News for the Hospitality Executive
Brazil's Lodging Fundamentals Continue
Upward Trajectory with Record Hotel
Gross Operating Profits for Owners of 36.5% of Total Revenue
SAO PAULO, Aug. 8, 2012 -- Brazil's lodging fundamentals remain positive as the country experienced a double-digit rise in average daily rates (ADR) and record revenue per available room (RevPAR) growth in 2011. Steady performance levels coupled with efficiencies in hotel operations led to record profits with a historic high of 36.5 percent gross operating performance for hotels, according to Jones Lang LaSalle Hotels' annual, bi-lingual research study, Lodging Industry in Numbers – Brazil 2012.
Market fundamentals hit record highs
Brazil's occupancy rate rose by 2.2 percent year-over-year in 2011, which is comparable to the real GDP growth rate for the year. The Brazilian hotel average occupancy ended the year near 70 percent. Additionally in 2011, Brazilian hotel owners and operators experienced accelerated growth of ADR by more than 17.2 percent in 2011 over 2010 levels, resulting in city hotels reporting record RevPAR growth of 20.5 percent.
For the first five months of 2012, occupancy rates are slightly lower than the same period 2011; however, ADR reported a high growth rate of 17.5 percent.
Investors eye Brazil
Global events, such as the FIFA Soccer World Cup in 2014 and the 2016 Summer Olympic Games in Rio de Janeiro, keep opportunistic investors eyeing the market. Both domestic and international buyers are taking note of the market's progression as the foremost investment target in Latin America. Stellar performance and profit has made Brazilian hotels an attractive investment option featuring solid returns.
"Companies have already started jumping into the game, snatching up prime opportunities to acquire or develop in the region due to the consistent and on-going demand. Host Hotels & Resorts recently announced it plans to develop a 150-room Novotel hotel and a 255-room Ibis hotel in Rio de Janeiro one mile from where the Olympic Games will be hosted. Accor also acquired the South American portfolio of Grupo Posadas which comprises 11 hotels in Brazil," said Ricardo Mader, Executive Vice President of Jones Lang LaSalle in Brazil.
Surge in demand, restricted supply pipeline
The Brazilian lodging industry's healthy hotel performance remains underpinned by the imbalance between supply and demand. Brazil's, nearly 10,000 hotels, represented by nearly 500,000 rooms, hosted more than 5.4 million international tourists in 2011, representing a rise of 5.8 percent year-over-year. Hotel supply growth is estimated at only 238 hotel projects in the next three years encompassing 38,854 rooms. Additionally, economic decentralization led to new development opportunities for hotels in cities where large infrastructure projects, such as mining, oil refineries and gas, are underway. These regions are target areas for investment, as they are underserved with adequate quality hotel stock.
"There is still great room for growth in Brazil's hotel supply, especially outside of the major cities. Unlike past World Cup and Olympics host cities, we expect Sao Paulo and Rio de Janeiro to absorb supply additions more easily and maintain demand well past the games, given the cities' deficiency in supply from the get-go," added Manuela Gorni, Senior Vice President of Jones Lang LaSalle Hotels in Sao Paolo.
Brazil 's stabilizing economy backs hotel market progress
Brazil was one of the first emerging markets to stage an economic recovery, and continued stabilization of the country's economy bodes well for the lodging market. As the country's per capita income continued growing, leisure travel increased and represented 21.3 percent of the market mix, second only to corporate travel. The resort segment recorded the strongest recovery in 2011, reaching 50 percent occupancy and total revenue per occupied room of R$683.
"Overall, the Brazil lodging industry fundamentals remain extremely positive for the future. The next five years, with an influx of visitors to the international games, are expected to boost the still under-developed transaction market, and push operating profits margins even further," concluded Clay Dickinson, Executive Vice President for Jones Lang LaSalle Hotels and leader of the firm's Strategic Advisory and Asset Management division in Latin America.
Jones Lang LaSalle Hotels in partnership with Brazil Forum of Hotel Operators launched its annual, bi-lingual research study, Lodging Industry in Numbers in 2010. The Brazilian hospitality market data compilation is the largest surveyed sample available in the region and includes more than 400 hotels, condo hotels and resorts and serves as a benchmarking tool for both domestic and foreign hotel investors and owners for use in feasibility studies for investments in Brazil and during the budgeting process for existing properties.
Jones Lang LaSalle Hotels is a global real estate services firm focused exclusively on hotels & hospitality. We provide acquisition and financing advice, valuations, investment sales and asset management for luxury hotels, select service and budget hotels, smaller hotels and pubs, from single assets to large portfolios and mixed-use developments.
In the last five years we completed nearly 4,000 advisory and valuation assignments and more sale, purchase and financing transactions than any other hotels real estate firm in the world...worth over $30 billion. With 44 offices in 20 countries, no other firm is better connected. Through our depth and breadth of research and experience we know the market at every level, we know the players and we know how to get results.
in Global Real Estate Markets Increases, Aiding Investors and
Occupiers, According to Jones Lang LaSalle / June 2012
Outlook for Hotel Performance in Latin America, According to Jones Lang
LaSalle Hotels' Latin America Hotel Investor Sentiment Survey; Markets
in Brazil, Mexico, Colombia and Chile Rank Most Optimistic for
Investment Outlook / June 2012
Hotel Transaction Volume Reaches $5.1 Billion Thus Far in 2012;
According to Jones Lang LaSalle Hotels' Database Average Price Per Key
for Single-Asset Transactions Rises 5% on Full-Year 2011 Levels /
Investment Sentiment Strengthens in Europe Despite Uncertainty;
According to Survey Conducted by Jones Lang LaSalle Hotels 46% of
Cities Tracked Expected to Show Trading Performance Growth in next Six
Months / June 2012
Hotel 2011 Market One of the Best Performing in Europe; Warsaw Hotels
Posting 8.3% Appreciation in Room Yield Over 2010 According to Jones
Lang LaSalle Hotels Poland Hotel Intelligence Report / May 2012
of Branded Hotels’ International Expansion to Reach New Focus and
Intensity in 2012 According to Jones Lang LaSalle Hotels; While Brazil,
Russia, India and China Remain a Key Focus, New Target Countries
Include Indonesia, Malaysia, Nigeria, Turkey and Vietnam / May 2012
Hotel Investment Market During Q1 2012 Shows Strong Activity in London
and Paris; Overall EMEA Investment Volume 39 % Lower than Q1 2011
According to Jones Lang LaSalle Hotels / April 2012
Asset Deals Accounted for 60% of Total Hotel Investment Volumes in 2011
Across EMEA According to Jones Lang LaSalle Hotels' Hotel Investment
Highlights Report / March 2012
York City Sets Record with $3.5 Billion in Hotel Transactions in 2011,
a 150% Increase Over 2010; Jones Lang LaSalle Hotels Predicts New York
Deal Volume Will Continue to Lead U.S. Cities in 2012 / January 2012
Hotel Transaction Volume Forecasted to Hold Steady in 2012 with
Worldwide Levels to Once Again Reach $30 billion According to Jones
Lang LaSalle Hotels Annual Hotel Investment Outlook 2012 Report /
Wynne-Smith to Become CEO for Jones Lang LaSalle Hotels While Arthur de
Haast Steps Up to Chairman / December 2011
Hotel Investors’ Appetite to Buy Rises to 18-month High, According to
Jones Lang LaSalle Hotels Survey; Top five cities for acquisitions
include Stockholm, Copenhagen, Chicago, Milan and San Francisco /
Buying Audience Emerges as REITs Pull Back on the Throttle for Hotel
Assets; Jones Lang LaSalle Hotels says sellers' window is still open as
growth in hotel room rates are expected to outpace inflation /
Lang LaSalle Hotels Study, Lodging Industry in Numbers – Brazil 2011,
Reveals Double-Digit Performance Growth for Brazilian Hotels for Second
Consecutive Year / August 2011
Lang LaSalle Hotels Forecasts Global Hotel Investment Volumes to Reach
$34.8 billion in 2011; The Americas Registered a 187% Year-on-Year
Upsurge with Transactions Totalling $7.4 billion / July 2011
Hotel Transaction Volume Reaches $4.9 Billion Through May, Triple the
Volume for Same Period Last Year Reports Jones Lang LaSalle Hotels;
Investors' 'buy' intentions are at six-year high / June 2011
Lang LaSalle Hotels Reports $24.3 billion in Global Hotel Sales During
2010 as Investors Get Back in the Game; Expects Deal Volume to Rise up
Another 15-25% Across the Globe in 2011 / January 2011
the Financial Challenges of 2009, Jones Lang LaSalle Hotels Forecasts a
30 to 40 Percent Increase in Global Hotel Deals; Worldwide Transaction
Levels Could Reach $28 to $30 billion in 2011 / November 2010
Lang LaSalle Hotels Arranges the Sale of the Laguna Cliffs Marriott
Resort & Spa / October 2007
|Jones Lang LaSalle Hotels Select Service Division Closes Radisson Fort Worth North Hotel / January 2007|