At this year’s South American Hotel Investment Conference (SAHIC), JLL Managing Director Ricardo Mader was recognized for his contributions to the region’s hospitality industry. With 30 years of experience in the local lodging market, Mader has witnessed its evolution firsthand.
“Ten years ago, the lodging market in South America was a completely different landscape than it is now,” Mader explained. “Hotel investing used to be a family business, and the most active players didn’t have much experience in the industry. Now, more professional and experienced investors, operators and developers are emerging, which enables us to operate more efficiently.”
Though the market has come a long way in the past 10 years, local hoteliers are still navigating substantial challenges. Mader points to a lack of available debt and more single asset properties as opposed to larger portfolios as two issues facing investors.
“South America’s lodging market is incredibly complex,” said Mader. “A combination of unfavorable macroeconomic fundamentals and political events caused stagnant growth in 2015, and emerging markets have remained challenged throughout 2016.”
According to Mader, there are valuable opportunities for investors and developers to leverage in the near future.
“Global hotel brands can expand into the area by acquiring local domestic chains. These chains, which can include 15, 20, even 30 assets, will enable larger companies to establish a presence in the area without having to build new properties,” he explained. “Also, as the less-experienced players look to exit the market, that gives professional investors a chance to acquire new assets at a realistic price.”
Looking into 2017, Mader is optimistic about the short and long term future of South American hotels.
“We’ll continue to see more professional players enter the market, which will help the industry continue its evolution. I expect to see more deals close in 2017, with more unique buyers driving those transactions,” said Mader. “Global lodging trends are impacting the market faster, and with more support from marketing professionals, lawyers and brokers, we can accommodate those trends to meet changing guest preferences.”
For more notable localized trends and market statistics, download JLL’s Hotel Destinations South America report.