Executive Summary

This market report profiles the relative size, positioning, and strategic growth initiatives of Latin America’s leading hotel groups, to understand how these players have managed to expand in the region, despite the economic, political, and even biological setbacks of recent years. The general perception is that Latin America has gone from promise to peril in the wake of a changing global landscape. A steep and sustained drop in oil prices beginning in the spring of 2014 has indeed stymied economic growth, destabilized currencies, and shrank government budgets leading to political scandal and an overall bleak investment outlook.

Tourism and hotel receipts also took a hit as a result of sluggish demand and the Zika epidemic now spreading into North America and the Southern United States. While the headwinds have shaken investor confidence, not all markets in the region have behaved the same way; when it comes to travel and demand for lodging, each market has a unique footprint. 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.

Political upheaval and economic challenges in Brazil have impacted general perceptions and investor confidence in Latin America more generally. The dire situation in Venezuela also casts a shadow for the region. Mexico, on the other hand, is a bright star for resort and leisure hotel investors, as well as those looking to explore the country’s interior. Certain industrial hubs in Mexico have grown their hotel room inventory by as much as 20 percent since 2014, as economic activity in sectors such as automotive manufacturing and knowledge services outsourcing continue to gain momentum.

Colombia’s lodging sector went through a growth phase between 2010-2014 as hotel investors were offered favorable tax incentives to grow the country’s room supply. Development has slowed, but many of those interviewed for this report now point to Colombia’s secondary cities, stating interest and activity in markets like Medellin, Barranquilla, and Cali. The political situation and regulatory climate in Argentina has shown signs of improvement as a new president and administration settles in. Peru has remained more stable economically relative to other markets in Latin America; hotel investors are racing to meet demand in Lima and other destinations.

The region also has commonalities, despite its immense diversity. While income per capita is low in many countries relative to the U.S. or Europe, Latin America’s travel consumer base comes from a rising middle class with more purchasing power than other developing markets – in Asia, for instance. A shared language – i.e. Spanish tends to attract the big Ibero-based hotel groups and backers looking to position themselves in the region as a whole. While Latin America has its fair share of domestic issues involving gang violence and personal safety, the region has been virtually untouched by the type of Islam-based terrorist activity that has eroded confidence in more mainstream travel markets.

There are other silver linings that have investors interested. Latin America overall is an attractive destination for younger generations and international adventure seekers curious about the natural and cultural beauty that the region offers. Domestically, the Latin American population is much younger compared to other parts of the world. As these demographic cohorts mature and enter into the workforce, this evolution will bear fruit for those hotel groups that have invested early on.

Many executives interviewed for this report have stated that Latin America “is a mid-to-long term opportunity” pointing to possible developments such as turnaround in Brazil, a pick-up in investments from China, reform in Argentina, and a pick-up in global oil prices, could all have positive impacts on the region as a whole.

The impact of the Zika virus on inbound tourism to certain Latin American and Caribbean markets has been significant, particularly for those markets that depend on international visitors. Brazil’s tourism sector, for instance, depends heavily on domestic travel and in-region visitors from countries that have also been impacted by Zika. Now, as the epidemic spreads to North America and indeed through the rest of the world, the impact on LATAM tourism could take a different turn. The worst case scenario for travel would be a global slowdown of travel and international traffic as a result of Zika.

Brand affiliated hotels now operating in Latin America also have certain advantages relative to independent properties. Local hotel investors, particularly during less certain economic times, are more likely to consider standard branded products; Latin American consumers prefer branded properties over independents; economies of scale and overall sophistication in digital distribution strategy also put branded properties in an advantageous position.


Many of Latin America’s hotel chains have successfully grown their footprint in the region, despite Zika and a sluggish economic outlook for certain markets. A rising middle class and steady business traveler demand (particularly to secondary cities) are keeping accommodations demand interesting enough to keep planned expansion initiatives rolling through this period of economic and political transformation.

Our best estimates project that over the next ten years, hotel sector revenues could jump by as much as 60% throughout the region’s six largest markets, reaching $27.4 billion in bookings by 2025. While the pace of economic growth in Brazil has weighed down the region’s overall outlook, other countries including Mexico and Peru have fared better amid a global economic landscape less favorable to developing markets. In this environment, most of the twenty hotel chains examined in this report highlight a positive (albeit less optimistic) outlook through 2020.


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.

A recent report produced by Johns Lang LaSalle estimates that a total of approximately 449,500 new rooms will be added to Latin America’s six largest markets by 2025. Peru could represent the biggest opportunity in terms of overall growth during this time period.


Data Sources: Projections were made based on calculations using supply and demand data from Jones Lang LaSalle and STR Inc.

Tourist destinations still represent the largest single category for hotel development, but the larger overall footprint resides in urban centers, major cities, as well as secondary and tertiary cities.


Source: JLL.

Brazil’s economic and institutional foundations were shaken after a string of scandals and political upheavals unraveled within the upper ranks of the Brazilian government, just after the massive 2014 slide in global oil prices put the country’s biggest industry into a tailspin. Hotel demand, expressed in occupancy and daily rate, has declined as a result; some fear that conditions could worsen after the Olympics buzz fades. Many operators have also expressed frustration over Brazil’s broader operating environment, stating that it’s “difficult.”

Despite the uncertainty, hotel executives and investors still see Brazil as a significant mid-to-long term opportunity. Much of it has to do with the overall hotel mix and relative positioning of branded global brands relative to local independents. Consistency in product, scale, and appeal when it comes to loyalty and distribution, and general broader appeal with local investors have allowed the global chains to encroach on local and regional brand turf.

Aside from Latin America’s massive gateway cities, much of the opportunity in lodging lays in the region’s secondary city market. Anecdotally, a number of executives interviewed pointed to Colombia and destinations like Barranquilla, Medellin, Cali, and other cities beyond Bogota. In Mexico, data show that places like Puebla, Queretaro, and Villahermosa – cities at the heart of the Mexican industry – have expanded in room size by 20 percent in some cases. Looking beyond the maturing and intensely competitive beach resort market, global chains are keeping a close eye on these hubs as Mexican industry, particularly the automotive sector, shows signs of strength.

Peru and Chile, while small relative to Brazil and Mexico, have fared relatively well economically; the hotel sector has expanded as a result. Latin America’s pacific nations have also been less affected by the Zika threat, the virus linked to birth defects and potential other maladies. The epidemic has significantly impacted tourism numbers to certain Caribbean destinations including Puerto Rico and the Dominican Republic, particularly with inbound American tourists.

Other less likely markets such as Uruguay and Paraguay have also shown promise as pockets of opportunity scattered across an otherwise diverse regional landscape. Latin America is a complex and fragmented region when it comes to economics, politics, culture, and operating environment. For those on the outside looking in, the headlines from major news sources tend to paint the region in broad brush strokes.

The commodities bust and crude oil price slide also sent most Latin American currencies tumbling relative to the dollar and other global currencies. Global hotel chains remitting money in non-local currencies took a hit with the depreciation as well as rising inflation. On the other hand, weaker local currencies have prompted would-be outbound international travelers to opt for local and regional destinations for travel.


Latin America is a populous region with considerable potential and size as a consumer market. The total population for the region (six largest countries) totals approximately 460 million, substantially larger than the United States. Yet these are relatively poor countries with GDP per capita resting significantly lower than more mature markets in North America and Europe.

Slide5Data Source: CIA World Factbook

Country Spotlight: Mexico

Mexico is Latin America’s largest hotel market in terms of inventory, beating out Brazil. Much of the demand comes from international visitors but the country’s domestic travel market has also begun to pick up steam in recent years. The economy relies heavily on trade ties with the U.S., hence the relative health of the U.S. economy has helped Mexico weather an otherwise unfavorable global landscape for oil producing nations. Foreign investment continues to flow into Mexico’s industrial base particularly in advanced manufacturing as cost factors such as wages in China edge upward. While government-led economic and political reforms helped dismantle monopolies in the energy and telecommunications sectors, the current Nieto administration has fallen out of favor with the general public over recent spikes in violence and slower economic growth.

Mexico’s hotel supply is expected to grow throughout the country both in beach destinations and interior destinations.


Data Source: Datatur.

Pent-up demand, improved connectivity and tourism product, are expected to drive record visitation, particularly in established destinations such as Cancun and Riviera Maya.


Data source: Datatur.

Interior city hotel supply has also expanded in certain secondary cities such as Puebla and Queretaro.


Data source: Datatur.

Country Spotlight: Peru

Peru packs a punch as a travel destination these days, pulling visitors from the Americas as well as Asia and Europe. In 2015, over 3.4 million international travelers descended onto the land of the Incas, up 50 percent from just five years ago. Many come for business in Lima and some come to walk the Inca trail, but Peru’s travel offering is now extending well beyond the country’s most visited and iconic destinations.


Data Source: MINCETUR.

Peru as a destination also pulls from a diverse and global traveler pool. The latest origin-destination data for hotel arrivals shows that U.S. visitors account for about 20 percent of Peru’s total hotel demand. France, with a nine percent share, is the second largest point-of-sale market for Peru. The remaining share of international visitors comes from a mixed bag of countries throughout Africa, Asia, Europe, and North America.



With visitor numbers growing at 10 percent annually, both public and private sector stakeholders are vested in diverting tourism dollars toward Peru’s many alternative beach, desert, jungle, and mountain destinations. Geo-politically, Peru is divided into 25 autonomous regions. Of these, Lima and Cusco still capture a significant share of visitor volumes, but hotel investments in regions like Ica, La Libertad, and Tumbles are heating up.



Latin America’s Top 20 Hotel Chains

By many respects Latin America is still the land of opportunity for branded hotel chains. The market remains fragmented and local with independent brands comprising over 50 percent of the total room supply. This figure is expected to drop to 41 percent over the next 10 years, as branded chains leverage economies of scale and greater appeal to investors, these assets will capture a larger share of the total market.


Data Source: JLL

Much of the inventory operates under a managed model, although the various executives and brand managers interviewed for the have been successful with franchised properties.


Data Source:  JLL

Latin America’s largest and fastest growing hotel chains tend to be global brands but many regional players are also expanding in the region.

Data Source:  Desk research conducted by Skift

AccorHotels Group

Openings and Acquisitions in the Region

In 2014 Accor opened 31 new hotels in the region. As of the publication date of this report, the group currently operates 283 hotels in Latin America, totaling close to 47,000 rooms with 89 percent of those rooms in Brazil. By 2018 Accor plans to sign another 185 hotels (already contracted), growing their regional footprint by 30 percent to 65,000 rooms in 180 cities across 12 countries.

Throughout 2015, AccorHotels Group opened 228 properties with 36,000 new rooms globally. It’s total network now spans over 510,000 rooms. Sixteen percent of the new rooms in 2015 are located in Latin America. AccorHotels Group remains focused on 13 countries in the region including but not limited to Argentina, Brazil, Chile, Colombia, Cuba, Ecuador, the Dominican Republic, Guatemala, Panama, Paraguay, Peru, Mexico, and Uruguay.

“Rio de Janeiro is Brazil’s greatest tourist destination, because of this, the group believes it is fundamental in their strategy for expansion to consider Brazil and more specifically, Rio de Janeiro,” said Olivier Hick, director of operations of the midscale brand of AccorHotels for South America.

Additionally, Accor announced that it has bought into two home-rental platforms, Oasis Collections and Squarebreak. The acquisitions are strategic moves for the brand that parallel its commitment to transform its business. The brand also feels that a number of operators will eventually find themselves working with these secondary residences.

The Oasis Collections brand is positioned as a “home meets hotel” accommodations provider, and expands Accor’s regional footprint with its portfolio offering of +/- 1,500 properties in 18 cities across Latin America, Europe, and the United States.


What’s Driving Expansion and Branded Product Demand

“The overall growth of the company this year has been observed in two very important points: the acquisition of well-known brands in the market in categories such as luxury, also in residential hosting services as OneFinestay and global concierge service John Paul,” said Patrick Mendes CEO for AccorHotels South America.

In the first quarter of the year AccorHotels saw a 5.2 percent drop in total business mainly due to the fall of the Brazilian Real, which accounts for a loss of almost 19 million Euros.

Brazil, with a 7.5 percent decline in year-over-year revenue, was the biggest contributor to the region’s downturn, as poor economic conditions slowed the volume of seminar and meeting activity at hotels.

“AccorHotels keeps its expansion plan for South America growing. Currently we have 283 hotels and 185 units in deployment. Our goal is reach 500 hotels in the region until the end of 2020,” said said Patrick Mendes CEO for AccorHotels South America.

“The company currently operates in 100 cities in Brazil. In 2020 we will be in more than 160 cities, it reinforces our interest in mapping potential cities in development with over 100 thousand inhabitants. We are interested in expanding our operation in north and northeast regions of the country as well,” said Patrick Mendes CEO for AccorHotels South America.


Openings and Acquisitions in the Region

With the pending acquisition of Starwood, Marriott is positioned to become the second largest hotel group in Latin America. Marriott’s owned Latin America brands include the Ritz-Carlton, Renaissance, and JW Marriott. While the deal has yet to be finalized, Starwood’s managed Latam brands that might be impacted by the merger include the St. Regis, W, Westin, Le Meridien, and Sheraton brands.

Today, Marriott has 115 properties with 150 hotels expected in the region by the end of 2017. “We need to be focused on local, and how we ultimately win by country, then win by region, then win overall. But this really requires diligence in understanding each respective country. Growing in the region requires incredible nimbleness, nimbleness to move in and move out to how we drive top line and how we drive bottom line,” said Tim Sheldon, President of the Caribbean & Latin America, Marriott International.

Currently, Marriott’s portfolio of hotels has 38 properties in Mexico, 16 of which are under the Courtyard by Marriott name that represent 42 percent of their portfolio in the country. Other brands in Mexico that are part of the portfolio include Ritz-Carlton, JW Marriott Hotels, Marriott Hotels & Resorts, AC Hotels, Courtyard by Marriott Hotels, and Fairfield Inn & Suites.

“Mexico has been maturing pretty quickly in Latin America. We’ve seen quite a bit of progress there to develop a franchise community. In contrast, a market like Brazil is difficult to build and do business and there is difficulty in penetrating the market with a franchise model like Mexico,” Sheldon said.

That being said, the chain is still very excited about the potential for Brazil. They have a strong presence in Sao Paulo and Rio de Janeiro, where they’ve opened four new hotels in the last 45 days.

The group doesn’t want to bring every brand to Latin America because the chain feels it becomes difficult to build local awareness. If Marriott builds these brands outside of major connection points for U.S. travelers, building local awareness becomes key to developing a successful franchise community.

“We’re really excited about Argentina, we like the fact that it appears to be in a better place today than it was a year ago. We have not been in Argentina for some time, so when you think about not having any presence there and it’s also a real center of opportunity from U.S. travelers going there, and also the Latin America region we see Argentina as a real opportunity for us,” said Tim Sheldon, President of the Caribbean & Latin America, Marriott International.


What’s Driving Expansion and Branded Product Demand

One part of Marriott’s growth strategy in Latin America largely focuses on working with large full-service brands in key resort markets and urban cities where they can depend on U.S. travelers or Marriott loyalists. Next steps are to grow the portfolio and understand which brands make sense to expand.

“On the subject of a growing middle class in Latin America – as they begin to travel more and more it isn’t always the case that we can drive rate premiums like we would in a major city with a U.S. traveler. All of this has to come together in an economic model that makes sense for both the owner and our brand, to continue to deliver brand consistency in Latin America,” said Sheldon.

In Marriott’s mission to build local awareness of the brand, increase demand, and increase infrastructure on the ground, the chain has begun to source marketing and sales teams locally. The brand has also continued to invest in its rewards and loyalty programs adding to the already known Marriott loyalists in the region. Ultimately, the brand is pushing for direct bookings in the region, and they’ve found that Latin American consumers are strong adopters to technology and are already booking through all the usual channels (i.e. online, direct, telephone).

Intercontinental Hotels Group

Openings and Acquisitions in the Region

Plus or minus 35,000 rooms. The Intercontinental Hotel Group has a strong presence in the region, thanks mainly to its Holiday Inn Express brand. Ninety-one percent of rooms in the region operate under the franchise business model primarily in the upper mid-scale segment (Holiday Inn brand family). In total, IHG has 220 hotels under six different brands across 21 countries in Latin America.

“It can be expected that the Holiday Inn Express will continue to expand its presence in Latin America.” Jorge Apaez, director of operations for Mexico, Latin America, and the Caribbean for IHG, said they would be expanding the brand in Peru specifically. “Peru boasts excellent opportunities for brand growth.” This year the hotel Holiday Inn Express Lima San Isidro will open its doors with 164 rooms as well as the hotel Holiday Inn Express Piura with 120 rooms (currently under construction).


What’s Driving Expansion and Branded Product Demand

Mexico dominates IHG’s Latin America portfolio – approximately 75 percent of the group’s LATAM properties are there. The economic landscape in Mexico is more favorable than in other countries in the region, particularly in Brazil. Hence, IHG’s Mexico heavy footprint will limit the portfolio to economic headwinds impacting Latin America.

Peru has championed itself among its Latin American neighbors with a compound annual growth rate far exceeding the regional average at 8.3 percent. The Intercontinental Hotels group will continue to press on in Peru with its Holiday Inn Express brand. The current pipeline in Peru is +/- 1,000 rooms and shows strong potential for brands such as IHG looking to expand its portfolio into secondary and tertiary cities.

Other openings include a Holiday Inn Express branded property in Asuncion. The property is a new build and is expected to open with 120 rooms by the end of 2018. The hotel will be owned and managed by Ventura Inversiones S.A. Paraguay is a small market but has done well economically, despite the regional slowdown.

Meliá Hotels International

Openings and Acquisitions in the Region

Plus or minus 30,000 rooms in Latin America. The Spanish chain has 370 properties in 40 countries and expects to open 14 more by early next year. Meliá’s Latin America footprint focuses most of its efforts on the Caribbean and Cuba, with more recent activity in Chile, Colombia, and Rio de Janeiro.

The group is strong in Cuba, managing one fifth of the island’s room inventory; the group will actively seek to hold and expand its position on the island, as political and economic relations with the U.S. improve.

In Cuba more specifically, Meliá is the leading foreign operator with 28 hotels under management, 13,480 rooms in its portfolio, and an additional three properties in the pipeline including a 900-room hotel in Veradero. Meliá signed its first hotel in Cuba 25 years ago and has since proved itself a strong partner and brand to the Caribbean nation.

Meliá Hotels International continues its expansion efforts with their current pipeline consisting of hotels just signed and in the process of being activated in Brazil, Venezuela, Colombia, Chile, Cuba, and Costa Rica. Estimates from previous years show that Meliá Hotels International average activation consists of 20-25 hotels each year, with nearly one hotel under new contract every two weeks.


What’s Driving Expansion and Branded Product Demand

“Latin America has been instrumental to the brand’s development. The Caribbean, Mexico, and the Dominican Republic, as well as Cuba all provide ground for common language and culture. There is competitive advantage in Latin America and the Caribbean,” said Gabriel Escarrer, founder of Meliá Hotels International.

Global revenues jumped 15 percent to EUR 1.33 billion in the first nine months of 2015, compared to the same period last year. Taking into account the weight of 3Q and bookings in 4Q, Meliá upgraded its guidance to double digit growth in RevPAR for the full year 2015, with more than two thirds of this explained by price increases.

Gaviota Group

Openings and Acquisitions in the Region

Plus or minus 24,000 rooms. Gaviota Tourism Group, chaired by Carlos Manuel Latuff Carmenate and controlled by the Cuban government, holds ownership of about one third of the Cuban hotel sector, with close to 24,000 rooms distributed across 55 hotels on the island.

Cuba’s Gaviota Group has big plans for expansion with hotels opening throughout this year until 2020. The group plans to construct 30 new hotels in Havana, Varadero, Ciego de Avila, Holguin, Camaguey, and estimates 15,000 new rooms by 2018.


What’s Driving Expansion and Branded Product Demand

The group reported annual growth of 12 percent in bookings. International players including Meliá, Iberostar, Blau, and others manage 85 percent of the group’s facilities. The group also aims to expand into Cuba’s broader tourism value chain. The group already operates tours, marinas, and car rental operations on the island.

Cuba’s tourism benchmark is on the rise and will continue to increase throughout 2016. Cuba is poised for a massive increase in the number of tourists to be expected and has responded with a record number of resort and hotel construction programs. Approximately +/- 14,000 rooms in private houses are helping to accommodate this new influx of tourists in the interim.

Grupo Posadas

Openings and Acquisitions in the Region

Plus or minus 23,000 rooms. The group owns and manages 136 hotels across seven brands, reaching close to 23,000 rooms all in Mexico. Run by the Azcarraga family, Posadas is aiming for aggressive expansion beyond Mexico. Posadas plans to open up to ten luxury hotels over the next five years in U.S. cities with large Hispanic populations and ones that attract Latino travelers. The group is teaming up with Bighorn Capital Inc., a Las Vegas-based private equity firm that is investing $450 million to build, acquire, or convert properties into Posadas hotels.

It’s Live Aqua brand will become the U.S. flagship. The first Live Aqua hotel is expected to open with 300 rooms by 2017 in Chicago’s West Loop, as part of an 82-story tower slated to break ground this summer. Globally, the group projects to reach 50,000 rooms by 2020 with expansion plans set in the Caribbean. Seventy percent of Posadas’ revenue comes from business tourism, but the group has also reported strong growth in its leisure line of hotels.


What’s Driving Expansion and Branded Product Demand

Last year Grupo Posadas closed the year with 141 hotels and 23,259 rooms. 2015 was a year that had better than expected results for the brand and set the stage for projected +/-17 hotels to be opened in Mexico through 2016.

Mexico has been an extremely favorable market for the group, providing record growth and exceeding benchmarks year-over-year. Last year the group experienced an 11 percent growth and this year Grupo Posadas is poised to exceed last year’s numbers with growth forecasted at 12 percent. Grupo Posadas is continuing to accelerate expansion with its projected double-digit growth again through 2016.

Additionally, Mexico’s largest hotel company is looking to continue its expansion to cities in the U.S. with large Hispanic populations. The group plans to open +/- 10 luxury hotels over the next five years. The expansion will introduce to the U.S. its high-end boutique brand called Live Aqua, which will feature the “flavors, colors, and textiles” of Mexico, says Javier Barrera, Posadas’ chief franchise officer.

Hilton Worldwide

Openings and Acquisitions in the Region

Plus or minus 20,000 rooms. Hilton Worldwide operates various brands in Latin America including Double Tree, Hilton Garden Inn, Home2 Hampton by Hilton, Hilton Grand Vacations, and the Hilton Hotels & Resorts brand. In 2016, the Embassy, Homewood, and Home2 properties will fund the new All Suites branding initiative, set to consolidate the portfolio. In December of 2015, the group announced expansion into Colombia with the opening of two Double Tree branded hotels in Bogotá. Hilton’s broader regional strategy focuses on targeting secondary and tertiary cities. Most recently the company announced plans to bring its flagship Hilton Hotels & Resorts brand into Asuncion, Paraguay. Hilton claims to have 50 regional projects in the pipeline.

This year Hilton Worldwide announced plans to reach a milestone 100 hotels in Latin America by the end of 2016 as well as an estimated 60 percent growth in the portfolio expected through 2017. In the pipeline, the brand claims an additional 55 hotels and 7,500 rooms with 40 percent of them to go online by 2017.

“Hilton Worldwide continues to lead the industry as one of the fastest growing hospitality companies with the largest rooms pipeline,” said Ted Middleton, Senior Vice President, Development, Latin America, Hilton Worldwide. For the past decade Hilton Worldwide focused acquisitions in gateway cities and have since seen impressive success. In the gateway cities you see high-level international travel – an extremely high percentage of these travelers are coming from Hilton Hhonors members.

Hilton Worldwide seeks to expand into secondary and tertiary cities in Latin America where, because of the growing middle class, an increase in regional tourism can be expected. Hilton Worldwide boasts a strong development pipeline of more than 50 confirmed hotel projects and 7,500 rooms across Argentina, Bolivia, Chile, Colombia, Dominican Republic, Ecuador, Mexico, Peru, Saint Kitts and Nevis, Saint Thomas, and Uruguay. In short, Colombia is the brand’s second largest market, Mexico has been fruitful, and in 2017 there is an expectation to see increased activity in Argentina.

A partnership was brokered between Hilton Worldwide and Atlantica Travel Group in Brazil. “Brazil is incredibly difficult and the cost and complexity of doing business in Brazil is high,” said Ted Middleton, senior vice president of development, Latin America, Hilton Worldwide.


What’s Driving Expansion and Branded Product Demand

Hilton Worldwide’s current expansion plans span seven brands: For Hampton and Garden Inn more specifically, the capital investment is lower here than fully branded Hilton properties +/- $50 million. Investments for Hampton and Garden Inn brands are lower, $7–$16 million. “The universe of investors is just greater for those property sizes,” said Middleton.

Branded hotel products are expected to surpass independent products by 2025. “In many markets, nationally branded properties are vulnerable to the international brands, the product is more consistent and there’s wider distribution,” said Middleton. The situation on the ground in Latin America is similar to what was in the United States some 20 years ago. As the hotel markets mature, the importance of brand recognition, loyalty, distribution, and consumer trust become more apparent. The branded hotel industry can expect to see a shift in product preference from managed properties to franchised properties in Latin America and Hilton Worldwide is determined to be on on the cusp of that transformation.

Ninety percent of Hilton Worldwide hotels are new builds – conversions are difficult in Latin America because of international code in fire. One of our challenges of franchising is the there isn’t a deep pool of experienced operators in the region. We’ve worked hard to find those operators, said Middleton.

RIU Hotels & Resorts

Openings and Acquisitions in the Region

Plus or minus 20,000 rooms. RIU is a family-owned Spanish hotel chain with holiday resort properties in Mexico, the Dominican Republic, Jamaica, Aruba, the Bahamas, and Costa Rica. The chain has 100 hotels in 19 countries accommodating over four million guests a year. Since 2010 RIU has expanded beyond its traditional beach destinations with its city hotel line called RIU Plaza. The newest locations include Berlin, New York City, and Sri Lanka. Rather than focusing on managed or leased hotels, RIU maintains an ownership model for its properties. Three out of four hotels within the RIU portfolio are owned properties.

Wyndham Worldwide

Openings and Acquisitions in the Region

Plus or minus 17,000 rooms. In 2014 the company opened and expanded 24 properties in the region, growing its room numbers by 20 percent compared to 2013. The company has 136 properties in 17 countries throughout Latin America and the Caribbean. Brands operating in LATAM: Ramada, Days Inn, Super 8, TRYP by Wyndham and Howard Johnson brands. Most recent additions to the portfolio include the first Ramada in Belize, Guatemala, Dominican Republic, Panama, and Suriname, as well as the first Days Inn in Colombia.

Wyndham Worldwide has its largest portfolio with Howard Johnson (32 hotels + 1 opening in 2016) in Argentina followed by a strong presence of the Ramada brand (tenth property opened in 2016 in Brazil). Wyndham Garden and Super Inn brand hotels continue to expand in Mexico with a target on the business traveler.

“Latin America remains a market of opportunity and record growth for us, Wyndham Worldwide remains committed to the region and will increase investments to infrastructure, distribution, and loyalty programs,” said Paulo Pena, the president and director General for the Latin America region. By 2025, Wyndham Hotel Group plans to expand, with particular interest, in Mexico with four times the current number of rooms it already has, from 5,500 rooms to 20,700 rooms.


What’s Driving Expansion and Branded Product Demand

Wyndham Worldwide sees growing demand across the region but focuses on the six priority markets – Mexico, Brazil, Colombia, Peru, Chile, and Argentina said Pena.

“Overall the travel trends that we see globally and certainly relevant within Latin America is that the travel industry continues to outpace the general economy in terms of growth. The middle class has grown by 11 percent in the last decade or so and countries like Mexico, Brazil, Colombia, Argentina, Peru have certainly seen the growth over that period,” said Pena.

Increasing amount of regional travel among a growing Latin American middle class provides a healthy opportunity for branded hotel products. With respect to Wyndham Worldwide, midscale and economy branded hotels are focused in Mexico, particularly in areas of stronger industry activity including the city of Queretaro and other regions where subsequent demand for mid-scale international branded products remains strong.

Currently, Latin America as a whole remains under-penetrated by brand-affiliated hotels. The majority of Latin American hotels are operated independently — 46 percent of the region’s hotels are branded. Pena asserted that Latin American consumers will tend to favor more of the branded hotel products and the consistency in quality and experience that they provide. By 2025, Latin America’s mix of branded versus independent hotels is expected to shift to approximately 55 percent to 41 percent, respectively, according to recent research from JLL.


Openings and Acquisitions in the Region

Plus or minus 15,000 rooms. AMResorts is a hotel and brand management company now operating 60 luxury products in Mexico, the Dominican Republic, Jamaica, Curacao, Costa Rica and the U.S. Virgin Islands, with resorts in Panama and Aruba opening in December 2015 and 2018 respectively. The chain, under parent company Apple Leisure Group, exploded its Caribbean profile in 2015, signing 17 new hotels in less than one year. The group signed its 60th property in 2016.

“By focusing on growth in established markets and seizing opportunities to expand into new destinations, Apple Leisure Group’s resort product footprint is now stronger and broader than ever,” said Alex Zozaya, CEO of Apple Leisure Group. “Reaching the 60th resort milestone is a testament to our ability to optimize resort performance and stay ahead of the curve by anticipating where travelers want to be.”

What’s Driving Expansion and Branded Product Demand

Tour operator Brand Travel Impressions and online site CheapCaribbean.com are also part of the Apple family and drive much of the distribution to AM properties in Latin America.

“In the all-inclusive hotel product space AMResorts is constantly making strides to elevate and redefine the segment,” said Zozaya. “Adding more properties in booming Mexican, Caribbean, and Latin American destinations, and looking for opportunities to further develop our brands will remain crucial in retaining brand loyalists and capturing new audiences.”

“Our dynamic business model combined with our ability to find the right deal in the right place at the right time has enabled us to grow at an industry-leading pace,” said Javier Coll, Executive Vice President and Chief Strategy Officer of Apple Leisure Group. “In addition to continued expansion in Mexico and the Caribbean, we are introducing AMResorts’ innovative Endless Privileges, Unlimited-Luxury, and Unlimited-Fun resort concepts to new markets like Costa Rica and Panama.”

Atlantica Hotels

Openings and Acquisitions in the Region

Plus or minus 14,000 rooms. Atlantica Hotels is Brazil’s largest privately-held hotel management group with over 80 properties in its portfolio. In late 2015 the company was acquired by Tao Capital, the investment group representing investment mogul George Soros. Atlantica is a management company maintaining partnerships with Choice Hotels International, The Carlson Rezidor Hotel Group, and Hilton Worldwide, operating in Brazil under 13 different brands including Hilton Garden Inn, Radisson, Four Points, and Clarion.

Today the focus is Brazil. Atlantica currently operates 87 hotels in its portfolio, which total more than 14,500 rooms in 44 cities across Brazil. Additionally, the management company has 60 hotels in its pipeline.

AM resorts

What’s Driving Expansion and Branded Product Demand

Paul Sistare, president and CEO of Atlantica Hotels International Limited, sees an opportunity for continued growth in Brazil and plans to leverage the existing foundation of his brand’s 85 hotels. That being said, Brazil has experienced a lull between hosting the World Cup in 2014 and the 2016 Olympic games. Some have expressed concern of a slowdown in the lodging sector post-Olympics, in light of economic headwinds.

Brazil has also been negatively affected by recent drought, which creates adverse conditions for electrical hydropower generation and could result in power reductions at hotels. Additionally, there is concern around the forecast for inflation that anticipates a rise of .5 percent. “That makes you nervous because the cost of goods you’re using to supply the hotels becomes more expensive,” Sistare said.

With inflation in Brazil on the forecast there is also a silver lining for hotels operating in the country. With the rise of inflation, hoteliers can also increase rates. But Atlantica Hotels seeks to increase average daily rate less than the rate of inflation, said Sistare.

Brazil is still underdeveloped in terms of its hotel industry. Atlantica Hotels remains committed to Brazil despite a difficult 2015-2016 full of socio-political and economic shortcomings for the country.

Barceló Group

Openings and Acquisitions in the Region

Plus or minus 14,000 rooms. Barceló became the third largest foreign hotel chain in Mexico with the purchase of Occidental in June of 2015, adding 2,000 rooms to its portfolio with properties in Playa del Carmen, Cozumel, and Puerto Vallarta. The group led by cousins Imon and Simon Pedro Barceló total approximately 7,500 rooms in Mexico, adding to the nearly 5,000 rooms they have in the Dominican Republic.

After the acquisition of Occidental Hotels & Resorts, Barceló Group has 105 resort and city establishments, which are almost exclusively four and five stars, and nearly 33,000 rooms distributed over 18 countries including its Latin American properties.

In Latin America and the Caribbean more specifically, the Spain-based hotel chain operates four hotels in Costa Rica, seven in Central America, and 39 in all of Latin America combined.

What’s Driving Expansion and Branded Product Demand

“We intend to keep expanding our presence in Latin America,” said Álvaro Pacheco, communications director for Barceló Hotels & Resorts.” Mexico in particular is key to the growth of our group in LATAM. The group has 18 resorts and two hotels in Mexico, designed mainly for American tourists. “But we also want to attract Mexicans and extend the brand inside the country. We’re seeking hotels especially in Mexico City, Guadalajara , Monterrey, and Queretaro with the goal of having 2,000 urban rooms,” said Javier Abadía, director general at Barcelo, in an interview with Spanish Newspaper El Pais.

The hotel group has also diversified beyond its core hotel business, as part of their overall sales and distribution strategy. In 2015 the group acquired Special Tours, a tour operator with a strong presence in the Latin American market. The group also owns Evelop Airlines which flies regular routes to the Dominican Republic and is expected to benefit from increased demand from Cuba as that market deregulates.

Blue Diamond Hotels and Resorts

Openings and Acquisitions in the Region

Plus or minus 13,000 rooms. Blue Diamond is the hotel management division of Sunwing Travel Group, a Canadian travel company with global retail, airline, tour operator, destination management, and hotel operations. Sunwing controls Blue Diamond distribution through its vertically oriented structure and owned distribution channels including Vacation Express, the third largest tour operator in the U.S. market, trailing Apple Leisure Group, and Funjet.

A majority of Blue Diamond managed properties are in Cuba, where it is among the three largest international hotel chains alongside Meliá Hotels International and Iberostar Hotels and Resorts. In just four years the group has grown to over 8,000 rooms across the top six Cuban destinations: Havana, Jibacoa, Varadero, Cayo Santa Maria, Cayo Coco, and Holguin.

With a 23-property portfolio exceeding 13,000 rooms in eight countries, Blue Diamond Resorts has become the Caribbean’s fastest growing resort group. The brand focus is delivering tropical beachfront experiences throughout Mexico and the Caribbean including but not limited to Cuba, Dominican Republic, Jamaica, and the Bahamas. Additionally, there are new projects in Saint Lucia, Costa Rica, and Antigua.

Today, the current portfolio of Blue Diamond Hotels and Resorts represents five distinctive brands: Royalton, Luxury Resorts, Grand Memories Resorts & SPA, Memories Resorts & SPA, Starfish Resorts, and Chic All Exclusive Resorts. Blue Diamond has 15 installations and more than 8,400 rooms in Cuba where expansion plans continue to grow throughout the Caribbean Island. Some more recent add-ons to the Blue Diamond brand were the Aguas Azules Hotel in Varadero (+411 rooms) and to also be opened this year, Starfish Las Palmas Hotel in Varadero (+122 rooms).



Openings and Acquisitions in the Region

Plus or minus 13,000 rooms. Iberostar Group is among the five largest chains in the Caribbean. Globally, the group has 100 hotels in its portfolio with about 27,000 rooms in 15 countries. About half of its room inventory (13,000) is located in Latin America spread across 30 unique properties. The hotel company has a wholesaler relationship with Almundo.com, a growing omni-channel travel agency with headquarters in Argentina. Almundo’s revenue in 2015 exceeded $350 million, almost double from the previous year. Almundo currently has presence in 18 Latin American markets, which helps position Iberostar hotel products in the region.

Blue Diamond

Hoteles City Express

Openings and Acquisitions in the Region

Plus or minus 12,500 rooms. Hoteles City Express topped 12,456 rooms with the 2016 opening of its City Express CDEMX Alameda hotel. The low-cost hotel chain has 111 properties in operation with units in 61 cities in Mexico and Latin America, one hotel in Costa Rica, and one in Colombia. The chain primarily targets the business traveler focusing its expansion efforts in key economic growth areas in Mexico. The company also has eyes for markets outside of Mexico including Central America and Colombia.

More specifically, the City Express CDMX Alameda hotel (112 rooms) opened in the first part of 2016; it is also the 13th hotel of the chain in Mexico City. The hotel is uniquely set in the downtown area of the capital and serves business travelers.

In regards to the target market, Hoteles City Express is considered the leading and fastest-growing limited-service hotel chain in Mexico geared mainly towards the domestic business traveler. Additionally, the group operates and represents several brands – City Express, City Express Plus, City Express Suites, and City Express Junior – to serve different segments of its target market.

Hotel City Express

What’s Driving Expansion and Branded Product Demand

At the chain level, occupancy in 2Q16 came to 62.6 percent, in line with the same period last year. The average daily rate (ADR) and revenue per available room (RevPAR) showed increases of 7.2 percent and 7.1 percent in comparison with 2Q15, coming to $812 and $508 respectively.

At the close of the second quarter of 2016, the chain was operating 109 hotels; an increase of 11 new units compared to the 98 hotels operating at the close of the same period in 2015. The number of rooms in operation in 2Q16 was 12,236, an increase of 10.3 percent in comparison with 11,092 at the close of 2Q15.

From June 30, 2016 to the publication date of this report, the company has opened two additional hotels: City Express CDMX Alameda and City Express Reynosa Aeropuerto, to reach 111 hotels in operation with 12,456 available rooms.

Bahia Principe

Openings and Acquisitions in the Region

Plus or minus 11,000 rooms. The Bahia Principe brand, under the Piñero Group, is the largest hotel chain in the Dominican Republic. The chain also has luxury resort properties in Jamaica, Mexico, and Spain.

More specifically, Grupo Piñero operates in over 30 countries and manages nearly five million hotel stays per year. It has 26 four- and five-star hotel establishments totaling 11,000 rooms and employs around 10,000 people globally.

In the Caribbean the chain has 19 four- and five-star resorts in the Dominican Republic, Samaná, Riviera Maya, Jamaica, Costa Adeje, and Puerto de La Cruz.

Bahia Principe

Brazilian Hospitality Group

Openings and Acquisitions in the Region

Plus or minus 10,000 rooms. GTIS Partners and GP Investments closed a $400 million tender offer for a 70 percent stake in the Brazil Hospitality Group. The remainder owned by GP Investments. The group consists of 52 hotels with a total of 10,000 rooms, mostly in Sao Paulo and on Rio de Janeiro’s oceanfront. The group has an exclusive contract with Golden Tulip Hospitality Group in South America allowing it to use the Royal Tulip (five-star), Golden Tulip (four-star), and Tulip Inn (three-star) brands.

Since its inception in 2008, the chain prioritized acquisitions, managing third-party properties, and developing and constructing new hotels (three to four stars). Brazilian Hospitality Group closed the first quarter 2016 with 9,854 rooms in operation, distributed into 53 hotels, of which 17 (32 percent) are owned, 26 (49 percent) are third-party, and 10 (19 percent) are partially owned.


What’s Driving Expansion and Branded Product Demand

Brazilian Hospitality Group has been keen to seek out attractive business opportunities in cities with robust economic activity, a healthy demand for rooms and an overall positive forecast for growth.

BHG is recognized for its commitment to the Brazilian market and recently has shown signs that part of its growth strategy looks to expansion opportunities in other countries in the region. That being said, a contract recently signed with Golden Tulip Hospitality Group in South America allows BHG to use the Royal Tulip, Golden Tulip, and Tulip Inn brands.

Grupo Vidanta

Openings and Acquisitions in the Region

Plus or minus 10,000 rooms. Grupo Vidanta is a developer and resort operator in Mexico and Latin America specializing in vacation destinations, luxury hotel brands, golf courses, real estate, tourism infrastructure, and entertainment. The company operates various luxury vacation brands in the region including Grand Luxxe, The Grand Bliss, The Grand Mayan, The Bliss, Mayan Palace, Ocean Breeze, and Sea Garden. Vidanta has a distribution agreement with the Interval International which operates member programs for vacationers and provides value-added services to its developer clients. Through offices in 16 countries, Interval offers high-quality products and benefits to resort clients and approximately two million families who are enrolled in various membership programs. Grupo Vidanta recently announced plans to invest $1.3 billion in new tourism-related projects in Mexico including new golf courses, resorts, and theme parks.

Grupo Vivanta

What’s Driving Expansion and Branded Product Demand

The group continues to expand its presence and span of influence by forging strategic partnerships with innovative entertainment experiences across Mexico. An example of one such partnership was the collaboration with Cirque du Soleil.

Additionally, Grupo Vidanta has recently signed into agreement with the global hospitality company Hakkasan Group, which details projected future investment of $150 million into new concept beach clubs, nightlife venues, restaurants, and hotels at Vidanta Resorts located throughout Mexico. This strategic deal will also be a first for the Hakkasan Group, which will get to bring its talents of world-leading lifestyle entertainment concepts to Mexico.

Grupo Vidanta is committed to not only investing in its own properties and evolving their brand but also to progressing the growth of tourism in Mexico as well.

NH Hotel Group

Openings and Acquisitions in the Region

Plus or minus 10,000 rooms. NH Hotel Group is a Spain-based hotel chain headquartered in Madrid. NH offers moderately priced and modernly-furnished hotel rooms and lobbies, located primarily in Europe, Latin America, and Africa. In 2015 the company acquired Latin American hotel chain Hoteles Royal. The acquisition added 20 new hotels in Colombia, Chile, and Ecuador, for an additional 3,000 rooms to NH’s existing 7,000-room footprint in the region. The NH Hotel Group portfolio in Colombia now includes 20 hotels with 2,600 rooms; 8 of which have been transformed into the upper-upscale brand NH Collection and seven into the NH Hotels brand. Currently, the NH Group’s presence in the Americas comprises properties in Argentina, Chile, Colombia, Cuba, Ecuador, the U.S., Haiti, Mexico, Dominican Republic, Uruguay, and Venezuela.

NH Hotels

What’s Driving Expansion and Branded Product Demand

NH Hotels are city hotels (three and four stars) that target business and leisure travelers alike. These hotels are typically located city-center and near popular neighborhoods. The group’s NH Collection properties are upscale and specifically designed for business or leisure travelers. The NH Collection within the group’s portfolio also has branded product offers that are attractive to the meetings and events segment in the region.

“Colombia is a destination that is becoming more and more attractive, and it is our intention to continue growing in this country, to be an active part of its society’s development providing our knowledge and experience to boost its touristic development and evolution,” said Federico J. González Tejera, CEO of NH Hotel Group.

In light of some of the more recent acquisitions, Colombia is now a strategic country for the development of NH Hotel Group in the rest of Latin America. Currently, the group has a portfolio of 20 hotels in Colombia, eight of the hotels have been transformed into the NH Collection – the upper upscale brand by NH Hotel Group.

The Group’s presence in Latin America is composed of Argentina, Chile, Colombia, Cuba, Ecuador, México, Dominican Republic, Uruguay, and Venezuela. To-date the group is operating 57 hotels and more than 10,000 rooms in 10 countries in Latin America. Additionally, NH Hotel Group has, under the Grupo Royal international, hotels located in Ecuador and Chile – four properties located in Chile as well as one hotel in Ecuador – under the NH Collection brand.


Openings and Acquisitions in the Region

Plus or minus 10,000 rooms. Decameron Hotels & Resorts is focused on South and Central America, with properties in Colombia, Mexico, Peru, Ecuador, Panama, El Salvador, Jamaica, and Chile. Leonardo Gonzalez Martinez, the president of Decameron, recently revealed that the group now has some 44 hotels and 10,000 rooms, with expectations to grow by 1,000 rooms in 2016. Decameron is a joint venture between Santo Domingo Group out of Colombia and Equity International in the U.S.


Local, local, local. “Latin America” is an umbrella term that should be used lightly when formulating hotel expansion strategy anywhere south of the U.S. border. Diversity, both in terms of local culture and relative opportunity and health of markets, makes the region both interesting and challenging for hotel groups to navigate. Nimble and effective hotel expansion therefore requires intimate and up-to-date intelligence on local operating environments, market strengths and weaknesses (often down to the city level), building partnerships with local investors, among other local dynamics.

Endnotes and Further Reading

  1. “Proyecta Wyndham en México pasar de 5 mil a 20 mil cuartos,” Reportur, June 2016.
  2. “HVS Key Takeaways: Hotel Opportunities in Latin America (HOLA) 2016,” HVS, May 2016.
  3. “Accor inaugura en Rio hoteles valorados en más de 50 M €,” Hosteltur, June 2016.
  4. “AccorHotels factura un 5,2% menos en el primer trimestre, hasta 1.161 M €,” Hosteltur, April 2016.
  5. “Latest Openings,” AccorHotels, December 2015.
  6. “Spanish chains ramp up global expansion,” Hotel News Now, January 2016.
  7. “Meliá obtiene en America el 59% de su beneficio operativo,” Reportur, May 2016.
  8. “Hilton Worldwide Portfolio in Latin America and the Caribbean to Surpass 100 Properties this Year,” Hilton Worldwide, September 2015.
  9. “Brazil’s slump spells growth for Atlantica,” Hotel News Now, March 2015.
  10. “Geographical distribution and expansion plans,” Barcelo Group, February 2016.
  11. “Barceló hotel chain expands into Panama with 10-year lease of the Occidental,” The Tico Times, April 2016.
  12. “Holiday Inn Express aumenta su presencia en América Latina,” Reportur, May 2016.
  13. “Impact of economic transformation on Latin America’s lodging industry,” JLL, May 2016.
  14. “AMResorts Kicks Off 2016 with the Expansion of Family-Friendly Resort Portfolio,” AMResorts, January 2016.
  15. “AMResorts Announces Strong Close to 2015 with Five New Resort Openings,” AMResorts, December 2015.
  16. “About Us,” Blue Diamond Resorts, August 2016.
  17. “Blue Diamond Resorts: Second Foreign Management Hotel Chain in Cuba,” Travel Trade Caribbean, April 2016.
  18. “About BHG,” Brazil Hospitality Group, August 2016.
  19. “Gaviota añadirá 30 hoteles y 15 mil habitaciones en Cuba para 2018,” Reportur, September 2014.
  20. “Great Expectations – the Tourists Are Coming,” Cuba Business Report, August 2016.
  21. “Grupo Posadas acelera expansión y prevé crecer a doble dígito en el 2016,” El Financiero, February 2016.
  22. “Grupo Posadas Plans U.S. Expansion,” The Wall Street Journal, June 2015.
  23. “Grupo Vidanta Partners With Hakkasan Group To Bring Nightlife, Daylife And Dining Experiences To Mexico In $150 Million Investment,” PR Newswire, April 2016.
  24. “Hoteles City Express Announces the Opening of City Express CDMX Alameda Reaching 110 Hotels in Operation,” News Center 1, 2016.
  25. “Hoteles City Express Announces Results for Second Quarter 2016,” Hoteles City Express, July 2016.
  26. “NH Hoteles Launching 15 Hotels in Colombia,” Hotel News Resource, September 2015.
  27. “AccorHotels Buys into Home-Rental Platforms, Reports Strong 2015 Revenue,” Business Travel News, February 2016.
  28. “Gaviota unveils list of new hotels opening in Cuba over the next few years,” YouTube, July 2015.
  29. “Barceló ocupa toda la playa,” El Pais, July 2016.
  30. Cover photo by Edgardo W. Olivera.