Destinations Asia

Latin America is better than Asia for fast expansions, say hotel execs

@SamShankman

Jun 04, 2013 12:59 am

Skift Take

All global players have their sights set on long-term growth in China and India, but groups should focus short-term efforts on meeting the rising demand in smaller markets of South America and Southeast Asia.

— Samantha Shankman

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Hotel executives from major U.S. hotel chains challenged the popular idea that Asia is the hub of hospitality growth in Monday’s panel “The CEOs Check In” at the NYU Hospitality Conference.

“China and India are 10 to 30-year markets. There are other places are going to become much more of a focus over the next decade,” said Hilton Worldwide CEO Christopher Nassetta.

All hotel executives agreed that there were better opportunities for faster growth and profitability in Latin America. The largest obstacles to entry in the region are a lack of local infrastructure and the ability to develop supply quickly enough to keep up with demand.

“Latin America shows good opportunity from an owner’s perspective versus China and India,” said W. Edward Walter, CEO of Host Hotels & Resorts. Walter noted that he was nervous to invest more in India after watching a declining trend in demand.

If ownership works in Latin America, conversions are the key to growth in Asia and Europe. Varying sizes, standards, and locations of hotels in both regions make it difficult to own the market, which is why hotel groups like Choice Hotels see branding as the fastest vehicle to growth.

Choice’s expansion strategy is hinged on such conversions. There is “opportunity in the branding of that market,” said Choice CEO Stephen Joyce.

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