Research

Travel and tourist
arrivals in Latin
America growing
rapidly - hotel
growth responds

Travel and tourist arrivals in Latin America to reach 81.6 million by 2028, growing at an average of 4.8% per year

This edition of Hotel Destinations Latin America publication, an annual overview providing a snapshot of key and emerging hotel markets across the continent, includes a selection of notable hotels trends, recent transactions, upcoming new projects and a summary of key  market statistics for each destination.

Regional Summary highlights

2018 was characterized as a transitional year for the region: Uncertainty surrounding presidential initiatives but most economies are starting to forecast a positive economic outlook

Rise in intraregional travel: Devaluation of regional currencies against the US dollar, rising middle class families and first-time travelers, and low-cost regional airlines contribute to growth in intraregional travel

Infrastructure improvements to bolster destination’s growth: Airport expansion plans and private investments in other transportation- and real estate-related infrastructure accelerates growth in the mid- to long-term

Political and macroeconomic uncertaintly in Mexico and Argentina in 2019: Upcoming elections in Argentina, rising inflation and interest rates, contraction in the economy, and diverging political views, are impacting the overall economic outlook in Argentina. In Mexico, uncertainty around new administration is causing concern about major project cancellations


Region at a glance

Supply, Demand, Outlook in LATAM

Bogotá

Bogotá continues to outperform its regional counterparts following the 2018 presidential elections and growing recognition as a preferred destination for business activity and meetings. The election of Iván Duque Márquez as Colombia’s new president sent positive signals to domestic and international investors, and this city is anticipated to continue posting record visitor arrivals year-over-year. Moreover, Bogotá continues to emerge as a cultural destination given growth and diversity in business and leisure tourism product offering – world-class museums, recently inaugurated convention center, dining, and retail. With ongoing infrastructure and tourism product improvements city-wide, prospects for Bogotá’s hotel and hospitality sector looks positive.

New hotels

410 rooms: Hilton Bogotá Corferias (Open - April 2019)
83 rooms: AC Hotels by Marriott Bogotá (2019)
142 rooms: Hyatt Place Bogotá Salitre (2019)
126 rooms: Residence Inn Bogotá (2019)
32% Incoming upper upscale / luxury supply (2019+) = 400 rooms


Note: Figures rounded to the nearest hundred (total rooms). New supply data excludes
abandoned and deferred projects as of February 2019.
* JLL-led transaction


Quick facts

4.5M

International air arrivals (YE 2018)

 

 

1,300

New hotel rooms expected (2019+)

 

 

56.8%

Average occupancy for 2018

 

 

$90.63

Average rate for 2018 (USD)

 

 

$51.47|2.7%

2018 YE RevPAR + % change v. YE 2017 (USD)

 

 

Source: CITUR, STR, STR pipeline as of Feb 2019, JLL, ICCA, Oxford Economics
Notes: ICCA = International Congress & Convention Association; RevPAR = Revenue per Available Room;
YTD = Year-to-Date

Buenos Aires

Buenos Aires continues to thrive in the tourism and lodging sector given its strong international positioning as a preferred destination for meetings and conventions and diverse historic and cultural tourism product offering. With improved growth in international visitation and sustained growth in occupancy levels year-over-year, Buenos Aires continues to attract high-rated leisure demand from key feeder markets worldwide. A highly-educated workforce and strong business activity around the technology sector, driven largely by recent improvements in regulation and overall ease of doing business (e.g. Entrepreneur’s Law), has also positioned Buenos Aires in the heart of a growing entrepreneurial/start-up tech scene in the region. A potential impediment for tourism demand growth in Buenos Aires would be the effect of upcoming presidential elections in Argentina, may slow down economic activity in 2019, partly due to the generally polarized political sentiment nationwide. 

New hotels

94 rooms: Ibis Styles (2019)
118 rooms: Sheraton Greenville Polo & Resort (2020)
72 rooms: Hampton by Hilton Buenos Aires Parque Leloir (2022)
42% Incoming upper upscale/luxury supply (2019+): 100 rooms
Recent transactions: Sheraton Hotel & Park Tower, a Luxury Collection* 920 rooms | 2018 Price: ~$100M


Note: Figures rounded to the nearest hundred (total rooms). New supply data excludes
abandoned and deferred projects as of February 2019.
* JLL-led transaction


Quick facts

2.5M

International air arrivals (YE 2018)

 

 

300

New hotel rooms expected (2019+)

 

 

69.7%

Average occupancy for 2018

 

 

$140.51

Average rate for 2018 (USD)

 

 

$97.88|12.9%

2018 YE RevPAR + % change v. YE 2017 (USD)

 

 

Source: CITUR, STR, STR pipeline as of Feb 2019, JLL, ICCA, Oxford Economics
Notes: ICCA = International Congress & Convention Association; RevPAR = Revenue per Available Room;
YTD = Year-to-Date

Lima

Similar to other markets in the region, Lima’s economic growth, while still positive, has slowed in recent years, and, along with the material increase in hotel room supply, overall industry performance has remained subpar. While the steady decline in RevPAR is attributable to a material influx of supply over the past three years, demand levels continue to strengthen. Lima continues to be among the region’s most prominent business and leisure destinations, which can be attributed to its vibrant and growing cultural and gastronomic tourism offering, as well as the presence of major multinational companies serving Peru and the broader Andean region. This positioning should be further strengthened by its new convention center, significantly improved air accessibility, and enhanced port infrastructure. Altogether, these recent infrastructure improvements should aid in the absorption of new hotel supply and, in the mid- to long-term, allow Lima to regain its strength as one of the top industry performers in the region. 

New hotels

150 rooms: AC Hotel by Marriott Lima Miraflores (2019)
148 rooms: Hampton by Hilton Lima San Isidro (2019)
200 rooms: Holiday Inn Lima Miraflores (2019)
90 rooms: Ibis Styles Benavides (2020)
101 rooms: Radisson RED Lima (2020)
23% Incoming upper upscale / luxury supply (2019+) = 900 rooms


Note: Figures rounded to the nearest hundred (total rooms). New supply data excludes
abandoned and deferred projects as of February 2019.
* JLL-led transaction


Quick facts

5.9M

International air arrivals (YE 2018)

 

 

4,200

New hotel rooms expected (2019+)

 

 

65.2%

Average occupancy for 2018

 

 

$134.35

Average rate for 2018 (USD)

 

 

$87.56|-6.7%

2018 YE RevPAR + % change v. YE 2017 (USD)

 

 

Source: CITUR, STR, STR pipeline as of Feb 2019, JLL, ICCA, Oxford Economics
Notes: ICCA = International Congress & Convention Association; RevPAR = Revenue per Available Room;
YTD = Year-to-Date

Mexico City

Mexico City continues to be the political and economic epicenter of the country, representing 27% of the country’s GDP. With the largest concentration of office real estate in the nation, Mexico City has been named by the World Bank as the best destination for doing business in Latin America. Meanwhile, Mexico City’s strengthening reputation as a vibrant cultural destination has increasingly attracted international visitors and generated new weekend leisure demand over the past few years. Although the presidential election of Andrés Manuel López Obrador in 2018 was initially well-received by some domestic and international stakeholders, recent announcements around the new government’s policies and actions, such as the cancellation of the US$18 billion project for the new Mexico City International Airport, have generated uncertainty among investors; thus, experts have revised the nation’s economic growth expectations for 2019 – 2021 downward. Mexico City, however, continues to exhibit strong lodging fundamentals based on a diversified demand base and growth in overall visitation, which should continue to make it a solid industry performer in the region.

New hotels

59 rooms: Umbral Curio Collection by Hilton (2019)
275 rooms: Sofitel Mexico City Reforma (2019)
34 rooms: Hotel Lafontaine Curio Collection by Hilton (2019)
168 rooms: Novotel Mexico City Forum Naucalpan (2020)
153 rooms: Ritz-Carlton Mexico City (2020) 
59% Incoming upper upscale / luxury supply (2019+) = 2,700 rooms
Recent transactions: JW Marriott Mexico City* 312 rooms | 2018 Price: $183M, Hyatt Regency Mexico City 755 rooms | 2018 Price: Confidential, W Hotel Mexico City 237 rooms | 2018 Price: Confidential
 


Note: Figures rounded to the nearest hundred (total rooms). New supply data excludes
abandoned and deferred projects as of February 2019.
* JLL-led transaction


Quick facts

8.7M

International air arrivals (YE 2018)

 

 

4,500

New hotel rooms expected (2019+)

 

 

68%

Average occupancy for 2018

 

 

$122.32

Average rate for 2018 (USD)

 

 

$83.18|1.3%

2018 YE RevPAR + % change v. YE 2017 (USD)

 

 

Source: CITUR, STR, STR pipeline as of Feb 2019, JLL, ICCA, Oxford Economics
Notes: ICCA = International Congress & Convention Association; RevPAR = Revenue per Available Room;
YTD = Year-to-Date

Santiago

Santiago, which accounts for 45% of the Chilean GDP, continues to position itself as a stable and prominent financial and trade center in South America. Corporate demand in Santiago is primarily generated from the high concentration of multinational companies headquartered in Santiago, while leisure demand is primarily driven by tourists visiting friends and family living in the capital. Santiago’s lodging performance has historically been dependent on the Argentine economy, which, in the past year, has dampened and slowed down the growth of the overall Chilean tourism industry. Consequently, recent lodging performance statistics in Santiago show a marginal decline in RevPAR relative to prior years. Despite this recent decline in Argentinian demand, Santiago’s economic outlook remains positive for 2019; upcoming improvements to overall airport infrastructure and diversification of demand source markets (particularly a focus on Brazil) should aid in the absorption of incoming lodging supply and allow the market to recover to healthy historic RevPAR levels.

New hotels

86 rooms: NH Collection Santiago Casacostanera (2019)
249 rooms: AC Hotels by Marriott Santiago Costanera (2019)
178 rooms: Novotel Providencia (2019)
221 rooms: Hampton by Hilton Santiago Las Condes (2020)
210 rooms: Fairfield Inn Santiago Centro (2020)
33% Incoming upper upscale / luxury supply (2019+) = 700 rooms


Note: Figures rounded to the nearest hundred (total rooms). New supply data excludes
abandoned and deferred projects as of February 2019.
* JLL-led transaction


Quick facts

5.5M

International air arrivals (YE 2018)

 

 

2,200

New hotel rooms expected (2019+)

 

 

68.1%

Average occupancy for 2018

 

 

$124.65

Average rate for 2018 (USD)

 

 

$84.87|-1.6%

2018 YE RevPAR + % change v. YE 2017 (USD)

 

 

Source: CITUR, STR, STR pipeline as of Feb 2019, JLL, ICCA, Oxford Economics
Notes: ICCA = International Congress & Convention Association; RevPAR = Revenue per Available Room;
YTD = Year-to-Date

São Paulo

São Paulo, which accounts for nearly 11% of the Brazil’s total GDP, continues to rank among the most important business hubs in South America and boasts the largest Class A office inventory in the country. Due to its solid macroeconomic fundamentals and diversified commercial activity, São Paulo was able to recover relatively fast from Brazil’s economic slowdown during 2016 and 2017; in 2018, the city witnessed a robust recovery in corporate demand, overall investment volume, number of events and trade fairs, and total visitation, which surpassed 61.7 million air arrivals between both airports. As a result, the city continues to exhibit solid lodging demand growth as it continues to lead Brazil’s economic recovery and attract a stable base of corporate and events demand.

New hotels

105 rooms: Canopy by Hilton Jardins (2019)
151 rooms: Rosewood São Paulo (2020)
178 rooms: W Hotel São Paulo (2021)
170 rooms: Hilton Garden Inn Rebouças (2022)
240 rooms: Fasano Itaim (2022)
43% Incoming upper upscale / luxury supply (2019+) = 800 rooms


Note: Figures rounded to the nearest hundred (total rooms). New supply data excludes
abandoned and deferred projects as of February 2019.
* JLL-led transaction


Quick facts

7.5M

International air arrivals (YE 2018)

 

 

2,000

New hotel rooms expected (2019+)

 

 

62.6%

Average occupancy for 2018

 

 

$96.13

Average rate for 2018 (USD)

 

 

$60.18|-2.5%

2018 YE RevPAR + % change v. YE 2017 (USD)

 

 

Source: CITUR, STR, STR pipeline as of Feb 2019, JLL, ICCA, Oxford Economics
Notes: ICCA = International Congress & Convention Association; RevPAR = Revenue per Available Room;
YTD = Year-to-Date

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