If you're planning a trip to Brazil to stroll the white sandy beaches, conduct business meetings or attend next year's World Cup matches, chances are you'll be able to stay in a new hotel.
And you won't have to spend a fortune.
Brazil's in the midst of a hotel building boom that promises to deliver thousands of newly built, moderately priced hotel rooms.
In fact, 200 hotels are under construction, while another 170 hotels are slated to open within the next three years, according to industry tracker Lodging Econometrics.
Many will open in time for next year's World Cup games and/or the 2016 Summer Olympics, two of three key factors behind the construction explosion.
"These events are going to shed the global spotlight on the country," says Ricardo Suarez, Starwood's executive in charge of Brazil development.
The other key factor is Brazil's emerging middle class, which is prompting a rush of eager but budget-conscious people to explore the country, he says.
Most newly built hotels will belong to a chain
Though some of the newly built hotels will be high-end properties with names such as Hilton and Grand Hyatt, the vast majority will be brands known for value, according to Lodging Econometrics' Bruce Ford. Expect most of them to be from brands such asNovotel, Ibis, Holiday Inn Express, Super 8 and Tryp by Wyndham, all either mid-priced or economy lodgings.
French hospitality giant Accor leads the pack with 55 hotels under construction, primarily under the mid-priced Novotel and budget-priced Ibis names, Ford says. IHG, which has six Holiday Inn Express locations and one Holiday Inn in the pipeline, comes in at No. 2, followed by Hilton.
One example: A dual-branded Novotel and Ibis hotel complex a mile away from the Olympic Stadium in Rio de Janeiro. It's being developed by Host Hotels, one of the biggest owners of upscale hotels in the USA. Host executive vice president Minaz Abji says the company is developing seven hotels with Accor because it's most familiar with consumers who will fill most of the new hotel rooms.
"The local Brazilians know it," Abji says, referring to the two Accor brands. "Accor is a very big player there."
But while Accor has a head start over the U.S.-based multinationals, he says that Marriott, Hilton and the others will grow in Brazil.
Marriott International currently has five hotels – Courtyard or Fairfield Inn locations – under construction, says Marriott executive Craig Smith. They're in negotiations to ink deals for more upscale hotels including Marriott, Renaissance and "even a luxury brand," he says.
The construction boom will influence the way Brazilians, Latins and other visitors travel, especially when they're traveling for work.
In Belo Horizonte, Brazil's fifth-largest city, for instance, Lodging Econometrics' Ford says there are 20 hotel projects underway that will add 4,100 rooms. Right now, many business travelers rely on boarding houses to spend the night, he says.
The boom could also change the way Brazilians in hotel-boom cities socialize.
"When you look at Western brands coming to the market, you're going to get more full service out of a select-service brand," Ford says. "You go to a Courtyard in Brazil will have a three-meal-a-day restaurant."
The hotels going up now in Brazil tend to be high quality, similar to what the U.S. chains have built in China and Dubai, he says.
New hotels could help consumers save money
No matter where travelers are from, the boom will mean that they should be able to save a few bucks.
Wyndham, for instance, is working on opening 25 newly built Super 8 budget hotels over the next three years that will be priced below the current competition – mom-and-pop hotels, says senior Wyndham executive Daniel Del Olmo, who oversees the company's Latin American growth.
The Super 8 locations will have rates that range between about $80 and $120 a night, bargain prices, he says, compared to the $100 to $130 rates that travelers currently pay for a bed in less-reliable independent hotels.
"They'll be all new construction, 100% consistent in locations where there's virtually no new competition to speak of," Del Olmo says. "They will be the best value in town."
That should be good news to business travelers at a time when expenses are soaring.
Skyrocketing demand for lodging from business travelers in Brazil is pushing up costs, according to the Global Business Travel Association. Total spending on Brazilian business travel is expected to hit $35 billion this year, a 14% jump from last year, a GBTA analysis shows.
Travel is important to Brazil, with travel and tourism accounting for 9% of the country's GDP, even more than the chemicals manufacturing industry (7%), according to a World Travel & Tourism Council report on Brazil released today.
Most of the travel within the country is done by Brazilians, representing some 50 million trips per year, the report says.
Brazil, however, should be attracting more international tourists given its size and its wealth of rain forests, World Heritage sites, beaches, history and culture, WTTC CEO David Scowsill says. Brazil receives 5.2 million trips from international tourists per year, a fraction of Mexico's 50 million trips, the report says.
"The World Cup in 2014 and Olympics in 2016 will be four week bursts of intensity in terms of overseas visitors," Scowsill says, "but cannot be relied upon to be the sole drivers of international visitor growth in the future."
Source: USA Today (includes photo gallery)
