HOLLYWOOD, Florida — The critical first step of hotel development is building relationships, and that is particularly true in Latin America and the Caribbean, where a lot of the existing hotel supply is family-held.
That takes time, said Juan Corvinos, vice president of development for Latin America and the Caribbean at Hilton. In Hilton's case, foundations laid five years are now paying off in destinations such as Brazil, and at a pivotal time in the hotel industry's recovery from the travel demand crisis spurred by the COVID-19 pandemic.
"Last year was a record year for us in signings in Argentina. We did more than six deals in Argentina, which is a record. I mean, we currently don't have six hotels open Argentina, so it's a record. Brazil was a record year last year and will be a record year this year. It's a tremendous country and the No. 1 consumer of luxury goods in South America, so there is a lot of growth potential there," Corvinos said during an interview at the Caribbean Hotel & Resort Investment Summit.
Partnerships in the region, such as with franchisee Atlantica Hotels that owns properties under the Hilton Garden Inn and DoubleTree by Hilton brands, are yielding results in the region, he said. Much of the growth in the region is also attributed to the rollout of Hilton's conversion soft brands, as well as Motto by Hilton and Tru by Hilton debuts in Brazil.
In five years, Hilton has doubled its presence in Brazil, Corvinos said.
"We've taken a couple of steps to really regionalize. We're set up as a Brazilian entity," he said, adding that means speaking and doing contracts in the native language, "things to make the Brazilians always feel comfortable."
"They're surrounded by countries that speak Spanish. They're the only Portuguese-speaking in this region, and they're proud. That's great, because they are a phenomenal country. You need to play as locals. ... You need to adapt. We cannot come down there and try to give them the Bible. It's a relationship business. It took a long time to get to where we are."
Hilton still has room to grow in the region, too.
"Colombia is our 13th most important country in terms of hotel rooms in the world; Mexico is No. 5. So we still have a lot to do and the [hotel] supply is still 80% unbranded. I mean, I should be looking for something else if I didn't think that there was a lot of runway for us, but I believe that we will exceed expectations pretty quickly," he said.
Corvinos said that the pandemic has accelerated some development trends and interest, especially from the major hotel brands, in the region.
Much of that interest has centered around the all-inclusive resort segment, a space in which brand competitor Hyatt Hotels Corp. recently announced the acquisition of Apple Leisure Group and its resort brand management division AMResorts.
Hilton entered into a strategic alliance with all-inclusive hotel owner and operator Playa Hotels & Resorts in 2018, and currently has 11 all-inclusive properties, including the 444-room Hilton Vallarta Riviera in Mexico, which opened in August, as well as three resorts in Egypt.
Corvinos said Hilton's all-inclusive resort portfolio in Latin America and the Caribbean will "definitely double" by 2025.
"Doesn't seem like a fast growth, but we have 4,500 rooms open already and we're going to have 3,000 more in the pipeline, so 7,000 rooms, organically, you can get before 2025. ... They start stacking up. Each one of these babies is 750 rooms, on average, so I feel very comfortable that we'll get there," he said.
"And then you develop new quality properties, with full standards that you're able to implement, and then you have on the way some conversions so that the acceleration can already go. We drafted a plan for 2025 and we're on a very good ground to meet that."
Hilton is less likely to grow by mergers and acquisitions, Corvinos said.
"We want to do it in an organic way. You can do it with M&A, absolutely, that's anyone's prerogative ... but you've heard Chris [Nassetta, president and CEO of Hilton] say 'we don't acquire' because it distracts you. We are laser-focused on our priorities," he said.
Corvinos said Hilton has instead focused on hiring top talent to help guide the company's leisure, resort and all-inclusive strategy.
"And we started this before we knew leisure was going to be the recovery tool. It was serendipity; it has paid off," he said.
Editor’s note: Chris Nassetta serves on Hotel News Now’s parent company CoStar Group’s board of directors.