Latin American Countries Reach Inflection Point: Outsized Growth in Lodging on the Horizon

Latin American Countries Reach Inflection Point: Outsized Growth in Lodging on
                                 the Horizon

Region anticipating 65 percent increase in lodging supply throughout next 10
years

PR Newswire

SAO PAULO, Sept. 24, 2013

SAO PAULO, Sept. 24, 2013 /PRNewswire/ --Big changes are on the horizon for
the Latin America lodging industry as more than 425,000 new rooms are expected
to be required throughout the region over the next 10 years. According to an
industry-sponsored white paper prepared by Jones Lang LaSalle, "Economic
Transformation Drives Latin America's Lodging Industry," a surge of hotel
opportunity is predicted for the coming decade in Brazil, Mexico, Colombia and
Peru. The research found that the four countries face a crucial inflection
point, and are poised to undergo rapid, largely domestically driven economic
growth reminiscent of the United States and other mature economies in decades
past.

Check out a video summary of the white paper:
http://www.youtube.com/watch?v=f8BHU2R1RNU 

Jones Lang LaSalle forecasts the gross room supply growth for these four
countries at 425,900 rooms, representing a compound annual growth rate of 5.2
percent and an absolute percentage increase of more than 65 percent over a
10-year period.

The research includes data from a wide variety of sources on 1,100 projects
located across 900 cities and towns in Brazil, Mexico, Peru and Colombia.
Combined, these countries account for nearly 70 percent of the total
population in Latin America (excluding the Caribbean) and approximately 75
percent of the region's GDP.

"Every calculation points to a disproportionate increase in the amount of
hotel and timeshare development required to satisfy projected demand within
those target countries," said Clay Dickinson, Executive Vice President of
Jones Lang LaSalle's Hotels & Hospitality Group responsible for the Latin
America region. "These countries are still at the initial stage of their
transformation toward services-oriented economies."

Included in the findings are the two primary driving forces behind the
regional economic growth, and the pronounced increases in required hotel
supply. The first is this transformation to a high proportion of
service-oriented industries, economic activities which have been demonstrated
to be strong generators of hotel demand. In the aggregate, nearly 60 percent
of the productive activities of Brazil, Mexico, Peru and Colombia are
services-oriented. 

The second driver that not only underscores the macro-level economic
transformation underway, but supports outsized growth in required hotel
development is the sheer volume of public and private sector investment in
thousands of infrastructure, industrial, mining, manufacturing and
services-oriented projects across these countries. For example:

  othe world's largest iron mine is expected to create some 30,000 new jobs
    in Parauapebas, Brazil;
  othe $4 billion Bicentenario pipeline will connect Yopal, Colombia and its
    newly discovered oil fields to the Caribbean at Puerto Convenas by 2015;
  oMexico's new Durango-Mazatlan superhighway will dramatically improve
    travel time from eight hours to just three; and,
  oPeru's $50 billion backlog of announced gold, copper and other mining
    activity will stimulate road and maritime infrastructure projects,
    including a $600 million investment in the Almirante Miguel Grau Port
    facility.

"We are at the onset of a period of explosive, sustainable growth in the
region, and now is the time to seize the opportunity for those investors who
are looking to develop a long-term, high-margin and scalable business in the
hotel industry in Mexico, Brazil, Colombia and Peru," said Daniel del Olmo,
Wyndham Hotel Group's Senior Vice President & Managing Director in Latin
America. "As the world's largest hotel company, our portfolio of renowned
brands provides investors with great options, particularly in the economy and
mid-scale segments which will drive the greatest growth in the years to come
in Latin America. With 120 hotels open and operating in the region and over
10,000 rooms in our pipeline representing one in every four rooms under
development in South America, we believe we are well positioned to take
advantage of the region's future growth."

The combined effect of these two drivers was analyzed and used to forecast
changes in the Hotel Supply Ratio (HSR) – the number of hotel rooms per 1,000
inhabitants – at the country and market level. The aggregate HSR for these
same countries is expected to increase by more than 52 percent (from 1.6 to
2.5); which equates to a 65 percent increase over current supply.

"By its very nature, increases in hotel supply tend to be cyclical, leading to
periods of oversupply. Nonetheless, our bullish outlook on hotel development
in the region for the long term is based upon the countries' fundamental
economic transformation, significant capital investments already committed in
infrastructure and increasing productive capacity and rapid increases in
accumulated domestic savings. We believe these factors, along with the
emergence of a solid middle class, create a virtuous circle of increasing
affluence which will spur further spending on commercial and leisure travel,
boosting hotel demand and benefiting investors in the region," said Dickinson.

The white paper, "Economic Transformation Drives Latin America's Lodging
Industry," was prepared by Jones Lang LaSalle and supported by industry
partners, including Wyndham Hotel Group, DLA Piper, VOA Associates and RCI,
Inc.

Jones Lang LaSalle's Hotels & Hospitality Group serves as the hospitality
industry's global leader in real estate services for luxury, upscale, select
service and budget hotels; timeshare and fractional ownership properties;
convention centers; mixed-use developments and other hospitality properties.
The firm's more than 265 dedicated hotel and hospitality experts partner with
investors and owner/operators around the globe to support and shape investment
strategies that deliver maximum value throughout the entire lifecycle of an
asset. In the last five years, the team completed more transactions than any
other hotels and hospitality real estate advisor in the world totaling nearly
US$25 billion, while also completing approximately 4,000 advisory, valuation
and asset management assignments. The group's hotels and hospitality
specialists provide independent and expert advice to clients, backed by
industry-leading research.

For more news, videos and research from Jones Lang LaSalle's Hotels &
Hospitality Group, please visit: www.jll.com/hospitality or download the
Hotels & Hospitality Group's app from the App Store.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment
management firm offering specialized real estate services to clients seeking
increased value by owning, occupying and investing in real estate. With annual
revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more
than 1,000 locations worldwide. On behalf of its clients, the firm provides
management and real estate outsourcing services to a property portfolio of 2.6
billion square feet and completed $63 billion in sales, acquisitions and
finance transactions in 2012. Its investment management business, LaSalle
Investment Management, has $47.7 billion of real estate assets under
management. For further information, visit www.jll.com.

About Wyndham Hotel Group
Wyndham Hotel Group, part of the Wyndham Worldwide (NYSE:WYN) family of
companies, is the world's largest hotel company with approximately 7,410
hotels and over 635,100 rooms in 67 countries under 15 hotel brands: Wyndham
Hotels and Resorts®, Ramada®, Days Inn®, Super 8®, Wingate by Wyndham®,
Baymont Inn & Suites®, Microtel Inn & Suites® by Wyndham, Hawthorn Suites by
Wyndham®, TRYP by Wyndham®, Howard Johnson®, Travelodge® and Knights Inn®. In
addition, the company has licence agreements to franchise the Planet Hollywood
Hotels, Dream® and Night® brands and provide management services globally.

All hotels are independently owned and operated excluding certain Wyndham,
Hawthorn Suites by Wyndham and TRYP by Wyndham hotels, as well as certain
Ramada, Days Inn and Super 8 hotels outside of the U.S.A., which may be
managed by one of the affiliates of Wyndham Hotel Group.

Wyndham Hotel Group is based in Parsippany, New Jersey, U.S.A. Additional
information is available at www.wyndhamworldwide.com. For more information
about hotel franchising opportunities visit www.whgdevelopment.com or
desarrollo.grupowyndham.com.

SOURCE Jones Lang LaSalle

Website: http://www.joneslanglasalle.com
Contact: Katie Sershon, +1 312 228 3127, Katie.Sershon@am.jll.com; or Jessica
Martin, +1 312 228 2983, Jessica.Martin@am.jll.com
 
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