In the midst of the Wall Street turmoil in the U.S., it seems we're not the only area of the world struggling with financing–which may not be news to anyone; after all, some people are calling this time period a global credit crisis. Now, however, more facts are coming forth about another area that was thriving at the end of 2007 and even into early '08 and now is taking a tumble: South America.
Lodging Econometrics released its South America: Mid-Year 2008 Report following the construction pipeline and a three-year forecast for hotels expected to open. After reaching its peak in the first quarter of 2008 with 371 projects/62,896 guestrooms in the pipeline, South America's pipeline has now decreased to 341 projects for a total of 56,316 rooms. Some other highlights of the report include:
-59 percent of the continent’s pipeline is in Brazil. Brazil counts for 203 projects with 36,786 guestrooms in the three construction stages.
-57 percent of all pipeline projects are currently labeled independent, but 70 percent likely will become branded before opening.
-Select-service hotels make up 33 percent of the total pipeline, the second-largest share.
-In the first half of 2008, 35 new hotels comprising 5,106 rooms opened. Because of the global lending crisis, Lodging Econometric’s forecasts for new openings were adjusted down slightly to 83 new hotels/11,309 rooms in 2008 and to 96 new hotels/14,065 rooms in 2009.
Readers can download the full report here for more information.
Is this good for the South American industry? Studying the southern hemisphere's hotel outlook is new for me, so I'm a bit unfamiliar—but could it be that there was so much boom previously that a slowdown was necessary? Or is it a sign of more troubling times to come?
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