Plagued by the global recession that has slashed both business and pleasure travel, the hotel market is suffering on an international level and investors have backed away from buying or building in most locations, with a few exceptions, like Brazil. According to a new report by real estate services firm Jones Lang LaSalle Hotels, the positive long-term growth forecast for Brazil is popping up on the radar of those who are in the position to invest.
Brazil’s hotel market hasn’t gone unscathed in the widespread economic downturn, however it continues to have comparatively good numbers and desirable fundamentals. Devaluation of the country’s currency is playing a part in the market’s success. The value of the Brazilian real has been on the decline for the last nine months, which makes it more cost effective for foreigners to visit. As a result, occupancy levels at Brazil’s resort hotels have increased, and the numbers have risen for upscale urban properties that denominate rates in U.S. dollars. And given the limited availability of institutional quality hotels, with international and national brands currently comprising a mere 12% of the country’s hotel offerings, average RevPAR is on target to continue to grow for the rest of the year.
But it’s not just the contingent of international travelers–attracted by the devaluating national currency–that is keeping Brazil’s hotel market afloat. The country’s burgeoning middle class is also a factor in the lodging industry’s stability amid global economic turmoil, and its auspicious long-term outlook. The middle class has expanded 10% since 2004, currently accounting for 52 percent of the population whilst the upper middle class is also growing, presently representing 16% of the population.
