"It really boils down to how expensive beachfront land is getting," Patrick Ford, president of Portsmouth, NH-based Lodging Econometrics, tells GlobeSt.com. As a result, he says, developers of luxury and upscale hotels seek to dominate their locations with hundreds of rooms for overnight guests, along with residential units.
Ford notes in his latest report that the pipeline for hotels in Lodging Econometrics' "Carmexica" region has peaked since the third quarter of 2007, with 158 projects totaling 34,084 rooms under construction through the first quarter. Likely culprits are a more difficult environment for securing financing and the current slowdown in the US economy, he says.
"If you're already in the pipeline, you're moving like crazy" to complete projects, Ford says. He adds that new hotel and resort openings are set to unfold at an increasing rate through next year.
New hotel openings throughout the region are forecast at 79 projects with 13,912 rooms opening through the last three quarters of 2008, while 107 projects with 22,947 rooms are anticipated through 2009, Lodging Econometrics states. The report adds that 85% of expected projects are already under construction.
The Caribbean has 127 projects totaling 30,173 rooms in the first-quarter pipeline, mostly in Puerto Rico, the Dominican Republic and the Netherlands Antilles, according to Lodging Econometrics. Mexico has 136 projects totaling 25,610 rooms, largely in principal beachfront areas of Los Cabos, Cancun and Playa del Carmen. Central America has 48 projects totaling 9,009 rooms, mostly in Costa Rica and Panama.
Global companies are putting more opulent offerings in the part of the world that Lodging Econometrics refers to as "Carmexica," with InterContinental Hotels Group PLC building two luxury hotels and five Crowne Plaza projects. Marriott International Inc. has seven Ritz-Carlton and three JW Marriott Luxury hotels under way, plus four Marriott and two Renaissance hotels in its upper-upscale segment. Starwood Hotels & Resorts Worldwide Inc. plans two Luxury Collection properties plus five St. Regis, five Westin, two Le Meridien and one Sheraton hotels in the region.
The report notes that Cuba could soon emerge as a major development hub within the region, given that country's recently announced two-year plan to build 30 hotels totaling 10,000 new rooms. Ford says European hoteliers and Chinese investors are expressing interest in building rooms in Cuba, while US developers are blocked by the ongoing trade embargo against the Castro regime.
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