General Hotel investment information! - Hotel info
Hotel Industry
The hotel business in Brazil has become increasingly attractive to investors due to the high tourism and business growth rates. Indexes such as the REVPAR, which measures the hotel’s efficiency in capturing hosting income, have increased y-o-y since 2005 in all Brazilian regions. The South, Southeastern and Mid-West regions had outstanding performance with an over 10% growth rate. However, Brazil still lacks a more consolidated hotel industry, and there are highly attractive markets for entrepreneurial projects in underdeveloped regions or even for entrance in mature markets with niche projects.
It is important to highlight that REVPAR is an index with limited applicability; it reflects average daily rates and occupancy rates without taking into account other means of revenue such as events, convention centers, food and beverages, etc. The occupancy rate grew in all regions from 2007 to 2008, reaching between 60% and 66% in this last period. The average daily rate presented a mixed performance: stable in the Northeast, lower in the North and significantly higher in the remaining regions. The regions also showed a significant discrepancy in terms of absolute daily rates, varying from R$125 to R$170.
Current investments in this industry in Brazil are primarily done through hotels, condo hotels (condominium based) and mixed-use properties (where the hotels or condo-hotels are developed together with residential, corporate towers and/or malls).
The current industry momentum foresees innovative investment means for condo-hotel investors who purchase these residential units, including the right to lifelong use of the investment or even sharing the property, as well as modern time-sharing systems. Finally, it is important to emphasize that Brazil will host important events such as: Military Olympic Games (2011), Confederations Cup (2013), World Cup (2014) and the 2016 Olympics. These events will definitely bring demand for a significantly larger hotel infrastructure than the present one. |
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