Lodging Econometrics, the global authority in charge of the real estate business for the hotel market, gave a complete report on the current construction of hotel complexes in Mexico, Central America and the Caribbean for the first half of 2008. According to its latest report, construction projects for the region consist of 311 projects and 65,332 rooms with the participation of major hotel firms around the world. "Development continues at a vigorous pace," says the company's president Patrick Ford.
Lodging Econometrics, the global authority in charge of the real estate business for the hotel market, gave a complete report on the current construction of hotel complexes in Mexico, Central America and the Caribbean for the first half of 2008. According to its latest report, construction projects for the region consist of 311 projects and 65,332 rooms with the participation of major hotel firms around the world. "Development continues at a vigorous pace," says the company's president Patrick Ford.
The projects will be set by large, luxurious high-market resorts in front of the beach, often with a residential component, with international-quality spas and boutique hotels .
At the beginning of the second half of 2007, the project and room accounts of the total set began to stabilize. The total number of hotels planned to start construction within the next 12 months amounts to 96 projects with 19,041 rooms in the first quarter plus another 57 with 12,207 rooms mostly in the third quarter of 2008.
There are currently 158 projects with 34,084 rooms under construction in the first quarter of this year reaching a maximum, as developers have made efforts to quickly finish their construction.
In the first quarter of this year, they opened 16 hotels with 2,189 rooms. The most recent prediction of Lodging Econometrics for the Opening of New Hotels speaks of 79 projects with 13,912 rooms that will be inaugurated during the last three quarters of 2008, while 158 projects with 34,084 rooms are already planned for 2009. With the 158 projects of 34,084 already mentioned, which represent 85% of those currently planned under construction, the development of the hotel activity is developing at an accelerated pace.
High-level investments
Global companies have a huge presence in this region, so much so that right now they are building their most opulent resorts in the area. IHG has under development 2 luxurious Intercontinental and 5 Crowne Plaza with 1013 rooms. Marriot International will include 7 Ritz Carlton and 3 JW Marriott luxury hotels, with 4 Marriotts and 2 Renaissance hotels. Starwood Hotels & Resorts has 2 Luxury Collection and 5 St Regis property, plus 5 Westin, 2 Le Meridien and a Sheraton. Hilton International will have a Conrad Hotel and 3 Hilton.
The region is also desired by large investment groups. Almost a dozen luxury franchises located outside the American continent develop different projects in the region, such as Banyan Tree, Mandarin Continental, Angsana Resorts & Spas, Amanresorts, Jumeirah, Raffles and Capella.
There is also considerable development of mid-market franchises in the region, in which approximately 70% are developed in Mexico, particularly in second- and third-tier cities. At the moment the Holiday Inn with 16 projects and the Holiday Inn Express, with 39 projects, are in the region. Both are the leaders of their market in the area. The Marriot Courtyard follows with 8 projects, while the Hilton Hampton Inns & Suites has 6 projects. Group
Posadas has 10 projects with 1,279 rooms, 4 of them economy class.
Leading countries and markets
Mexico is the country where more investment projects are developed with 136 projects and a total of 25,610 rooms, which represents 44% of the total project in the entire region. Three of the Mexican coastal regions, Los Cabos, Cancun and Playa del Carmen, bring together a total of 15 projects with 2,695 rooms, while Mexico City has 8 projects with 1,209 rooms.
The Caribbean has 127 projects with 30,173 rooms, including Puerto Rico, with 23 projects of 4,887 rooms, Dominican Republic with 15 projects and 6,081 rooms, the Netherlands Antilles, with 13 projects and 2,938 rooms. In addition to these countries is San Juan de Puerto Rico, with 10 projects of 2,181 rooms, Punta Cana, in the Dominican Republic, with 6 projects and 3,817 rooms and Willemstad, in the Netherlands Antilles, with 10 projects and 2,183 rooms.
Cuba could soon have a huge participation in the global project, after the Minister of Tourism of that country announced a plan to build 30 hotels in 2 years with a total of 10,000 new rooms through alliances with companies from Spain and China.
Of the 48 projects of 9,009 rooms in Central America, in Costa Rica 23 projects of 4,565 rooms are executed and 18 projects of 3,312 rooms are carried out in Panama, including 13 projects of 2,113 rooms in Panama City.
Full-service segments are of importance
Of the total of the 65,332 rooms in the project, 12,401 are in the luxury segment and 9,311 are in the high segment. Those of independent range form a 34% with 93 projects of 22,276 rooms. The limited and select service sectors, with 32%, form the remaining percentage of the project.
Of the 153 projects belonging to the luxury range, high and independent, 70 have a residential component. This includes 28 condominium hotel projects, 34 with private residences and 8 with both.
Moderate optimism
The economy in the region has grown over the past decade, showing high growth rates at the end of 2007 and early 2008. However, newspaper and institutional reports suggest concerns about possible economic decline.
This is due to the global stagnation of the economy, particularly in the United States, the unstable credit situation in the United States and Europe, increases in energy and oil, among other crises. Despite this situation, there have not yet been substantial changes in the area.
However, there have been recent cases that could alarm investors. This is the case of the cancellation and postponement of more than 17 projects with 3,513 rooms in the first quarter of 2008. Many of them as a result of the cancellation of the agreement between Harrah's Entertainment and Baha Resorts Ltd. to build the Ceasars Resort Hotel & Casino in the Bahamas.
