CORAL GABLES, Florida — As destinations around the Caribbean and Latin America continue keep growing in popularity, IHG Hotels & Resorts’ development team wants to capitalize on that and Mexico tops the list.
In an interview during the Americas Lodging Investment Summit CALA, Paul Adan, regional senior vice president of development for Mexico, Latin America and the Caribbean region at IHG, said there’s growing demand by both travelers and hotel owners.
Currently, IHG has approximately 300 hotels open in the CALA region with another 100 in the pipeline in different stages of development. Its pipeline for new leads has expanded since the company doubled its development team in the region over the past several years.
“We’re really taking advantage of the excitement for the region, for regional travelers, national travelers, international travelers,” Adan said.
IHG’s priority is Mexico; that’s where the company sees the most opportunities and may generate 50% of its growth, he said. The remaining half of the growth comes from the rest of the region, particularly in the Caribbean, namely Puerto Rico and the Dominican Republic. It’s also become active in Central America, and it’s seeing heavy growth in Brazil.
“We’re not focused only in one country,” he said. “We really want to have solid growth for the entire CALA region.”
IHG is able to provide a range of choices for travelers in the region, with luxury offerings such as Sixth Senses as well as select-service brands such as Holiday Inn Express, Avid and Garner, one of its soft brands, Adan said. The company’s soft-brand and conversion-friendly brands have helped to drive growth in the region.
It signed two Vignette Collection properties in CALA last year along with opening one in Peru, he said. IHG will open another later this year in the Dominican Republic.
The Voco brand brings the recognition that many owners want without having to create a new identify for the hotel, he said. It’s a hard brand with the flexibility of a soft brand.
“Last year, it was the brand that grew the most in the region,” he said. “We’ve done the most deals with that. Conversions are really our growth engine right now for development in the CALA region, and Voco is our rising star under that segment.”
It’s difficult to come up with financing for new projects in CALA, Adan said. There are a couple countries where owners can get loans to develop hotels, and often they need to be part of mixed-use properties. A property with towers may have one as a hotel while the other is office space, or the project will include a branded residence component.
IHG is looking to grow its branded residences presence in CALA, he said. It’s focusing mainly on its Kimpton brand, but it also has deals in the works for or open and operating properties under the Regent, Six Senses and InterContinental brands.
“We really are focusing our growth on the branded residence phase for luxury brands or entry-level luxury in the case of Kimpton,” he said.
In 2022, IHG signed a partnership with Spain-based Iberostar Hotels & Resorts for resorts and all-inclusive hotels in CALA, Europe and Northern Africa. That immediately brought 25 resorts in CALA to IHG’s system, which has been growing since, Adan said.
The company recently opened an all-inclusive Voco property in Port St. Lucie, Florida. It has also signed a Voco all-inclusive property in Jamaica. It opened its first Kimpton all-inclusive resort in the Riviera Maya. It also has several Holiday Inn resorts in Mexico that offer all-inclusive packages, so there’s already recognition of this brand in the space which would allow further growth.
All this means that all-inclusive resorts are a big opportunity for IHG, he said.
Loyalty members "want those resorts, they want those experiences, so we really are putting a lot of effort into growing that,” he said.
IHG’s signing record in CALA grows each year, so there’s appetite from owners and developers, he said. Many of those interested are repeat owners who are coming back to add more IHG-branded properties to their portfolios.
“That's what we're shooting for, and that's really what I've been seeing over the last few years that I've been with IHG and what I measure our success by,” he said.
IHG has specialized team members in the different parts of CALA to know the markets and destinations to find the right opportunities in each location, Adan said.
“I would like to have all my brands present in all the markets,” he said. “The reality is that there are some markets that are more prone to certain brands, and what we always focus on when we make a decision is not simply on us having the IHG brand but on the return for the owner.”
By better knowing the market, IHG’s teams can make the proper recommendations, he said. All the owners want the distribution system, a lower cost of doing business and access to travelers from the U.S. and Europe. IHG, naturally, wants any of its 160 million loyalty program members going to a CALA destination to stay in one of its hotels.
“The hotel has to be the right one in each of those markets,” he said. “The demand is there. With 21 brands, we have the flexibility to being able to really have the right brand for each market and for the different opportunities.”
Helping make that happen is having franchise support teams based locally in each market to help the properties once they open, he said.
“It’s not simply bringing a U.S. mentality, a U.S. way of doing things and implementing them in the region,” he said. “It’s a very well-recognized global brand but then providing the local support to the local hotels.”