Most are conversions of independent establishments in a sector with a tight budget. What the plans are, and when they estimate recovery
Insight
09 June 2021
Hotel chains expand in Argentina despite pandemic
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Tourism is experiencing the worst crisis in its history since the beginning of the pandemic. However, the largest international hotel chains do not stand still: they are advancing in their expansion projects in Argentina.
Companies such as Marriott, Accor, Hilton, and Wyndham are negotiating various agreements to install their brands in different destinations across the country, as they estimate that the advance of vaccination will allow the reopening of borders and will boost travel. After months of isolation and measures limiting movement, people will be eager to travel and have fun, they say. Although the hotel business, like the rest of those associated with tourism, was seriously affected by the pandemic.
The chains estimate that, from October, the sector would begin to reactivate. However, the recovery to levels similar to those of 2019 would be seen between the end of 2022 and mid-2023. In terms of profitability, perhaps, we should even wait until 2024.
"Hotel investment projects that had a significant degree of progress are still active, although they have been delayed. But the vision is that the repressed demand that exists for hospitality will generate a recovery in hotel performance in the coming years, as is already happening in other markets," said Santiago Berraondo, Senior Vice President of JLL, the Hotel Consulting firm.
The specialist explained that, in the United States, where the vaccination process is already advanced, hotel occupancy grew from 30% in the first quarter of the year to 50% in the last two months. The business is expected to recover in 2023.
"There is a strong repressed demand in leisure tourism. The segment is estimated to get recovered. First, local tourism, then the international one as the restrictions are lifted. Later, corporate tourism will be allowed, and lastly, they will allow organizing offline meetings," he explains.
Buenos Aires, like the rest of the capital cities of the region, was mostly hit by Covid-19: RevPAR (income per available room) was reduced 89% in 2020 compared to 2019, Berraondo said.
