and room count totals of 105 hotels and 16,477 rooms. Marriott International follows with 100 hotels and 15,912 rooms. Next is Accor, at 86 projects with 11,019 rooms, and IHG with 57 hotels and 6,591 rooms. These four companies account for 60 percent of the projects in the total Latin America construction pipeline.
Leading brands in the pipeline are Accor’s Ibis brand with 58 hotels and 7,372 rooms, Hilton Garden Inn with 26 hotels and 3,536 rooms, and Hampton by Hilton with 22 hotels and 2,669 rooms. Following these brands are IHG’s Holiday Inn Express with 14 hotels and 1,702 rooms, and IHG’s Avid Hotel brand with 12 hotels and 1,282 rooms.
Through the first three quarters of 2021, 60 new hotels with 10,337 rooms opened in Latin America. Of those, 23 hotels with 3,408 rooms opened in Q3 alone.
The LE forecast for the remainder of the year shows another 34 new hotels with 7,068 rooms scheduled to open, totaling 94 new hotels with 17,405 rooms opened by year-end. In 2022, LE’s forecast for new openings is expected to rise to 114 new hotels with 20,366 rooms in 2022 and again in 2023, to 135 new hotels with 21,186 rooms.