Wednesday, November 28, 2007

Heads in Beds Beyond South Florida

South Florida hotel industry analysts are predicting anything from modest to flat growth in the local market during the next couple of years, but at least one Miami-based hotel division expects significant gains in its 2008 and 2009 operations.

InterContinental Hotels Group (IHG) Latin America’s nearest hotel is roughly 1,000 miles south of its Miami corporate headquarters, but “we attribute a lot of our success to the fact that we are in Miami,” says Alvaro Diago, area president for IHG Latin America. “Many of the suppliers who deal in the goods and equipment the hotels need are here. Many of the developers who build the hotels in Latin America are here. Many of the multinational corporations who want to do business in Latin America have regional offices here. And most of the investors in the business — the wealthy Latin American families who have been hotel owners there for generations now — come to Miami on a regular basis.”

The division handles Latin America hotel franchising and management for United Kingdom-based InterContinental Hotels Group PLC — the world’s largest hotel company by sheer room numbers, with nearly 564,000 rooms. “Miami is more or less the place to be if you want to be a key player in the hotel business in Latin America,” Diago says.

IHG, with brands that include InterContinental, Crowne Plaza, Holiday Inn, Holiday Inn Express and Staybridge Suites, has more hotels in Latin America than any other hotel company — 60 in 18 nations — and is acquiring more. This summer a whirlwind of openings included the company’s fourth hotel in Colombia — a 19-story Holiday Inn Express Hotel & Suites in Medellin. IHG also opened a 112-room Holiday Inn Santiago Airport in Chile, the nation’s first.

Diago is positioning the company to take advantage of booming economies in some parts of Latin America, including Brazil, where IHG has signed agreements with investors to build new hotels in four cities. “Brazil is an extremely important region for IHG, since it is the sixth most-populated country in the world,” Diago says. “Brazil’s continuous economic growth fuels its massive business and tourism industries, which provides tremendous room for growth for all our brands.”

Travelers in Latin America are increasingly brand conscious. Independent Miami hospitality industry analyst Scott W. Brush, of Miami-based Brush & Company, says international hotel franchising and operating companies like IHG Latin America are in a particularly good position these days — providing they have the strong brand identity to back it up. “It’s not something you can build overnight,” Brush says. “But if you have the strong brand and you maintain your quality standards, your brand becomes very valuable. Investors feel they can make money building hotels that carry your name.”

IHG has a strong brand history in Latin America. The InterContinental chain got its start in that region, when a nascent Pan American Airways opened a chain of hotels to support its air routes. In pre-Castro days, the InterContinental Havana was one of the most profitable and best-known hotels in the chain, building a brand that would endure for generations. “Our brand is the most important thing we have to offer,” Diago says. “That’s what we are all about.”

Throughout the region, Diago is aggressively growing the hotel network, including existing properties: By the end of this year, some 22 of the 61 IHG hotels in Latin America will have completed a two-year program involving $95 million worth of improvements and upgrades.

IHG has benefitted from hotel owners who are increasingly willing to make those expenditures, with the region’s booming economy spurring demand for high-quality hotels and giving the wealthy more money to invest. That is also helping IHG boost its total number of hotels in the region. “Latin Americans tend to be bricks-and-mortar people in terms of where they want to put their money,” Diago says, explaining that, with institutions and even governments occasionally unstable there, investors tend to prefer real estate such as office buildings and hotels.

A rise in internal leisure tourism within Latin America is also helping IHG grow. Diago says the tightened restrictions for entering the United States in the wake of the terrorist attacks of Sept. 11, 2001 mean affluent Latin American families who might have gone to Disney World for their annual vacation are now more likely to visit other destinations within Latin America. And more Latin Americans are travelling for pleasure, too, says Carlos Baruki, IHG Latin America’s senior vice president for marketing. “Worldwide, the projections are for a 5 percent growth in travel in 2008,” he points out. “But Brazil is looking at 9 percent and Central America is looking at 8 percent.”


Source : http://www.southfloridaceo.com/

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