What the majors are doing in South America

GUAYAQUIL, Ecuador — Worldwide hotel brands are working with local partners, they're in the South America for the long run, and they're rounding out their portfolios in this exciting market.

From left: Roland Mouly, Carlson Rezidor; Philippe Trapp, Accor; Stephanie Ricca, Hotel News Now (moderator); Camilo Bolanos, Hyatt and Craig Mueller, IHG.

From left: Roland Mouly, Carlson Rezidor; Philippe Trapp, Accor; Stephanie Ricca, Hotel News Now (moderator); Camilo Bolanos, Hyatt and Craig Mueller, IHG.

By Colleen Isherwood, Editor

GUAYAQUIL, Ecuador — Major worldwide hotel brands are working with local partners, they're in the South American hotel business for the long run, and they're working hard to round out their portfolios in this exciting market.

Representatives from seven major hotel companies outlined their companies' plans in two View from the Top sessions at the South American Hotel and Tourism Investment Conference (SAHIC), held Sept. 25-27 in Guayaquil Ecuador, and attracting approximately 400 investors.

Accor

AccorHotels has had a South American presence almost 40 years, and now has 248 hotels in Brazil alone, Philippe Trapp, executive VP operations, luxury and upscale South America, told a panel moderated by Stephanie Ricca of Hotel News Now. The company has 290 hotels with more than 46,000 rooms in the Latin American region overall. 

Brands represented include Ibis, Mercure, Novotel and Adagio. Accor also has what Trapp called “the new kid on the block,”  a Mama Shelter hotel in Rio de Janeiro, which is more of a restaurant with rooms; and they just launched a new brand during SAHIC, called Jo and Joe and aimed at the hostel market. 

The new brand blends the best of private-rental, hostel and hotel formats, Accor announced. The goal is to have 50 properties by 2020, with locations ranging Paris and Bordeaux in 2018, as well as Warsaw, Budapest, Rio and São Paulo.

“The economic outlook is not the best,” said Trapp, “but there are opportunities. When everything goes bad, it's not bad for everyone.”

Carlson Rezidor

Carlson Rezidor Hotel Grouphas been in Latin America for 20 years, and has more than 50 hotels signed and open, said Roland Mouly, VP development for Latin America. Radisson is well-positioned in the area. Radisson Blu hotels are open in Santiago, Chile; and Sao Paulo and Belo Horizonte, Brazil. The first South American Radisson Red should open in the next couple of months in Campinas, Brazil. 

Mouly said Carlson Rezidor has a strong presence in North America and Europe and that there is a need for a strong presence in Latin America, where the company operates primarily on a franchise model. “We have the feeder markets,” he said. “We have a strong relationship with a local operator in Brazil, but outside Brazil, we need another strong operator.”  

Hyatt

Hyatt has a good base in South America, with 30 hotels open and 20 more planned by the end of 2018, said Camilo Bolanos, VP development and real estate, Latin America.  All 10 Hyatt brands are available on the continent. He added that the Hyatt Centric in Montevideo, Uruguay had just won SAHIC's Best New Hotel of the Year Award. 

While Carlson franchises in South America, Bolanos said Hyatt manages every single hotel outside of the U.S. They are starting to look at third party operators in Mexico and Colombia, and beyond 2017/18, the pipeline starts to include more franchising.

IHG

Craig Mueller of IHG, who won SAHIC's Hotelier of the Year Award, told the delegates that IHG has been in the region for a long time, recently celebrating their 70th anniversary. IHG has 220 hotels with 40,000 rooms, with most of their brands represented. Holiday Inn and Holiday Inn Express are the core, mature brands, while Crowne Plaza is also well represented. There are 25 InterContinental Hotels, but Hotel Indigo and Kimpton haven't come to to South America yet.

Mueller said there's a burgeoning middle class, and brands are important to consumers in South America. “There are so many different countries — it's a matter of staying focused, staying long-term.”

From left: Jonathan Worsley, Bench Events (moderator);  Ted Middleton, Hilton; Laurent De Kousemaeker, Marriott and Paulo Pena, Wyndham Hotel Group.

From left: Jonathan Worsley, Bench Events (moderator); Ted Middleton, Hilton; Laurent De Kousemaeker, Marriott and Paulo Pena, Wyndham Hotel Group.

Hilton

In another panel discussion moderated by Jonathan Worsely of Bench Events, Ted Middleton, SVP development, Latin America and the Caribbean for Hilton, said they have 93 hotels with 16,000 rooms open and a pipeline of 55 hotels and 7,880 rooms. Hilton expects to open its 100th hotel in the region soon. Ten of Hilton's 13 brands are currently in Latin America, with 78 per cent in the focused service sector, usually a Hilton Garden Inn or Hampton Inn by Hilton. New countries include Bolivia, where they have their first Hampton, and Guatemala, which has its first Hilton Garden Inn. In the past 12 months, they have added their first DoubleTree in Colombia.

Middleton added that Hilton's major market int he area is Mexico, with 44 hotels and 15 under construction. In Colombia, they had two hotels three years ago, an now they have 12 with six more under construction. The robust Colombian pipeline is driven by government tax incentives, which will end next year.  Hilton plans to open seven new hotels in Peru over the next several years — encouraged by President Pedro Pablo Kaczynski's economic policies. Brazil continues to go through a difficult time, by Hilton is working with strategic partner Atlantica. “We feel very good about that relationship,” said Middleton.

Wyndham

Paulo Pena, Wyndham Hotel Groups' president and managing director for Caribbean and Latin America, said the company has 165 hotels, including 16  brands in 18 countries. New markets include Wyndham hotels in Argentina and Brazil; Baymont and Tryp by Wyndham in Mexico, Paraguay and Chile. Pena identified their six key markets as Brazil, Mexico, Argentina, Colombia, Peru and Chile. They also recently opened a Wyndham at Quito Airport.

Wyndham has 29 hotels in Mexico, 35 in Argentina (including 33 Howard Johnsons). They just built their 30th hotel in Brazil “with very good local partners.

“As the economy faces challenges, non-branded hotels under construction are looking for conversion opportunities,” Pena said. Wyndham is 100 per cent franchised in the region.

Marriott

“As of Friday, we had 5,700 hotels in 100 countries and 1.1 million rooms,” said Laurent De Kousemaeker, chief development officer Caribbean and Latin America for Marriott, referring to the recent deal to take over Starwood. The pipeline now includes 330,000 rooms globally over the next two to three years. 

Marriott has 100 hotels South America now, with a pipeline that could bring it to 208 hotels in the region. Starwood had a head start, having been there since 1962, while Marriott came in 1990. In South America, Starwood added 74 hotels to the existing total of 29, giving Marriott access to Uruguay, Paraguay and Argentina. In the Caribbean, Starwood has already signed a deal for three hotels with Cuba, the first U.S. hotel group to do so in many years.

De Kousemaeker said the Starwood acquisition has economies of scale, and that the company will save $250 million at the corporate level. Asked if Marriott will keep all 30 brands, De Kousemaeker said contracts don't allow them to rebrand. “Ten years ago we had 10 brands. Just last year, we had 20 brands, but were still not in certain segments. Even now, with 30 brands, we are missing [presence in] the leisure space.”

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