| |
|
|
 |
|
 |
| |
| |
|
|
|
| |
|
|
|
May 29, 2008 |
|
|
|
|
For media inquiries: Kathleen Hurley
|
|
|
|
|
|
Lodging Econometrics Reports
Construction Pipeline for the Caribbean,
Mexico & Central America Region At a High for the Cycle
311 Construction Projects with 65,332 Guestrooms
are in the Pipeline at the End of Q1 2008 |
|
| |
|
USA – Lodging Econometrics (LE), the Global Authority for Hotel
Real Estate, reports the Total Construction Pipeline for the Caribbean, Mexico &
Central America contains 311 projects and 65,332 guestrooms at Q1 2008.
“Development continues at a vigorous pace,” according to LE President Patrick
Ford. “The Pipeline here is accented with large, luxury and upper upscale
beachfront resort projects, frequently with a residential component, and
numerous world-class spas and boutique hotels. While there are some short-term
economic concerns emerging, right now the region is performing well and
experiencing good success.” All projects included in the LE Pipeline have
dedicated land parcels, are being actively pursued by developers and have been
verified by the brands.
|
| |
|
|
| |
Ford continued, “Starting in Q3
2007, project and room counts in the Total Pipeline began to plateau. Totals
for hotels Scheduled to Start Construction in the Next 12 Months, at 96
projects/19,041 rooms for Q1, and for those in Early Planning, at 57
projects/12,207 rooms, likely peaked in Q3 2007. Hotels Under Construction,
at 158 projects/34,084 rooms in Q1, may now be at their peak, as developers
had previously rushed to get their projects in the ground.”
“New Openings from the Pipeline are set to unfold at an increasing rate in
2008 and 2009. A flow of high-end beach resorts and internationally
acclaimed spas and boutique hotels with iconic designs and world-class
service, where the hotel itself is the intended destination, are opening
throughout the region.”
 LE’s Forecast for New Hotel Openings
In Q1, 16 hotels/2,189 rooms opened. LE’s latest Forecast for New Hotel
Openings calls for 79 projects with 13,912 rooms to open during the last
three quarters of 2008, while 107 projects/22,947 rooms are anticipated for
2009. With 158 projects/34,084 rooms, or 85% of the expected projects
already Under Construction, the Pipeline is unfolding at a quickening pace.
A Showcase Region for High-End Global Brands
Global companies have a large presence and are putting their more opulent
resort offerings in the spotlight here. InterContinental has 2 luxury
InterContinentals underway and 5 Crowne Plaza projects with 1,013 rooms
under development. Marriott International’s pipeline features 7 Ritz-Carltons
and 3 JW Marriott luxury hotels, with 4 Marriotts and 2 Renaissance Hotels.
Starwood Hotels & Resorts has 2 Luxury Collection properties and 5 St.
Regis, along with 5 Westins, 2 Le Meridiens and 1 Sheraton Hotel. Hilton
Hotels has 1 Conrad Hotel and 3 Hilton Hotels.
Although high-end brands from Marriott, InterContinental, Hilton and
Starwood have solid pipelines, the region is a favorite for other global
companies and their investor groups as well. Over a dozen global luxury
brands located outside of the Americas are in various stages of development
throughout the region, including Banyan Tree, Mandarin Oriental, Angsana
Resorts & Spas, Amanresorts, Jumeirah, Raffles, and Capella.
There is considerable development of mid-market and select-service branded
projects in the region, approximately 70% of which are in Mexico,
particularly in secondary and tertiary cities. InterContinental’s Holiday
Inn, with 16 projects, and Holiday Inn Express, with 39 projects, are the
leaders. Marriott’s Courtyard follows with 8 projects, while Hilton’s
Hampton Inns & Suites has 6 projects. Grupo Posadas has 10 projects/1,279
rooms in the Pipeline, 4 of which are the economy One Hotels brand.
Leading Countries and Markets
The Pipeline for Mexico leads with 136 projects having a total of 25,610
rooms, representing 44% of the project total for the region. Three of
Mexico’s principal beachfront areas, Los Cabos, Cancun, and Playa del
Carmen, make up a combined 15 projects/2,695, while Mexico City has 8
projects/1,209 rooms.
The Caribbean has 127 projects/30,173 rooms, with Puerto Rico, at 23
projects/4,887 rooms, the Dominican Republic, at 15 projects/6,081 rooms,
and Netherlands Antilles, with 13 projects/2,938 rooms, having the largest
pipelines. Among the key markets are San Juan, Puerto Rico, with 10
projects/2,181 rooms, Punta Cana, Dominican Republic, with 6 projects/3,817
rooms, and Willemstad, Netherlands Antilles, with 10 projects/2,183 rooms.
Cuba could soon emerge as a major development hub in the Caribbean, as the
Tourism Ministry’s recently announced a two-year plan to build 30 hotels
with a total of 10,000 new rooms through a series of joint ventures with
companies from Spain and China.
Of Central America’s 48 projects/9,009 rooms, 23 projects/4,565 rooms are in
Costa Rica and 18 projects/3,312 rooms are in development in Panama,
including 13 projects/2,113 rooms in Panama City.
|
| |
Full-Service Segments
Enjoy Prominence |
| |
 |
Of the 65,332 rooms in the total Pipeline,
12,401 rooms are in the Luxury segment and 9,311 rooms are in Upper Upscale.
Independents make up another 34%, with 93 projects/22,276 rooms. About 50%
of the Independent total is anticipated to become a Luxury or Upper Upscale
brand as many developers will likely choose a brand as their project
planning progresses. Select and limited service sectors, at 32%, make up the
remaining Pipeline.
Of the 153 Luxury, Upper Upscale and like-kind Independents in the Pipeline,
70 projects have a residential component. This includes 28 projects with
condo hotel units, 34 with private residences and 8 with both. It is
important to note that, in the last two quarters, there have been fewer New
Project Announcements into the Pipeline with a condo or residential
component. This may be a reflection of the slower US economy, greater
difficulty in obtaining financing, and perhaps the bad publicity of some
failed projects Stateside. |
| |
Developers Display Some Caution
The region’s economies have been growing through the decade, reaching
unusually high peaks through the end of 2007 and into early 2008. However,
as various media and institutional reports suggest, there is growing concern
that a slowdown could develop. Several dynamics fuel this sense of
apprehension: the slowdown in the global economy, particularly in the US;
the tightening availability of credit in North America and Europe;
escalating oil and energy costs, etc. However, despite this sense of
foreboding, no substantial changes have surfaced yet.
Hotel operating results have been strong. Tourism statistics for the region
for early 2008 indicate that inbound traffic increased year-over-year.
However, developers are fully aware that, should the US economic situation
linger and the region’s economy start to slow down, reduced guestroom demand
and softening room rates are likely. Again, nothing of significance has
occurred yet.
 Still, developers may already be buffering themselves from a possible
impact. New Projects Announcements into the Pipeline have been slowing for
three consecutive quarters, with just 35 new projects/6,567 rooms announced
during Q1 2008.
Construction Starts in the first quarter were at a four-quarter low at 28
projects/5,158 rooms, meaning projects are now slow to move forward in the
current Pipeline.
Postponements and Cancellations in Q1 2008 were high at 17 projects/3,513
rooms. Much of this is due to the termination of the Harrah’s Entertainment
and Baha Mar Resorts Ltd. joint venture to develop a new gaming destination
in Nassau, Bahamas, that included a 1,000-room Caesars Resort Hotel &
Casino. As a result of the termination, three Starwood projects related to
the development have also been put on hold, including a St. Regis, a W Hotel
and a Westin with a total of 1,024 rooms. Baha Mar Resorts is still
committed to the project and is said to be exploring other options.
Summary
It is true that there is a sense of unease, with concerns of a possible
slowdown in regional economies and the lodging industry. However, this has
not yet happened, as the region is enjoying good success.
With New Hotel Openings from the existing Pipeline set to escalate in 2008
and 2009, developers seem to be preparing for what could come, as seen in
the decrease of New Project Announcements into the Pipeline. The fall-off in
Construction Starts in Q1 demonstrates the slowing progression of projects
up the current Pipeline.
The overall mood is optimistic, but a bit cautious. It will be interesting
to see how the situation develops and what trends emerge.
|
Lodging Econometrics (LE) of Portsmouth, NH is the global authority for
hotel real estate. LE conducts Supply Side research for all markets,
developers, companies and brands— worldwide!
Answer any development or investment question you may have. Inquire
today about LE's extensive product line:
- Monitor the entry of new supply for any market or country with LE's
Development Pipeline Reports & Three-Year Forecast for New
Hotel Openings
- Keep a vigilant watch on valuation changes that influence
your decision-making with
LE's Sales Comps for all Recent Hotel Transactions
- Look to add to your hotel portfolio using LE's
comprehensive
Contact Names for Owners and Management of Open and Operating Hotels
(Census)
Reports may be purchased as a:
· One-time Order · Quarterly Subscription · Corporate Site License for
Your Intranet
To learn more about LE's products and services, please contact LE at +1
603-431-8740 ext. 25. Or visit online at www.lodgingeconometrics.com
Email:
hotels@lodgingeconometrics.com
|
|
|
|
|
|
|
|
|
 |
|
|
|
© 2008 Lodging Econometrics, The Global Authority For Hotel Real Estate, 500 Market St. Suite 13, Portsmouth, NH 03801,
USA, Phone: +1 603-431-8740, Ext 25
|
|
|
|
