SAO PAULO, Brazil — Two fundamental drivers that rarely connect are set to change the hotel landscape in Brazil. The exposure from the FIFA 2014 World Cup and 2016 Olympic Games, coupled with hundreds of large scale investment projects across the country, are expected to result in outsized growth in hotel development opportunities throughout Brazil in the next decade. The sustained economic stability and decades of pent up demand are transforming Brazil into a more decentralized, services-oriented country, characterized by an increasingly affluent and mobile population. All of these factors equate to nearly 193,000 new hotel rooms that will be required to meet demand in the country before 2022, according to an industry-sponsored white paper prepared by Jones Lang LaSalle, entitled “Economic Transformation Drives Latin America’s Lodging Industry.”
“While the World Cup and Olympic Games have already affected hotel supply in certain cities,” said Clay Dickinson, Executive Vice President of Jones Lang LaSalle’s Hotels & Hospitality Group responsible for the Latin America region. “It is the steady improvements in the production of commodities like iron, oil, coffee and soybeans, together with the sheer scale and transformation into one of the world’s largest consumer economies that is elevating the country’s role in global commerce and spurring hotel demand. The industry has already witnessed impressive gains, and will be propelled further over the longer term by significant demand increases domestically driven retail, banking and professional services.”
Just as the world’s two most high profile sporting events promise to keep Brazil at the center of the world stage over the next several years, economic stability and decades of pent up demand are transforming Brazil into a more decentralized, services-oriented country. This transformation can be seen in the increasingly affluent and mobile population. Due to the more than 600 investment projects underway and planned throughout country, the largest growth in hotel room demand is in the emerging towns, secondary and tertiary cities where almost 80,000 rooms, or 42 percent of the total 192,700 rooms, are expected. The world’s largest iron mine will potentially bring some 30,000 new jobs to the small town of Paraupebas. The impact of this project alone is projected to require an increase of 300 percent to the current supply of hotel rooms in the area.
In addition to mining developments, Brazil has committed upwards of $679 billion in more than 250 power generation and transportation projects, including $75 billion in the development of oil production in the Campos Basin, located offshore between Santos and Rio de Janeiro.
“As a country of continental proportions, the future of Brazil’s lodging industry is inextricably linked to its overall economic growth, as well as domestic leisure and commercial demand,” said Ricardo Mader, Executive Vice President of Jones Lang LaSalle’s Hotels & Hospitality Group in Brazil. “As such, its outlook is contingent upon continued progression, expansion of the middle class and on-going improvementsin infrastructure.”
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. The full report can be found here: http://www.jll.com/latam-whitepaper
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 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 hospitality real estate advisor in the world totaling nearly $25 billion, while also completing approximately 4,000 advisory and valuation 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
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 $46.7 billion of real estate assets under management. For further information, visit www.jll.com.
Contact: Katie Sershon
Phone:312 228 3127