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The Brazilian Hotel Sector - April 2015

“Soaring property prices have made it virtually impossible to develop new hotels in the primary markets due to extremely elevated land values … most of the main hotel developers in Brazil are real-estate developers who can earn higher margins in the residential market … nevertheless, there are windows of opportunity for hotel development in Brazil, especially as concerns budget and economy hotels in secondary or tertiary cities with populations of between 80,000 and 1,000,000, where the average GDP growth, in 2012 and 2013, has exceeded 10%.”

- Jessica Kelly, Senior Tourism Analyst

This report looks at the following areas:

What will be the medium-term impact of the 2014 World Cup and the 2016 Summer Olympics on Brazil’s hotel sector?
How is hotel development financed in Brazil?
What are the leading domestic and international hotel chains in Brazil?
Where are the best hotel development opportunities in Brazil?


INTRODUCTION
KEY FINDINGS
DATA SOURCES
OVERVIEW
OUTLOOK FOR TOURISM ARRIVALS
Figure 1: Tourist arrivals* in Brazil, 2009-18
INCOMING ARRIVALS
Figure 2: Incoming arrivals by region and country, 2012-13
OUTLOOK FOR SPENDING ON TRAVEL AND TOURISM IN BRAZIL
Figure 3: Forecasted growth in spending on travel and tourism in Brazil, 2013-20
HOTEL AND LODGING CAPACITY
Figure 4: Tourist accommodation establishments* in Brazil, 2009-18
HOTEL CAPACITY
Figure 5: Hotel capacity in Brazil by region and state, 2012-13
Figure 6: Change in hotel capacity in Brazil by region and state, 2012-13
HOTEL PERFORMANCE
BRAZIL
Figure 7: Hotel* performance in Brazil, in US Dollars, 2013-14
Figure 8: Hotel* performance in Brazil, in Brazilian Reals, 2013-14
RIO DE JANEIRO
Figure 9: Hotel performance in Rio de Janeiro, in US Dollars, 2013-14
Figure 10: Hotel performance in Rio de Janeiro, in Brazilian Reals, 2013-14
SÃO PAULO
Figure 11: Hotel performance in São Paulo, in US Dollars, 2013-14
Figure 12: Hotel performance in São Paulo, in Brazilian Reals, 2013-14
RIO DE JANEIRO VERSUS SÃO PAULO
HOTEL CHAINS IN BRAZIL
Figure 13: Hotel companies in Brazil, 2014
Figure 14: Hotel brands ranked by number of properties in Brazil, 2011-14
HOTELARIA ACCOR DO BRASIL S.A
Figure 15: Federal states and cities where Accor hotels are located, 2015
Accor purchased Grupo Posadas portfolio
Brands
Ibis Styles début
ibis pipeline
Figure 16: Planned openings of ibis hotels in Brazil during the first half of 2015
Three new hotels in Recife
CHOICE HOTELS INTERNATIONAL, INC.
Figure 17: Choice's brand portfolio in Brazil, end 2013
Quality Hotel Petrolina
Atlantica hotels
Atlantica acquired
Strong pipeline
HOTEL NACIONAL INN CAMPINAS LTD
Figure 18: Hotel Nacional Inn's portfolio by location, 2015
LOUVRE HOTELS GROUP/BRAZIL HOSPITALITY GROUP (BHG)
Brazil Hospitality Group (BHG)
BHG’s hotel portfolio
Figure 19: Distribution of BHG’s hotel portfolio by region, 2013
Figure 20: Brazil Hospitality Group's hotel portfolio, 2014
Chain expansion and development
Over 14,000 rooms by end 2016
Hotel school launched
Brands
Figure 21: BHG’s hotel portfolio by segment, 2013
BHG’s client profile
Figure 22: BHG’s guest profile, 2013
Distribution channels
Figure 23: Breakdown of BHG’s distribution channels, in %, 2013
Stronger results in 2013
BLUE TREE HOTELS & RESORTS DO BRASIL S/A
Figure 24: Blue Tree’s hotel portfolio by region, city and state, 2015
TRANSAMÉRICA HOSPITALITY GROUP
Figure 25: Transamérica Hospitality Group’s hotel portfolio, 2015
BEST WESTERN INTERNATIONAL
Figure 26: Best Western’s hotel portfolio in Brazil, 2015
WYNDHAM HOTELS & RESORTS
Figure 27: Wyndham's hotel portfolio in Brazil, 2015
INTERCONTINENTAL HOTELS GROUP PLC
Figure 28: IHG's hotel portfolio in Brazil, 2015
GRUPO POSADAS
CARLSON REZIDOR HOTEL GROUP
Figure 29: Carlson's Brazilian hotel portfolio, 2015
Carlson takes back Radisson brand development for Latin America
STARWOOD HOTELS & RESORTS WORLDWIDE, INC
Figure 30: Starwood Hotels & Resorts’ portfolio in Brazil, 2015
MARRIOTT HOTELS & RESORTS
São Paulo Airport Marriott to expand
CURRENT DEVELOPMENTS IN THE BRAZILIAN HOTEL INDUSTRY
THE EXPANSION OF HYATT
Grand Hyatt Rio de Janeiro
Brazil’s first Park Hyatt
Hyatt’s joint venture for Hyatt Place hotels in Brazil
Three new hotels in the pipeline
Hyatt Place Sorocaba
Hyatt Place Macaé
RED ROOF INNS TO ENTER BRAZIL
Nobile Hoteis
Brands
Pipeline
Figure 31: Nobile’s active pipeline of hotel projects, 2015
BSH INTERNATIONAL
HOTEL DEVELOPMENT OPPORTUNITIES
Figure 32: Secondary or tertiary cities with populations of between 80,000 and 1,000,000, 2014
Figure 33: Geographical dispersion of secondary and tertiary cities identified by Horwath, 2014
Figure 34: Hotel supply situation in secondary and tertiary Brazilian cities, 2014
HOTEL FINANCING IN BRAZIL
A SEVERE LACK OF DEBT FINANCING
THE CONDO STRUCTURE
Conflict of interest in the condo-hotel model
URBAN LUXURY HOTELS
Figure 35: Defining characteristics for luxury hotels in Brazil, 2014
Figure 36: Urban luxury hotel pipeline in Brazil, 2014
WHAT NEXT?
2016 OLYMPICS UNLIKELY TO LIVE UP TO EXPECTATIONS
ECONOMY SLOWING DOWN
Figure 37: Brazil's GDP growth rate in local currency terms, 2013-16
Figure 38: Brazil’s GDP, 2011-19
Currency weakening – A silver lining?
Figure 39: Forecasted exchange rate BRL/USD, 2011-19
Figure 40: Forecasted exchange rate BRL/USD, 25/02/2015
HURDLES TO BE OVERCOME
High prices
Pipeline
INDEX TO TRAVEL & TOURISM ANALYST
Index grouped by geographic area
INDEX TO TTI DESTINATION REPORTS
Country reports
SPECIAL REPORTS INDEX
2003
2004
2005
2006
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