October 2012 - The Latin America Construction Pipeline stands at 590 projects/ 96,777 rooms, up year-over-year (YoY) by 10% and 12% respectively.  The Pipeline is at its highest level in 13 quarters and next year will likely exceed its peak set in 2008.
 
LE’s Forecast for New Hotel Openings in 2013 is 120 hotels/ 18,183 rooms, which will exceed the previous cycle peak set in 2010.  2014 will escalate forward to 170 New Hotel Openings having 25,089 rooms, while 2015 and ’16 are expected to rise to even higher levels.
 
Brazil, the economic leader in the region, has the largest Pipeline at 259 projects/ 43,827 rooms.  Brazil has the fourth largest Pipeline in the world, behind the U.S., China and India, and represents 45% of all development activity in Latin America.  Economic development is booming, accelerated by a growing export economy and having been selected to host both the FIFA World Cup in 2014 and the Summer Olympics in Rio de Janeiro in 2016.
 
New Openings in Brazil will rise to 46 hotels/ 8,182 rooms in 2013, and in 2014 they will catapult forward to 87 hotels/ 13,625 rooms.  That will represent 54% of all forecasted New Openings in Latin America.  2015 and ‘16 are expected to be even higher.  Pipeline growth is expected to accelerate further as the Brazilian government is actively working with the private sector to build more hotels quickly.  It’s part of a massive undertaking to improve the tourism infrastructure.  As a result, hotel renovations are near peak levels.  There are 26 announced major renovation projects underway having a total of 5,161 rooms.  Five of the projects represent Brand Conversions.  70% of the projects are larger upscale hotels, mostly located in other major cities.
 
Other Latin America Pipeline Notes
On a much smaller scale, a few Other South American Countries are also seeing Pipeline growth.  Chief among them is Argentina.  At 49 projects/ 5,617 rooms, it has the world’s 16^th largest Pipeline.  Excluding Brazil, of the 13 other South American countries, half of forecasted New Hotel Openings will come from Argentina.  Columbia is next in significance having a Pipeline of 29 projects/ 5,189 rooms.
 
The Pipeline in Mexico peaked in 2Q 2008 and has been in decline since, but is still the world’s 9^th largest Pipeline by project count.  The total Pipeline recently hit a four-year low at 89 projects/ 12,836 rooms.  Hotels Under Construction is also at a four-year low.  As a result, New Hotel Openings are expected to reach a cyclical bottom at 12 hotels/ 1,719 rooms in 2013 before rebounding slightly in 2014.
 
In the Caribbean, New Hotel Openings will record a cyclical low in 2012 at a paltry 6 hotels/ 618 rooms.  Of the 39 hotels forecast to open from 2012 to 2014, 32 of them will be less than 200 rooms, reflecting the ongoing economic problems with larger destination resorts, a number of which are available for sale at prices significantly below replacement cost.
 
Central America, at 50 projects/ 9,574 rooms, has the smallest Pipeline of any region in Latin America.  Development is concentrated in the major capital cities, with 65% of all development in the luxury, upper upscale and upscale segments.  Considering the chain scales, the projects sizes are relatively small.  70% of forecasted New Hotel Openings will be under 200 rooms.
 
Panama continues to drive the Central America Pipeline with 31 projects/ 5,732 rooms.  The country, Panama City in particular, is benefiting from the economic stimulation associated with the widening of the Panama Canal.  After a development surge late in the last decade, the Panama City Pipeline has slowly declined to 21 hotels/ 4,309 rooms, but it still represents a significant 45% of all Pipeline rooms in Central America.

About Lodging Econometrics
Launched in 1995 with the encouragement of Wall Street analysts and many Lodging Industry leaders, Lodging Econometrics (LE) is the recognized authority on all hotel real estate including the Development Pipeline and the Sale and Transfer of Lodging Real Estate nationwide. LE also compiles and maintains the Industry's Census of Open and Operating Hotels including the Names of Owners & Management for more than 60,000 hotels in the U.S. and Canada.