Lodging Econometrics' Q221 Latin America Hotel Construction Pipeline Trend Report” that the total construction pipeline stands at 586 hotels with 103,011 rooms, down 14 percent by projects and 13 percent rooms, year over year. This is the lowest number of hotels in the Latin America construction pipeline since the first quarter of 2012.
In the first half of the year, 47 hotels with 11,657 rooms began construction in the region. New projects announced into the pipeline during the first two quarters of 2021 are down 61 percent year over year with only 53 projects and 9,537 rooms compared to the 87 hotels and 10,487 rooms announced in the first two quarters of 2020.
At the end of the second quarter, projects under construction stand at 314 hotels with 59,273 rooms, down 9 percent by hotels and 4 percent by rooms year over year. Projects scheduled to start construction in the next 12 months have experienced the sharpest decline, down 20 percent by hotels and 30 percent by rooms year over year, closing the second quarter at 156 hotels with 25,536 rooms. Projects and rooms in the early planning stage also experienced a decline year over year, dropping 17 percent and 12 percent, respectively, and settling at 116 hotels with 18,202 rooms.
Data Dive
Latin American countries with the most projects in the total construction pipeline are led by Mexico with 209 hotels with 37,597 rooms. Brazil follows with 109 hotels and 16,977 rooms, a cyclical low for the country. Following Brazil, Peru closed the second quarter of 2021 with 37 hotels and 4,788 rooms, the Dominican Republic with 21 hotels and 4,909 rooms, and Columbia with 20 hotels and 3,174 rooms. Together, these five countries account for 68 percent of projects in the total pipeline.
Markets in Latin America with the largest pipelines include Lima, Peru, with 27 hotels and 3,862 rooms; Mexico City, Mexico, with 25 hotels and 3,616 rooms; Guadalajara, Mexico, with 19 hotels and 2,679 rooms; Cancun, Mexico, with 18 hotels and 9,510 rooms; and Sao Paulo, Brazil, with 15 hotels and 2,726 rooms.
The top hotel franchise companies in Latin America’s construction pipeline at the end of the second quarter of 2021 are:
- Marriott International with 100 projects and 16,032 rooms
- Hilton Worldwide with 99 projects and 15,763 rooms, an all-time high for Hilton in the region
- Accor with 94 projects and 12,328 rooms
- InterContinental Hotels Group with 57 projects and 6,518 rooms
- Hyatt Hotels Corporation with 18 projects and 2,880 rooms
These five companies make up 63 percent of hotels in the total construction pipeline and are forecast to see the highest number of new hotel openings in 2022 and 2023.
Leading brands in the pipeline are:
- Accor’s Ibis brands with 66 projects and 8,501 rooms
- Hilton Worldwide’s Hilton Garden Inn with 26 projects and 3,536 rooms
- Hampton Inn by Hilton with 22 projects and 2,653 rooms
These are followed by IHG’s Holiday Inn Express with 15 hotels and 1,828 rooms and its Avid brand with 12 hotels and 1,282 rooms. Marriott’s Fairfield Inn closed the quarter standing at 12 hotels with 1,724 rooms.
In the first half of 2021, Latin America had 36 new hotels open, accounting for 6,489 rooms. The LE forecast for new hotel openings during the second half of the year calls for another 55 new hotels with 9,517 rooms to open, bringing the total to 91 hotels with 16,006 rooms by year-end. The forecast for 2022 shows a slight increase to 112 new hotels with 19,701 rooms and another increase is expected in 2023, with 128 hotels and 20,809 rooms.