According to the recent Latin America Construction Pipeline Trend Report from Lodging Econometrics (LE), the region’s total construction pipeline has 555 projects/90,496 rooms at Q2 2022.
Following nearly two years of uncertainty stemming from the pandemic, the hotel industry in Latin America is finally showing some signs of recovery. Consumer confidence has risen as border restrictions and quarantine requirements across the region and air passenger traffic to Latin American countries has increased substantially compared to numbers recorded in the second quarter of 2021.
In the first half of 2022, 40 projects/8,481 rooms began construction in the region. New project announcements, in Q2 2022, are up 57% by projects YOY at 36 projects/6,208 rooms.
In Latin America, there are 254 projects/46,670 rooms presently under construction, projects scheduled to start construction in the next 12 months are at 158 projects/23,371 rooms, and projects in early planning are at 143 projects/20,455 rooms. The early planning stage of the pipeline in Latin America is the only stage with growth, up 43% by projects and 26% by rooms YOY.
Mexico leads Latin America’s construction pipeline at Q2 with 211 projects/34,509 rooms. Next is Brazil, which stands at 89 projects/14,471 rooms. These two countries account for 67% of the projects in the total pipeline. Following Brazil is Peru with 29 projects/3,669 rooms, then the Dominican Republic, with 24 projects/5,563 rooms and then Columbia with 19 projects/2,936 rooms.
Cities in Latin America with the largest pipelines at Q2 include Mexico City with 26 projects/3,371 rooms; Guadalajara, Mexico with 21 projects/2,595 rooms; Cancun, Mexico with 19 projects/8,379 rooms; Lima, Peru with 18 projects/2,567 rooms; and São Paulo with 11 projects/2,101 rooms.
At the close of the second quarter, the top hotel franchise companies in Latin America’s construction pipeline are Marriott International with 105 projects/17,559 rooms, followed closely by Hilton with 100 projects/14,166 rooms. Next is Accor, with 80 projects/10,274 rooms and then InterContinental Hotels Group (IHG), with 59 projects/6,828 rooms. These four companies are responsible for 62% of the projects in the total construction pipeline.
The largest brands in the pipeline for each of these companies at the end of the quarter are Accor’s Ibis brands with 53 projects/6,678 rooms, Hilton’s Garden Inn with 25 projects/3,271 rooms, Holiday Inn Express by IHG with 13 projects/1,538 rooms and Marriott International’s Marriott Hotel with 12 projects/3,011 rooms.
In the first half of 2022, Latin America had 38 new hotels with 6,961 rooms open. The LE forecast for new hotel openings calls for another 72 new hotels to open in the second half of the year bringing the total to 110 by the year-end. In 2023, LE analysts are forecasting 108 projects/19,637 rooms to open in the Latin America region. In 2024, LE’s forecast for new openings is expected to increase to 129 new hotels with 17,494 rooms forecast to open.