Latin America’s Hotel Construction Pipeline Lowest in Eight Years

According to Lodging Econometrics’ (LE) year-end 2020 Construction Pipeline Trend Report for Latin America, the Latin America Hotel Construction Pipeline stands at 632 projects/109,597 rooms, down 11% by projects and 15% by rooms, year-over-year (YOY). These are the lowest project and room counts seen in as many as eight years in the region.

Projects currently under construction remain primarily unchanged YOY to close out Q4 ’20 at 329 projects/57,300 rooms. Projects scheduled to start construction in the next 12 months are at 171 projects/31,729 rooms. Projects in the early planning stage are at 132 projects/20,568 rooms at the Q4 close. With the exception of the under-construction stage, the other two stages of the pipeline saw declines of 20% or more by projects and rooms YOY.

Through the fourth quarter of 2020, 69 new hotels/12,777 rooms debuted in Latin America, the fewest number of openings the region has seen in this real estate cycle. Twenty-three of the 69 hotels that opened in 2020 opened in the fourth quarter. This brings the count of open and operating hotels in Latin America to 11,174 hotels/1,178,890 rooms. LE is forecasting 121 projects/21,862 rooms to open in 2021 and 153 projects/24,275 rooms to open in 2022.

The top two countries for hotel construction in Latin America are Mexico with 220 projects/39,093 rooms and Brazil follows with 116 projects/17,576 rooms, the lowest recorded number of projects and rooms for this country. Next is Peru with 43 projects/5,656 rooms, then the Dominican Republic with 26 projects/5,421 rooms, and Cuba stands at 25 projects/7,685 rooms.

Cities in Latin America with the largest pipelines include Lima, Peru, with 32 projects/4,588 rooms; Mexico City with 24 projects/3,413 rooms; Cancun, Mexico, with 21 projects/10,767 rooms; Guadalajara, Mexico, with 21 projects/2,787 rooms; and Sao Paulo with 15 projects/2,592 rooms.

Hotel franchise companies with the largest construction pipelines in Latin America are Marriott with 106 projects/16,999 rooms, Accor with 100 projects/12,990 rooms, Hilton at a record high 96 projects/13,746 rooms, and InterContinental Hotels Group (IHG) with 57 projects/6,682 rooms.

Leading brands in the pipeline are Accor’s Ibis brands with 71 projects/9,074 rooms, Hilton Garden Inn with 26 projects/3,512 rooms and Hampton by Hilton with 25 projects/2,983 rooms, a record high project count. These are followed by IHG’s Holiday Inn Express with 15 projects/1,828 rooms and Marriott’s Fairfield Inn with 12 projects/1,724 rooms.

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