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Published on : Thursday, June 9, 2016
SAHIC President and President of RHC Latin America Arturo Garcia Rosa and Bench Events President and STR Board Member Jonathan Worsley are pleased to announce a joint venture with SAHIC, the highest-profile Latin American hotel and tourism investment conference organizer SAHIC promotes business and related real-estate industry projects. The SAHIC South America event, now in its 9th year, has achieved a reputation for drawing serious hotel investors, C-level hotel executives, and major developers, and is the only event of its kind held in the region. Worsley’s firm, Bench Events, which operates some of the leading hotel investment conferences around the world, has committed to SAHIC with a 50% investment. Going forward, the plan is to promote SAHIC to Bench Events’ subscriber base and to expand the SAHIC brand into other parts of Latin America.
“With our upcoming SAHIC event in Guayaquil, Ecuador, and with the participation of Cuba for the second consecutive year, now is the perfect time to introduce this part of the world to a new group of investors and potential opportunities,” states Garcia Rosa.
Garcia Rosa continues, “With the new administration and positive political reform in Argentina, the fall in the cost of assets in Brazil, owing to the devaluation of its currency, and the intense focus on tourism development in Ecuador, for example – the commercial opportunities in Latin America are robust. Countries such as Peru, Colombia and Paraguay have all shown consistently positive economic growth rates, and there is a strong choice of regional hotel companies available who are capable of managing new properties.”
“Bench Events will help us bring those interested investors with capital from Europe, the Middle East and Asia,” adds Garcia Rosa. “The willingness in Latin America to partner with international investors adds to the attractiveness of the region and it will help us showcase the multitude of opportunities that abound.”
Worsley adds, “I am delighted that Bench Events will have the opportunity to work so closely with Arturo who has clearly proven to be one of the most important figures in the Latin American hospitality development industry, and with SAHIC – the premier investment conference brand in the region. SAHIC brings excellence to its world class events, and Bench is delighted to bring our conference planning, outreach and know-how to the SAHIC team.”
With regard to the factors making Latin America particularly attractive to hotel investors, Garcia Rosa highlighted the following points:
A fall in the value of local currencies has made good quality assets available at an affordable price. For example, in Brazil, Uruguay and Colombia, currency devaluation has been over 20% year-on-year, rising slightly to above 30% in Brazil and Uruguay. Venezuela’s case is beyond any analysis as the crisis is out of control and its currency devaluation is over 100%. And Argentina’s year-on-year devaluation is in the order of 50%, although with the arrival of the new administration at the beginning of 2016, controls were lifted, thus allowing some appreciation of the Argentine peso.
Travel and tourism in Latin America is forecast to grow faster (at 3.7% /yr) than highly developed regions such as Europe at 2.9%. According to the World Travel & Tourism Council, Total Contribution from Travel and Tourism was $371b in 2015 and forecast to grow to $535b by 2026 and from 9.0% to 9.7% of GDP.
International Tourist Arrivals are forecast to grow at 5.3% pa to a total of 72.8m by 2026, contributing an additional $30b to the Latin American economy.
Compared with international norms, there is room for growth in more valuable international tourism and more valuable business use of hotels compared with leisure use. At present international visitors account for 17% of the total, whereas the global average is 27% and business use accounts for 19% compared to a global average of 23%.
In terms of aviation, IATA predicts passenger traffic growth in Latin America will average 6% per year over the next 20 years, which is above the average of 4.9% globally and Boeing predicts that Latin America will require over 3,000 new planes between now and 2034, almost tripling the numbers in service now.
During 2015, over 3.5m tourists arrived in Cuba accounting for a 17% growth in relation to 2014, with 44% revisiting the country. Direct income from tourism in 2015 reached US$800 m, which represents a growth of 10.7% on 2014. At present, Cuba has over 62,000 rooms in 360 hotels. This is complemented with around 19,000 privately held rooms, which totals over 80,000 available rooms in the market. The current hotel development pipeline envisages 134,300 available rooms by 2030 with an evaluated potential of 273,500 rooms, which is the maximum estimated capacity for hotel development in the country. During 2016, around 14,000 new rooms are expected to enter the market.
Worsley concluded, “There is so much potential in Latin America with hotel investment compared to much of Western Europe and the United States. There is real opportunity for stellar growth. The key is for international investors to get in early when the price is right and that opportunity is certainly here. ”