Argentina’s hotel building boom: “symbol of climb back from global downturn”
Argentina’s hotel building boom can be held up as a symbol of South America’s climb back from the global downturn. The country has 15 projects in the development pipeline representing 1,700 rooms, according to STR Global. Of those 1,700 rooms, 68.9% or 1,172 are currently in the in-construction phase of development.
Argentina’s pipeline is bested in South America only by tourism mecca Brazil, which shows 51 projects comprising 7,042 rooms.
“The market in South America is going very well,” said Arturo Garcia Rosa, president of HVS Argentina.
The city of Buenos Aires has been performing at a particularly high level for hotels. The market’s occupancy skyrocketed 87.3% to 62.5% in July in year-over-year comparisons, according to STR Global. Meantime, average daily rate increased 15.8% to US$134.48 and revenue per available room zoomed 116.9% to US$83.99.
Garcia Rosa attributed the upturn to a return of leisure travellers caused by Buenos Aires being featured prominently in several travel magazines. “Buenos Aires is a market that’s tremendous,” he said. “There’s been a strong performance of luxury.”
He added, “Buenos Aires is one of those cities (where) every year you look at Conde Nast Traveler, and it’s one of the 10 cities that are selected for travellers.”
South America as a whole held together reasonably well during the downturn and has been showing signs of a rebound of late, he said.
“The main markets in South America are recovering,” Garcia Rosa said. “The coasts have been doing very well.”
Colombia and Venezuela are not recovering as well. Garcia Rosa believes this could be related to the tense relations between the two countries caused after former Colombian President Alvaro Uribe said Venezuela was being used as a hideout for rebels associated with the Revolutionary Armed Forces of Colombia.
Most of the development thus far has come in the way of mixed-use developments, said Garcia Rosa, who also is president of the South American Hotel & Tourism Investment Conference being held 27-28 September in Cartagena de Indias, Colombia.
Developers are choosing hotels to anchor their developments, he said. These developments generally include higher-end properties, especially in Argentina. Garcia Rosa added that secondary cities in particular are being targeted. The generally low cost of land in South America has added fuel to the development fire.
“Real estate developers understand they can take advantage of hotels,” Garcia Rosa said. Argentina should have no oversupply concerns. The number of projects in the pipeline isn’t an overwhelming amount because “demand is there”, said Garcia Rosa.
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This is some good news for argentinians.
No-one coming except Brazilians and drug bosses!
Not even the Argies, they can't afford a room...Laugh.
That's 100,000,000,000 pesos to 1 (new) peso.
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