Latin America escaped the effects of the world recession almost unscathed (with
an average 5% growth between 2005 and 2009). During 2010 its hospitality industry
started to bounce back in every key destination except Brazil which experienced
consistent expansion during 2009.
Although accurate figures are hard to come by in this region, 2010 occupancy increased
by a healthy 10% over 2009, whilst corporate housing rates showed moderate increases
over 2009 nightly rates.
In a relatively under-developed and immature serviced apartments sector, extended
stay products and private landlord rentals dominate. Corporate housing in the region
is mainly configured by the recognised hotel brands, a small number of apart-hotels
and by private landlords letting their property through relocation agents who provide
a one-stop-shop for expats and corporate accounts.
Business travellers who visit the region are wary about security issues and consequently
when booking accommodation tend to sacrifice marginal savings (hotel rates are moderately
reasonable compared to serviced apartments) for the security of staying in a major
hotel. Kidnapping is still not uncommon in countries like Colombia, Mexico, Brazil
The region is fertile ground for indigenous corporate groups such as Ecopetrol (Colombia),
Petrobras, Embraer, Vale and EBX (Brazil), Pemex (Mexico) Enersur (Peru) and PDVSA
(Venezuela). Many have announced investments in the region’s economy during 2011
of $224 billion.
Investment on this scale will generate a steady demand for specialised qualified
project workers and therefore for the relocation market. Corporate travel is booming
too, with volumes similar to Asia Pacific and well ahead of those in the domestic
US market. Inbound and outbound activity is increasing rapidly as a result of more
direct flights from key European cities.
Currently Brazil, Mexico and Argentina generate approximately two thirds of all
corporate travel in the region, all with strong travel markets and world-class multinationals.
The demand is there, but the main challenge is an underdeveloped infrastructure
compared to Europe or the US.
2011 GDP growth rates are expected to be similar to those of 2010, when Peru and
Chile both grew 6%, Brazil by 4.5%, Argentina by 4.4% and Colombia by 4%. However
the MasterCard Index of Global Destination Cities study has forecasted that Caracas
- along with Quito and Santo Domingo - will suffer a contraction in both number
of arrivals and visitors expenditure in 2011.
The concept of serviced apartments is well established in Argentina thanks to a
very strong and proactive tourism industry that has positioned itself as a relatively
safe, economic and pleasant destination for expats.
There are many relocation agencies offering serviced apartments in Buenos Aires
and the standards are competitive in relation to the diminishing hotel equivalent
in the area. The third biggest economy in Latin America is currently experiencing
a boom in tourism and import activities fuelled by the strong Brazilian economy
despite inflation running at 25% (though officially 10%).
Repeatedly cited as the most important emerging market, the major airline players
are regularly announcing new and more frequent flights to Brazil’s main destinations.
Brazil’s job market is booming, with the Labour Ministry reporting that 280,799
jobs were created in February 2011 alone. The new posts have included foreign workers
too, with companies hiring 30% more in 2010 than in 2009.
Sao Paulo is the focus of the serviced apartments sector, with the Brazilian government
due to invest over $1 trillion in infrastructure to support the staging of the 2014
FIFA World Cup and the 2016 Summer Olympics. According to Ernst & Young, half of
investors in Brazil have focused on hotel developments due to domestic and international
demand for rooms across varied lodging segments.
Accor is spending US$200m to add nearly 5,000 rooms in Rio de Janeiro as part of
an expansion plan that will see 300 hotels in full operation by 2015. throughout
Latin America with particular focus on their Ibis and Formula 1 brands.
Although Brazil is ranked #79 in the in the Travel & Tourism Competitiveness Index
for business environment and infrastructure, there is no formalised corporate housing
sector, with serviced apartments rented direct from private landlords or through
an agency. The demand for accommodation is increasing, resulting in very little
availability which suggests a bright future for the serviced apartments sector in