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Today we are launching the latest report in our Skift Trends Reports service, A Strategic Deep Dive Into Latin America’s 20 Largest Hotel Chains.
Diversity in operating environments and relative health of markets makes Latin America an attractive yet challenging investment opportunity for hotel groups to navigate. Nimble and effective hotel expansion requires intimate and up-to-date intelligence on competition, market strengths and weaknesses (often down to the city level), investors, among other local dynamics.
In response, this market report profiles the region in the context of the relative size, positioning, and strategic growth initiatives of Latin America’s leading hotel groups, to understand how these players have grown successfully, despite the economic, political and even biological setbacks of recent years.
In fact, many of Latin America’s hotel chains are expanding their footprint in the region. A rising middle class and steady business traveler demand (particularly to secondary cities) are keeping accommodations demand strong enough to keep planned expansion initiatives rolling through a period of economic and political transformation.
Our estimates project that over the next ten years, hotel sector revenues could jump by as much as 60% across the region’s six largest markets, reaching US $27.4 billion in bookings by 2025.
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Note: Estimates factor in the following markets: Argentina, Brazil, Chile, Colombia, Mexico, Peru. Data Sources: Projections were made based on calculations using supply and demand data from Jones Lang LaSalle and STR Inc.
One way to look at the investment potential of Latin America’s lodging industry is in the context of “pockets of opportunity”, spread out across a sizable yet fragmented market landscape with economic, political, and cultural divisions.
Knowing where those pockets are, while adapting strategy according to market dynamics and operating realities on the ground has helped some of the world’s leading hotel chains expand, despite the challenges.
Here we highlight some of the key macro and micro factors driving decisions within the region. We offer an overview of the region’s top 20 hotel groups, accounting for close to 400,000 rooms spread across Mexico, South America, and Caribbean.
Among these include groups like Accor which currently operates 283 hotels in Latin America, totaling close to 47,000 rooms, mostly in Brazil. By 2018, Accor plans to sign another 185 hotels (already contracted), growing their regional footprint by 30% to 65,000 rooms in 180 cities across 12 countries.
We also highlight recent developments with local and regional chains such as Gaviota, Cuba’s government-run hotel group that holds ownership of one third of the island’s inventory; as well as Mexican players such as Grupo Posadas, a key group that owns and or manages 136 hotels across its seven brands.
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