LE: Latin America’s Hotel Construction Pipeline Remains Sluggish

PORTSMOUTH, NH—In the recent Latin America Hotel Construction Pipeline Trend Report, analysts at Lodging Econometrics (LE) state that the total construction pipeline stands at 702 projects/124,050 rooms, down 2% by projects and up less than 1% by rooms, year-over-year (YOY).

Projects presently under construction stand at 324 projects/57,193 rooms. Projects scheduled to start construction in the next 12 months stand at 203 projects/39,487 rooms and those in the early planning stage are at 175 projects/27,370 rooms.

In the first quarter of 2020, 22 new hotels/3,825 rooms opened throughout Latin America, while new project announcements into the pipeline recorded a new all-time low of 36 projects/3,596 rooms.

Mexico leads Latin America’s construction pipeline with 222 projects/40,639 rooms. Next is Brazil, standing at 137 projects/22,607 rooms. Peru follows with 41 projects/5,702 rooms; Colombia is next with 36 projects/5,899 rooms and then the Dominican Republic with 33 projects/8,105 rooms. Collectively, 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/4,691 rooms; Mexico City, Mexico, with 26 projects/4,358 rooms; Cancun, Mexico, with 23 projects/11,234 rooms; Sao Paulo, Brazil, with 18 projects/3,294 rooms; and Guadalajara, Mexico, with 18 projects/2,302 rooms.

Top hotel franchise companies in Latin America’s construction pipeline are Marriott International with 129 projects/22,571 rooms, Accor with 98 projects/13,049 rooms, Hilton at a record high 88 projects/12,345 rooms, and IHG with 61 projects/7,116 rooms. These four companies account for 54% of the projects in the total construction pipeline.

The top brands in the pipeline are Accor’s Ibis brands with 67 projects/8,868 rooms, Hampton by Hilton with 25 projects/2,952 rooms, and Hilton Garden Inn with 23 projects/3,189 rooms. These are followed by Marriott’s Fairfield Inn with 17 projects/2,489 rooms and IHG’s Holiday Inn Express with 17 projects/2,075 rooms.

COVID-19 did not have a full impact on first quarter 2020 Latin America results reported by LE. Only the last 30 days of the quarter were affected. LE’s market intelligence department has and will continue to gather the necessary global intelligence on the supply side of the lodging industry and make that information available. It is still early to predict the full impact of the outbreak on the lodging industry.