Two “U-words” are making the rounds of the global hotel circuit right now. I think you can guess the first one?
Yes, “uncertainty.” That one needs no elaboration. We all feel it right now in every element of business and economics.
The other U-word is uncertainty’s exact opposite; it’s “ultraluxury.”
This week I’m at the ALIS CALA event in Coral Gables, Florida, where hoteliers from across Latin America and the Caribbean gather, and both U-words are in heavy rotation, perhaps the second more so than the first.
Make no mistake: Hoteliers in this region know that economic turmoil, recession and stock volatility in the United States will have an impact on travel and capital flow into Latin America. But right now, the mood is generally optimistic that while the American traveler may slow leisure and business travel into the region down for a while, that demand will stabilize. In the meantime, intra-region travel is picking up, and Canadians and Europeans are responding to strong marketing programs driven particularly by Caribbean nations in recent years.
After all, if there’s any global region that knows how to recover resilience amid crisis, it’s Latin America and the Caribbean, right? So, no big deal for now.
The second U-word is doing a lot to keep hoteliers in Latin America happy amid uncertainty. The spotlight firmly is on ultraluxury hotel and resort development in this part of the world. Is it a huge part of supply and pipeline? Of course not. But it’s aspirational and growing, a bright, shiny inspiration to hoteliers in a tourism-reliant region where family offices love to invest in high-end passion projects that they hold for a long time.
Brands are big drivers of the ultraluxe landscape. The well-heeled Nayara Resorts and Aman Resorts each have multiple locations with more on the way, and brands like One&Only and Four Seasons command $1,000 average daily rates easy peasy.
Is it easy to develop ultraluxury in this region? No way. Is it worth it? Sure seems like it, given travel behaviors of that group. Hoteliers like to say that the super-rich are immune to inflation and will travel to whatever overwater casita beckons at the moment, any time.
Maybe so. But I wonder for how long? Mind you, I’ve been wondering publicly just how long luxury demand can sustain at these levels for years. But I do think this region — and I make no excuses for how much I love Latin America — is the one that can pull off truly recession-proof ultraluxury travel despite all the development obstacles here. Or maybe because of them? It’s a delicate balance and precise formula that somehow comes together here.
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