JLL has released new research indicating the anticipated growth of lodging developments in Latin America. Presented at the Hotel Opportunities Latin America (HOLA) Investment Conference, the firm’s data showed an increased demand for hotel supply in Mexico, Chile, Argentina, Brazil, Colombia, and Peru. The five nations account for 75 percent Latin America’s total population and 85 percent of the region’s GDP.
The report, “Impact of Economic Transformation on Latin America’s Lodging Industry,” confirms significant investment in hospitality projects fueling lodging demand are taking place in some of the world’s emerging nations despite numerous economic hurdles.
Peru boasts the highest growth rate of the six profiled nations, with an 8.3 percent annual growth rate in quality lodging over the next 10 years. And as the largest and most diverse economy in Latin America and the host of both the 2014 FIFA World Cup and the 2016 Summer Olympics, Brazil has also seen major investment with more than 30,000 guestrooms currently under construction. Argentina holds Latin America’s third largest hotel room supply, but should anticipate a spike in the next two to three years according to the report. Chile can also expect growth in the coming years with an anticipated 46,700 guestrooms added by 2025. Already the region’s most advanced country in the hotel market, Mexico is also expected to have its hotel supply ratio rise from 2.6 to 3.8 per 1,000 inhabitants.
“We estimate that 449,500 new hotel rooms, including a number that are already in the pipeline, could be supported in the six profiled countries between 2015 and 2025,” says Clay Dickinson, managing director for JLL’s Hotels & Hospitality group’s Latin America region. “This gross increase is expected to be dispersed across more than 300 local lodging markets of various types and sizes, representing a 57 percent increase in the amount of quality hotel rooms currently available.”
The report also noted a significant spike in the number of branded projects either in development or launched in the last three years. The branding trend is expected to grow so steadily that branded assets will surpass independent projects by 2025.
