Hilton Plays Significant Part in Latin America Hotel Growth

The hospitality giant is on track to open its 100th hotel in Latin America this year.

McLean, Va.—Although some structural challenges persist, the Latin American hospitality market continues to undergo what might be called a “slow boom,” and Hilton brands are in the thick of it.

Despite issues around global demand and sagging commodity prices, multiple large economies in Latin America continue to see an expanding middle class and significant public and private investment in infrastructure, manufacturing and services, along with steady, albeit slower-than-expected economic growth, according to a JLL white paper presented at the HOLA (Hotel Opportunities Latin America) Investment Conference, held May 11–13 in Miami. In the hospitality sector, the report indicates, key Latin American countries will register demand growth that is disproportionately higher than their expected GDP growth.

Approximately 449,500 new hotel rooms dispersed across more than 300 emerging markets are projected between now and 2025 in Argentina, Brazil, Chile, Colombia, Mexico and Peru, a 57 percent increase in the amount of rooms currently available.

One major trend is the proliferation of branded hotel supply across all of these countries. “By 2025, branded assets are expected to surpass independent products,” according to JLL.

“In Latin America, we see significant growth and continued interest in development, thanks to steadier political landscapes, stable economies, a growing middle class and a push to generate tourism,” Ted Middleton, senior vice president of development, Latin America for Hilton, told Commercial Property Executive. “While the market dynamics differ country by country, we see a general increased interest in branded hotel supply, with investors recognizing the benefits that an established brand can deliver.”

Hilton currently has more than 16,000 rooms across a portfolio of more than 90 hotels and resorts in Latin America, in addition to a development pipeline of more than 60 projects throughout the region.

Those projects span Argentina, Belize, Chile, Colombia, Costa Rica, Ecuador, Honduras, Mexico, Panama, Paraguay, Peru and Uruguay, with Mexico, Colombia and Peru driving the largest percentage of Hilton’s growth, Middleton said.

As of Sept. 30, those three nations alone accounted for:

•  Mexico: 30 properties and more than 3,800 rooms in the pipeline;
•  Colombia: 10 properties and nearly 2,000 rooms in the pipeline;
• Peru: 7 properties and nearly 1,000 rooms in the pipeline.

In all, Hilton is on schedule to have its 100th hotel in Latin America by year’s end.

A few Hilton brand milestones in new markets include:

•  Hampton by Hilton Santa Cruz, Bolivia;
• Hilton Garden Inn properties in Guatemala, Brazil, Peru and Uruguay;
• DoubleTree by Hilton hotels in Colombia;
• Curio – A Collection by Hilton hotel in Argentina;
• The Hilton Santiago Las Condes, the company’s first Hilton Hotels & Resorts property in Chile.

The 401-key Hilton Santiago Las Condes (see photo) will form part of the Parque Arauco Kennedy Shopping Mall complex expansion project, scheduled to begin construction next year and open in 2021.

“Hampton by Hilton and Hilton Garden Inn continue to prove successful in attracting both developers and travelers” and represent about 70 percent of Hilton’s Latin America development pipeline, Middleton said.

Hilton also sees continued interest in the Hilton Hotels & Resorts brand, primarily for full-service hotel management agreements in key gateway cities, and in DoubleTree by Hilton, for full-service hotel conversions, he added.

The company’s luxury brands are also seeing rising interest following the debut of the first Curio – A Collection by Hilton hotel in Latin America last year and the upcoming openings of two Conrad hotels, in Mexico and Colombia, according to Middleton.