According to a new report from STR Global, South America will continue to expand. After launching data on many new markets across the continent, their study paints a largely positive image of hotel performance across South America. property
Year-to-date August 2011, revenue per available room (RevPAR) increased by 26.8% to US$95, owing primarily to increases in average daily rate (ADR), which increased by 21% to US$143. Market reports for Lima, Caracas, Montevideo, and Quito were recently released by STR Global.
For the year-to-date August 2011 compared to the same timeframe the previous year, all of the markets covered recorded double-digit percent increases in RevPAR. Though Rio de Janeiro has the highest ADR (US$206.14), Sao Paulo has the highest ADR increase of 31.3 percent. Except for Caracas, all markets saw a rise in occupancy, with Rio leading the way at 74.6 percent. Also in markets with low rises in occupancy, such as Quito (2.1%), Buenos Aires (2.3%), and Caracas (5.1%), hoteliers were able to increase ADR and achieve respectable increases in RevPAR.
The hotel industry in South America is still booming. Demand rose by 11.2 percent in 2010 over the previous year, and it is up 6.7 percent for the first eight months of this year compared to the same period last year.
Since December 2009, the rise in demand has translated into monthly occupancy and rate rises, despite relatively low current supply increases of less than 2%. As evidenced by the development of new hotels, these positive performance patterns lead investors to see the area as one with great potential.
According to the STR Global Pipeline Study, which shows hotels in construction, planning, and final planning in the area, Brazil will be the key development priority with 11,612 rooms across the three pipeline phases as a result of hosting the 2014 FIFA World Cup and the 2016 Olympics. Colombia, with 2,312 rooms in the pipeline, and Argentina, with 1,777 rooms, are also undergoing major growth.
"The double-digit rise in year-on-year RevPAR in the main South American markets reflects a gradual change in general trading conditions since the 2009 recession," says STR Global managing director Elizabeth Randall. "With two big sporting events coming up in Brazil, the prospects for development are reflected in the pipeline there."
Hotels in the Caribbean are reaping the benefits of a strong revenue rebound.
The Caribbean hotel industry posted strong revenue-per-available-room rises year-to-date November 2012, according to a new study from STR.
The Caribbean saw an 11.1 percent rise in RevPAR to US$113.24 year over year, a 3.8 percent increase in average daily rate to US$170.50, and a 7.1 percent increase in occupancy to 66.4 percent. Room sales increased 9.1% to $8.4 billion in the first half of 2012.
In comparison to Mexico (+3.1%), Hawaii (+5.3%), Florida (+3.1%), and Central America (+3.1%), hotels in the Caribbean had the greatest rise in occupancy (-4.7 percent).
Demand in the area increased by 5.1 percent in November, while supply decreased by 1.9 percent.
According to STR's December 2012 pipeline survey, the region's total active pipeline includes 50 hotels with 9,495 spaces. In the year 2012, five hotels with a total of 354 rooms opened in the region.