Latin America’s Hotel Construction Pipeline Shows Continuing Decline at the Close of Q2

PORTSMOUTH, NH—Analysts at Lodging Econometrics (LE) state in the “Q2’20 Latin America Hotel Construction Pipeline Trend Report” that the total construction pipeline stands at 681 projects/118,936 rooms, down 4% by projects and rooms, year-over-year (YOY).

Projects presently under construction stand at 345 projects/61,622 rooms, up 7% by projects and 10% by rooms, YOY. Projects scheduled to start construction in the next 12 months are at 196 projects/36,562 rooms. Projects in the early planning stage have experienced the sharpest decline, down 23% by projects and 34% by rooms YOY, settling in at 140 projects/20,752 rooms at Q2 close.

In the first half of 2020, 35 new hotels/5,803 rooms opened throughout Latin America. New projects announced into the pipeline in the first half of the year stand at 87 projects/10,487 rooms. In the second quarter of 2020, there were 51 new project announcements with 6,891 rooms; this is up slightly after a record low count in Q1.

Latin America’s construction pipeline is led by Mexico at a record high with 230 projects/42,372 rooms. Brazil follows with 132 projects/20,268 rooms. Next is Peru with 42 projects/5,619 rooms, then the Dominican Republic with 30 projects/6,091 rooms, and Cuba with 28 projects/7,649 rooms. Together, these five countries account for 69% of the rooms in the total pipeline.

Cities in Latin America with the largest pipelines include Lima, Peru, with 31 projects/4,551 rooms; Mexico City with 27 projects/4,217 rooms; Cancun, Mexico, with 24 projects/11,541 rooms; Guadalajara, Mexico, with 21 projects/2,767 rooms; and Sao Paulo with 16 projects/2,667 rooms.

Hotel franchise companies with the largest construction pipelines in Latin America are Marriott International with 118 projects/20,343 rooms; Accor with 97 projects/12,742 rooms; Hilton at a record high 92 projects/12,960 rooms; and InterContinental Hotels Group (IHG) with 60 projects/7,334 rooms. These four companies account for 54% of the projects in the total construction pipeline.

Leading brands in the pipeline are Accor’s Ibis brands with 66 projects/8,455 rooms, Hilton Garden Inn recording an all-time high of 25 projects/3,441 rooms and Hampton by Hilton with 24 projects/2,850 rooms. These are followed by Marriott’s Fairfield Inn with 16 projects/2,359 rooms and IHG’s Holiday Inn Express with 16 projects/1,955 rooms.

COVID-19 has had an unprecedented impact on the world and the hospitality industry. LE’s market intelligence department has and will continue to gather global hotel intelligence on the supply side of the lodging industry and make that information available, but it is still early to predict the full impact the pandemic will have on the lodging industry, the company reports.