News for the Hospitality Executive |
August 17, 2011 - Latin America’s Total Construction Pipeline rose for a sixth quarter in a row to 528 projects/85,417 rooms in Q2 2011. Total projects are now up 14% and rooms up 6% year-over-year (YoY), propelled by continued rapid Pipeline growth in South and Central America, with projects up 28% and 21%, respectively, in the past year. At
225 projects/35,803 rooms, Latin America’s Under Construction project
counts
are up 13% YoY, but down 6% by rooms, as the average size of new
projects
entering the Pipeline has declined by 11 rooms due to the higher
proportion of
smaller-sized Upscale and Midscale projects. Scheduled Starts in the
Next 12
Months, at 139 projects/24,853 rooms in Q2, are up 3% by projects and
8% by
rooms from Q2 2010. At 164 projects/24,761 rooms, Early Planning
projects are
up 28% and rooms by 30% YoY. Project counts have surpassed the previous
Q1 2008
peak by 31%. Early Planning totals are expected to continue to build,
as many
New Project Announcements (NPAs) into the Pipeline are entering in this
stage.
Developer
enthusiasm is strong in South America,
where economic trends are outpacing much of the rest of the world. With
298 projects/45,658
rooms, the region’s Total Pipeline is at its highest since Q1 2009.
Annualized
New Project Announcements into the Pipeline are at their highest since
2008. Brazil’s Total Pipeline,
with 184
projects/29,790 rooms, represents 62% of South America’s total
projects. Over
the last 18 months, the nation’s Central Bank has increased interest
rates
seven times in an effort to slow rapidly rising inflation and cool its
overheated economy. These rate increases are impacting migration up the
Pipeline toward construction, resulting in a build-up of projects in
Scheduled
Starts and even more so in the Early Planning stage, which are at their
highest
level since 2007.
Central
America’s Total Pipeline is at a new high of 53
projects/10,674 rooms. Panama and Costa Rica have 58% and 26% of total
projects, respectively. With 110 projects/16,226 rooms, Mexico’s Pipeline continues to trend
downward, as social unrest,
particularly in the border towns, have hampered tourism and impacted
development. In an effort to encourage investment and development, the
Central
Bank has reduced interest rates to new cyclical lows.
SPOTLIGHT -
BRAZIL’S WORLD CUP CITIES - TOTAL PIPELINE NOTABLE DEVELOPMENTS & NEW OPENINGS
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Contact: Lodging Econometrics |