HNN recaps the opening day of the Hotel Opportunities Latin America conference with takeaways, quotables and more highlights from the event.
MIAMI—While the outlooks for hotels across Latin America are generally positive, speakers at the Hotel Opportunities Latin America conference noted the level of both short-term and long-term optimism varies greatly by country.
Some countries, like Chile or Mexico, are viewed as relatively safe bets, despite short-term difficulties. Others, like Brazil and Argentina, seem to represent huge growth opportunities for some companies, but come with massive barriers to entry. Then there are those countries, like Nicaragua, that have investors scratching their heads.
During the opening general session, Raul Calvet, CEO of Calvet & Associates, said as recently as 50 days ago he would’ve told the audience that Nicaragua represented a solid investment opportunity and was a country with strong hotel fundamentals. But now he is left to hope that recent unrest in the country is a bump on the road to long-term stability.
“Suddenly, we’re in a very different situation that will hopefully go away in the next 15 days,” he said. “If so, I’m confident the markets will recuperate.”
Despite general optimism in Mexico, which boasts both strong corporate and leisure demand and increasing interest in secondary and tertiary markets, the country’s hospitality industry faces major obstacles, including the upcoming presidential election and the ongoing renegotiation of the North American Free Trade Agreement.
During the same session, John McCarthy, executive chairman and partner with Leisure Partners, said it’s important not to put too much weight on those factors or to be overly pessimistic on Mexico’s fortunes.
“The picture looks fairly dramatic, but the reality is quite different,” he said. “What we’re seeing, at least on our side of the economy, is mostly very good.”
He noted the country is seeing continued growth in inbound foreign travelers, and various markets like Los Cabos and Mexico City show continued strength.
One of the recurring topics of the day was AccorHotels’ recently announced deal to purchase Chilean hotel company Atton Hoteles, which is expected to close later in the year. Officials from both AccorHotels and Atton were at HOLA and shared their perspectives on the deal.
Patrick Mendes, CEO of South America for AccorHotels, said the deal is in line with the M&A strategy Accor employs around the world, which was recently illustrated in the company’s plans to purchase Swiss hotel chain Mövenpick.
AccorHotels isn’t looking to buy “big guys, but small local operators, small groups,” he said, noting Mövenpick has 80 properties and Atton has 11 (with three in the pipeline).
“We’re usually looking at groups between 20 and 200 properties,” he said.
Meanwhile, Francisco Levine, CEO of Atton, said he sees the deal as a catalyst for his company’s next stage of existence. The four distinct stages of Atton’s growth, he said, start with its founding as a pair of assets, followed by an injection of more institutional capital, the exit of the company’s founders, and now finally becoming part of a large global company.
“Then this is a new stage where these assets will now have access to stronger distribution platform with stronger costs,” he said.
Photo of the day
Quote of the day
“I was always asked about loyalty and challenged on why we didn’t have a program, but it didn’t make sense to invest in creating one if we’re competing with programs with 40, 50 or even 100 million cardholders. So we chose to be more competitive on rates, instead. Now we have access to a very strong program.”
—Francisco Levine, CEO of Atton Hoteles, on the advantages his company will see following an acquisition by AccorHotels.
Slide of the day
During the morning data session, Patricia Boo, area director of Central & South America for Hotel News Now’s parent company STR, noted that major markets across South America—with the exception of Santiago, Chile—have seen RevPAR growth lately.