CARTAGENA, Colombia ā Business and group travel is picking up in Latin America, while leisure travel ā especially to high-end resorts ā continues to dominate the demand landscape, and developer interest is following those trends.
Luxury, lifestyle, resort and all-inclusive brands have been top priority for many of the worldās largest brand franchisors as they expand their Latin American footprints.
Hyatt Hotels Corporation's 2021 deal to acquire Apple Leisure Group has been a catalyst for expansion in these types of hotel brands, particularly in Mexico and the Caribbean, said Camilo BolaƱos, Hyattās senior vice president of development for Latin America and the Caribbean.
During a panel at the recent SAHIC Latin America & The Caribbean Hotel & Tourism Investment Forum, BolaƱos said Hyatt is taking its all-inclusive brands into higher-end luxury as well.
āWe have increasingly been tweaking the model to increase sophistication and elevate experience to cater to the luxury guest,ā BolaƱos said, referring to the Secrets brandās new Impressions sub-brand, which is a more exclusive, luxury resort-within-a-resort offering the company debuted last year at Secrets Impression MoxchĆ© in Mexico. Another iteration is opening soon in Isla Mujeres, Mexico.
Luxury and lifestyle are fueling IHG Hotels & Resorts' expansion in the region as well, said Paul Adan, regional senior vice president of development for Latin America and the Caribbean at IHG.
āOver the last several years, [we've used] the philosophies of acquiring and organically growing luxury and lifestyle around Six Senses, Regent, Vignette Collection and weāve seen success with that around the world,ā Adan said.
IHG signed the first Americas hotel in its Vignette Collection in Mexico last year, the El Gran Encomendero, which will be a new-build hotel in Valladolid. The company acquired the Six Senses brand in 2019, and has resorts, several with residences, planned in Belize, Costa Rica, Ecuador and Grenada.
Adan stressed that developer interest drives a lot of expansion at the end of the day, and in Latin America, that appetite is skewed to luxury and lifestyle brands that can include branded residences.
āWeāre seeing a lot of luxury because we can do luxury resorts with branded residences that help finance development and put the deal together,ā he said.
Luxury and lifestyle continue to be a focus for Marriott International in the region as well, said Bojan Kumer, Marriott's regional vice president of hotel development for the Caribbean and South America. While Mexico and the Dominican Republic are the companyās biggest focus areas in the region, Brazil has been āa big success in the last few years,ā he said, particularly for luxury and lifestyle.
In 2022, Marriott converted an existing hotel into the JW Marriott Hotel SĆ£o Paulo and has a Westin and a W hotel also under construction in SĆ£o Paulo. Other recent conversions in the region include the Royalton Riviera Cancun into Marriottās Autograph Collection, as part of Blue Diamond Resortsā affiliation with Marriott Bonvoy; and the opening of Sanctuary Cap Cana, an all-inclusive resort in Dominican Republic, as the first luxury all-inclusive resort to join Marriottās The Luxury Collection brand.
Select-Service, Business Hotel Expansion
Higher rates of domestic travel among a growing middle class, along with the return of business and group travel, also makes select-service hotels attractive to developers, speakers said.
Hilton in particular has been consistent throughout the past three years in ācreating what we call the branded effect,ā said Juan Corvinos, Hilton's senior vice president of development and A&C for Latin America and the Caribbean.
The companyās Tru by Hilton brand is gaining ground in Mexico and Brazil, Corvinos said, and the company continues to expand its stalwart Hampton brand throughout the region. Laying that base then allowed the company āto put luxury and all-inclusive into the market where they belong, and itās been very stable,ā he said.
Marriottās 2022 acquisition of the Mexico-based City Express brand will add more than 17,000 rooms to Marriottās select-service portfolio in the region.
Kumer said the companyās investors and consumers in the region had relayed to Marriott the need to fill this gap, and the company listened.
āWeāre buying the brands, not the hotels, and the idea is to grow the franchises not only in Mexico, but Central America and most importantly to South America,ā he said. āBrazil will most likely be our biggest growth market, followed by Argentina, Peru, Chile and Colombia.ā
While luxury and all-inclusive growth in the region is āaggressiveā for Hyatt, BolaƱos said āthe traditional brandsā for business and groups such as Hyatt Regency and Grand Hyatt āare still our bread and butter at the end of the day.ā
He said that even though the pandemic paused a lot of development, most projects didnāt truly stop, and Hyatt fielded interest from developers for select-service and extended-stay hotels also.
At the end of the day, BolaƱos said projects in the region typically āare driven by owners with very specific vision of they want.ā
āFor us itās about finding solutions for each individual owner, their project and how to best approach it in terms of branding and structuring a proposal,ā he said.
Adan agreed that there is regional demand to develop brands below luxury classes ā for IHG, this includes Holiday Inn and Holiday Inn Express ā but at the end of the day, itās about ādoing projects that make sense,ā he said.
āWe all have a lot of brands and we all want to see them grow, but at the end of the day, whatās going to go in is what makes sense for investors,ā he said. āWe need to be responsible and guide investors on the parameters for projects that make sense.ā