Highlights:
- Hotels across the Central and South America region reported positive, but inflation-affected performance results in 2018, reports benchmarking specialist STR;
- Across Central and South American hotel occupancy grew 1.9% to 57.4%, ADR was up 21.8% to USD118.89 and RevPAR increased 24.1% to USD68.25 in 2018;
- The Caribbean hotel industry reported lower occupancy, but record-breaking ADR during 2018.
Across the entire region, STR's data shows Central and South American hotel occupancy grew 1.9% year-on-year to 57.4%. ADR was up more than a fifth at 21.8% to USD118.89 and revenue per available room (RevPAR) increased almost a quarter at 24.1% to USD68.25, based on US dollar constant currency comparisons. STR analysts note that ADR and RevPAR figures were pushed upward due to inflation in key countries throughout the year.
The Argentine capital Buenos Aires has been identified as a standout performer in 2018 experiencing its highest yearly occupancy rate since 2012. The 69.7% level was up 1.0% on 2017. Significant gains were also recorded in ADR and RevPAR which were up 88.4% to ARS3,914.77 and 90.3% to ARS2,727.55, respectively.
STR attributes the development to a large number of events held in the market in 2018, such as the WTTC Global Summit (April), the Youth Olympic Games (October) and TravelMart Latin America (September). It explains the significant jump in rates was due to the inflation of the Argentine peso.
The Brazilian city of Rio de Janeiro is also noteworthy for its 2018 performance as yearly occupancy increased in the market for the first time since 2011. It was not by a small margin either, up 9.9% year-on-year to 51.2%. However, STR warns that the overall performance was somewhat mixed amid the uncertain economic climate.
"The absolute value in the metric remained low due to lost tourism that came as a result of the economic crisis and security concerns in Brazil," it says, noting that supply decreased 4.2% as a "lack of consistent corporate and leisure business" made it difficult for some properties to operate. That said, ADR rose 0.4% BRL363.54 and RevPAR was up 10.4% to BRL186.10, compared to 2017.
There's a lot of eyes on Mexico currently and its hotels reported a mixed performance in 2018 with occupancy slipping -1.3% to 63.1%, ADR falling -0.6% to MXN2,300.04 and RevPAR down -1.9% to MXN1,450.53. Although in line with previous year's averages, the absolute occupancy was the lowest for any year in the country since 2014.
STR says the Mexico occupancy level was impacted due to "healthy supply growth" (2.4%) and "softened demand" (1.1%), which it explains was "likely influenced by political and economic uncertainty, along with safety concerns and US-issued travel advisories".
Among STR's defined markets for the country, Mexico Northeast registered the largest increases in each of the three key performance metrics where Monterrey, Saltillo and Tampico are the largest cities based on hotel supply. Mexico Central North, home to Guadalajara and Puerto Vallarta, reported the largest drop in RevPAR and Mexico Central South, home to Oaxaca and Acapulco, saw the largest decrease in occupancy.
The Caribbean hotel industry reported lower occupancy, but record-breaking ADR during 2018, according to the STR data. While occupancy levels slipped -1.1% to 65.2%, ADR was up 1.7% to USD207.61 and RevPAR increased 0.6% to USD135.46. The absolute occupancy level was the lowest in the Caribbean since 2012, but the ADR value was the highest for any year on record in the region, says the benchmarking specialist.
"Markets affected by the hurricanes of 2017 are recovering at a pace faster than what we've seen historically with previous hurricanes, such as Katrina and even Harvey," notes Rico Louw, client account manager, STR. "Investment in the region is strong, with nearly 100 projects in the pipeline that are expected to yield an additional 22,000 rooms in the next three to five years."
In absolute values, STR notes that Mar-2018 was the Caribbean's top-performing month for occupancy (74.0%) and RevPAR (US$190.78), while Dec-2018 produced the highest ADR level (USD262.97). Sep-2018 was the lowest month of the year across all three metrics: occupancy (48.9%), ADR (US$153.60) and RevPAR (USD75.08).