Jones Lang LaSalle Hotels" Brazilian Hotel Market Heats Up with ADR Growth of 10.4 Percent Despite Weak Global Market
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Jones Lang LaSalle Hotels" Brazilian Hotel Market Heats Up with ADR Growth of 10.4 Percent Despite Weak Global Market
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Category: Central and South America - Brazil - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2010-08-13
Jones Lang LaSalle Hotels anticipates further leaps in operating performance over next three years
SÃO PAULO, AUGUST 12, 2010 – Jones Lang LaSalle Hotels today released its annual bi-lingual research study, Lodging Industry in Numbers – Brazil 2010, which reveals that Brazil’s quick rebound in economic fundamentals in the second half of 2009 resulted in average daily rate (ADR) growth of 10.4 percent for the year, one of the highest growth rates posted by any large country worldwide last year. The firm’s report provides a detailed performance analysis of more than 340 hotels, condo hotels and resorts in Brazil, in what is the largest surveyed sample of hotels since the report’s inception.
While occupancy rates softened by 1.4 percentage points in 2009 for the properties in the survey sample, the decline was far outweighed by the 10.4 percent growth in ADR. “This resulted in revenue per available room (RevPAR) growth to BRL 112—the highest RevPAR in Brazil’s history,”said Ricardo Mader, executive vice president for Jones Lang LaSalle Hotels in São Paulo.
Overall, the gross operational profit (GOP) of the properties in the firm’s survey sample declined by 1.1 percentage points in 2009 as companies reduced the number of meetings, events and banquets. But Brazil’s recession was short-lived, and the economy is again on a fast pace of growth. “Across the 15 hotels we asset manage across Brazil, we have already been observing double-digit RevPAR growth thus far in 2010,” said Mader.
Approximately 93 percent of hotels in Brazil are unaffiliated with an international or domestic brand – representing three-quarters of the country’s current room inventory, However, the proportion of branded hotels is on the rise as the market continues to be evaluated by foreign investors.
According to the firm’s proprietary database, there are currently 153 hotel projects in construction or in an advanced stage of planning that will be affiliated with the main hotel chains present in Brazil. “These development projects encompass 24,147 rooms and are concentrated in the economy and mid-scale segments,” said Manuela Gorni, senior vice president for Jones Lang LaSalle Hotels in São Paulo.
The impending room supply represents only a 5.5 percent increase of total existing rooms in the country spread over several years. The current growth in occupancy and average daily rates, driven by the improvement in the country’s economy, coupled with the relatively tepid increase in the country’s hotel supply, are setting the stage for significant further growth in Brazilian hotels’ performance over the next three years.
“We expect a new hotel development and investment cycle to gain traction in Brazil, as the country prepares for the FIFA Soccer World Cup to be hosted in 12 cities across the country in 2014 and the Summer Olympic Games in Rio de Janeiro in 2016,” said Gorni.
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