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. To request a copy of the report, visit www.joneslanglasallehotels.com
or www.jllhss.com. 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.
|
Contact: Katie Sershon +1-312-228-3127 [email protected] or Heather Filkins +1-312-228-2139 [email protected] |