South America's Biggest Hotel Trend

South America's Biggest Hotel Trend

What to expect from Hilton, IHG, Wyndham, Starwood and more By: Mark Chesnut
<p>Four Points by Sheraton Cancun Centro is slated to open in December this year. // © 2014 Starwood Hotels &amp; Resorts</p><p>Feature image (above):...

Four Points by Sheraton Cancun Centro is slated to open in December this year. // © 2014 Starwood Hotels & Resorts

Feature image (above): A rendering of the 298-room Hilton Barra, Rio de Janeiro, which is scheduled to open February 2015 // © 2014 Hilton Worldwide

The Details

South American Hotel & Tourism Investment Conference

If you’re looking for new hotel product to sell in South America, there’s a good chance that you’ll be selling limited-service hotel stays.

The growth of the mid-priced, limited service hotel concept in the region was a major topic for discussion at the South American Hotel & Tourism Investment Conference (SAHIC), which took place in Quito, Ecuador, in September. According to Arturo Garcia Rosa, president and founder of SAHIC, 44 percent of the new projects underway in South America are focused on the mid-market segment.

Among the hotel companies in growth mode in South America is Hilton Worldwide, which plans to open nearly 40 hotels and resorts in Latin America by the end of 2016. Some 75 percent of Hilton’s expansion in Latin America is focused on the Hilton Garden Inn and Hampton Inn brands, according to Tom Potter, senior vice president for the Caribbean, Mexico and Latin America of Hilton Worldwide. 

“With stable and growing economies, Latin America affords tremendous opportunities, and we have the right team in place to continue introducing the right brands to target markets with significant potential for growth,” Potter said. 

The company’s development pipeline will add more than 6,000 rooms in Latin America, with several South American properties in the works, including the 298-room Hilton Barra, Rio de Janeiro scheduled to open February 2015 and the 226-room DoubleTree by Hilton Hotel Santiago – Vitacura in Chile. Additional hotels in the pipeline include Hampton Inn properties in Colombia; Hilton Garden Inn properties in Argentina, Brazil, Chile, Colombia, Peru and Uruguay; and Conrad Hotels & Resorts in Colombia. 

Starwood Hotels & Resorts is another player banking on limited-service brands in South America. 

“As also seen in other parts of the world, Four Points is riding a swell of growth in the region thanks to its ‘best for business approach,’” according to Osvaldo Librizzi, co-president of Starwood Hotels & Resorts Worldwide, Inc. for the Americas. 

Seven new Four Points hotels are to debut in Latin America in the next three years. In addition, W Bogota Hotel is scheduled to open by the end of this year in Colombia, followed by a Sheraton in Cartagena at the end of 2015 and the Sheraton Santa Cruz, which will debut in Bolivia in 2017.

Marriott International, Inc. has similarly ambitious plans for the region. The company used the SAHIC event to promote the planned 2016 opening of a 202-room Marriott hotel in Guayaquil. 

"This is a very exciting time for Marriott in Latin America,” said Craig S. Smith, president of the Caribbean and Latin America at Marriott International. “We recently announced our goal to double our portfolio in the Caribbean and Latin America by 2017 and are thrilled to expand our portfolio in Ecuador with our new partners.” 

Wyndham Hotel Group is also upping its presence in Ecuador through a partnership with developer Pronobis. The company will franchise eight new hotels around the nation with Wyndham brands over a 10-year period. One of the first results of the alliance is the 146-room Wyndham Quito Airport Gran Condor, which will be the first hotel to open on the grounds of the new Mariscal Sucre International Airport in Quito that debuted in 2013. 

Companies looking to establish a stronger foothold in South America include Hyatt Hotels Corporation, which aims to expand its mid-market brands as well as the relatively new, all-inclusive Hyatt Ziva Los Cabos and Hyatt Zilara Cancun. 

“We have a small presence in Latin America, so this is a great opportunity for growth and we are looking to focus on the midscale market,” said Patrick McCudden, Hyatt’s senior vice president, real estate and development for Latin America. “Hyatt Place has opened in Chile and soon in Panama, so our brands are gaining momentum in the region.”

InterContinental Hotels Group (IHG) is also in growth mode in South America. A 287-room InterContinental hotel is scheduled to open in Cartagena in December., Other IHG projects in the pipeline include the 594-room Holiday Inn/Holiday Inn Express Rio de Janeiro and the 130-room Holiday Inn Quito Airport, both of which are to open in 2016. In addition, there are approximately 15 other projects currently in development in the region. 

“The markets with the greatest opportunity for IHG are Brazil, Mexico and Colombia,” said Joel M. Eisemann, IHG’s chief development officer for the Americas.