Latin America's hotel construction pipeline stalls in 2017

Sofitel Rio de Janeiro Copacabana is currently undergoing renovations to operate under Accor's Fairmont brand by 2018. (Latin America's hotel project construction numbers reflect those of last year. )

The total construction pipeline in Latin America has 878 hotels and 146,312 guestrooms, the exact same number of projects as last year, according to the latest report from Lodging Econometrics.

There are 418 hotels and 72,690 guestrooms under construction, up 4 percent by hotels year-over-year. The total number of guestrooms scheduled to start construction in the next 12 months is at 211 hotels and 33,542 guestrooms, up 22 percent. Meanwhile, those in the early planning stage are at 249 hotels and 40,080 guestrooms, down 18 percent.

The top hotel companies in Latin America’s construction pipeline by projects are AccorHotels with 150 hotels and 22,136 guestrooms, Marriott International with 94 hotels and 14,880 guestrooms and Hilton Worldwide with 75 hotels and 11,709 guestrooms. The largest brands in the pipeline for each of these companies are Accor’s Ibis with 56 hotels and 7,588 guestrooms, Marriott’s Fairfield Inn with 14 hotels and 2,035 and Hilton Garden Inn with 22 hotels and 3,286 guestrooms.

The top countries in the Latin America construction pipeline are Brazil with 311 hotels and 52,634 guestrooms, Mexico with 197 hotels and 33,569 guestrooms and Colombia with 74 hotels and 10,707 guestrooms. Cities in Latin America with the largest pipelines are Sao Paulo with 38 hotels and 7,026 guestrooms, Campinas, Brazil with 25 hotels and 4,594 guestrooms and Lima, Peru with 24 hotels and 4,073 guestrooms.

So far this year, Latin America has been facing this consistent development stall, which has been attributed to the end of the 2014 FIFA World Cup and the 2016 Olympic Games, Brazil. Data from February 2017 showed that hotel development in Rio de Janeiro alone had 18,760 guestrooms in 133 properties in October 2009. Between June 2013 and June 2014, leading up to the World Cup, Rio’s guestroom stock rose by 5.9 percent to 21,383 guestrooms. Now that those major events have ended, developers are in no rush to construct more hotel properties. Following the end of the games in August, Lodging Econometrics data showed that Brazil had a slowed hotel pipeline totaling 407 properties with nearly 71,000 guestrooms in development. 

While Sao Paulo, Brazil and Lima, Peru were still leading with the most guestrooms in construction, development was still lagging. Sao Paulo recorded 1,205 guestrooms across six projects under construction at the time, and Lima had 1,203 guestrooms and seven hotels under construction.