Bogotá, Buenos Aires, Lima, and Santiago emerged as important strategic markets for Latin America in 2011 according to a recent hotel investment study by Jones Lang LaSalle. FocusOn: Strategic Spots for South American Hotel Investment, a proprietary research report carried out by Jones Lang LaSalle Hotels, highlights four of the most potential investment hotel sites in South America. The list was developed on the basis of the strong demand bases of the market and possibilities for branded investment. Although Brazil, by far South America's largest economy and most populous country, offers the widest range of growth opportunities, a number of cities in other countries, including non-Brazilian ones, are subject to good demand fundamentals and favorable investment conditions, resulting in real-estate opportunities. directory
"There are four major market locations in Bogotá, Colombia; Buenos Aires, Argentina; Lima, Peru; and Santiago, Chile," said Ricardo Mader, executive vice president, hotel Jones Lang LaSalle, So Paulo. "Real GDP is projected to increase at a compound rate of annual growth of 4 percent or more in those nations, far above growth forecasts for most mature economies by 2015."
Due to the relatively sophisticated financial markets of the country, Santiago has become a prime hotel investment location. Santiago has often acted as a test market for South American international brands. As a consequence, the most international, four- and five-star hotel rooms are in the four locations studied.
The demand of Santiago will continue to support chances to build new hotels in the long term owing to the stability and development prospects of the nation."
Las Condes and El Bosque are presently the most sought-after locations for hotel building. As the luxury sector of Santiago is well supplied, Santiago's main possibilities include building both restricted and highly competitive hotels or making smart takeovers and conversions to establish a foothold "Mader said. Mader added.
After So Paulo, Buenos Aires is South America's second biggest metropolitan region. "Despite significant reductions in performance in 2009, visitor patterns and economic bases are recovering, and investors continue selectively to invest in Buenos Aires," stated Clay Dickinson, executive director of Jones Lang LaSalle Hotels.
There are 14 hotels in the city with four- and five-star institutional accommodations with a total of around 3,200 rooms. "The hotel sector is scheduled to grow to 3,800 rooms by 2014 with the launch of around 5 additional hotels," Dickinson added. The restricted starting base of rooms would prevent the development of an over-supply in this manufacturing chain. "Buenos Aires' continuing demand for the main tourist destination in South America is anticipated to produce significant operational benefits for existing and new hotel supplies," Dickinson added.
The need for hotels is growing in Bogotá, Colombia's leading tourist gateway and distribution hub in the area. Colombia is about to recover its foothold. According to Cotelco, the RevPAR Hotels in Bogotá rose by 4% year on year, compared to the same period the prior year, in July 2010.
Because of the past political instability in the nation, unlike So Paulo and Santiago, Bogotá has not experienced a significant amount of growth in hotels during the last 15 years. "This has now altered with the introduction of several new hotels. The stock in institutional, four- and five-star hotels is expected to grow by 37 percent between now and 2012, with plenty of investment possibilities, including potential conversions and co-management ""Dickinson stated tracts.
Lima has experienced less international hotel development than Buenos Aires and Santiago, and there are also few international hotel companies in those cities in the sector. "Only three four- and five-star institutional hotels are planned to operate in the area of over nine million in the next three years. Since there is no increase in fresh supply in the city, operational fundamentals will continue to expand over the medium future" Her ideas were sent to Liliana Ribeiro, vice president of Jones Lang LaSalle Hotels in So Paulo.
Market possibilities for the building of new hotels in all categories still exist in Lima, since the city's economy is expanding. "There is virtually no premium selected hotel brand in Lima, and that continues to be an investment opportunity," said Ribeiro.
Bogotá, Buenos Aires, Lima and Santiago, domestic and international hotel investors should be kept on their radar as economic and demographic trends in the cities continue to improve.