Hoteliers Continue Investment, Despite Uncertainty

<B> Hoteliers Continue Investment, Despite Uncertainty</B>

By Robert Selwitz

Despite a plateauing of its economic performance and a resulting drop in hotel occupancy rates, hospitality companies are continuing to expand in Santiago, with the expectation that better times are just around the corner. There also is widespread confidence that, even though the nation's seemingly perpetual growth has paused, Chile is still one of, if not the most, viable sites for South American-based international investment and commerce.

Typical of current hotel growth is the new luxury property Marriott expects to open just weeks before the millennium. The new, $96 million, 250-room luxury property in Santiago's upscale Las Condes district will occupy the first 25 floors of a 40-story hotel/residential tower. There also will be two adjoining 18-floor wings of office space. Onsite will be two restaurants, two lounges, a ballroom divisible into three 700-sq.-ft. meeting rooms and a 600-sq.-ft. boardroom, a health club and sauna, outdoor swimming pool and business center.

Adding to the Chilean capital's stock of mid-range lodging options, Choice Atlantica hotels--the master licenser of Choice International in South America--will add two properties next year, a 72-room Comfort Hotel in Las Condes and a 128-room Clarion. "We are dedicated to opening the kind of hotels international business travelers seek at a price they are comfortable paying," said Choice Atlantica president and CEO Paul Sistare. "And that's not just in Chile but throughout Latin America. With our two new Santiago locations bringing our total to four in the capital, plus a property in La Serena, two hours to the north, we hope to be operating fifteen Chilean hotels by 2004."

Sistare added that there are plans for two Choice properties in Valparaiso, Chile's prime port, as well as in Arica, Granada, Iquique and Puerto Montt. "We are the first company to come in here and realize the real need for mid-market hotels," he said. "Right now in South America you basically have two choices: staying at 'perceived' five star hotels charging outrageous rates, or booking a property that is, shall we say, probably not up to international standards." Instead of rates soaring upward from the mid-$200 range, "Choice will provide absolutely top quality lodging for under $100," he said. "That's particularly important now, when increasing numbers of corporations are requiring their travelers to buy-down, often by seriously shrinking their per-diem limits."

In other Santiago lodging news, in the heart of the downtown area, the 156-room Hotel Plaza San Francisco just completed a $2 million guest room and public areas upgrade. In addition to the refurbishment, the nine-year-old property, now marketed as an SRS Hotel, also offers a unique checkin procedure for passengers departing Santiago via American, Lan Chile, Lufthansa, Varig and several other carriers.

"When hotel guests check out, they can immediately check in for their flights, receive boarding passes and head straight for security when they reach the airport," said Hotel Plaza San Francisco marketing manager Jaime Cerruti. "That's got to save them at least a half hour of pre-flight time."

There are also a number of other hotel projects in the scuttlebutt stage. According to Chilean tourism sources, Sheraton is expected to spend $70 million for regional expansion, and the Chilean company that owns Hotel Carrera--a long time downtown Santiago staple--will spend $62 million to develop five additional hotels throughout the country during the next three years. Other new-build possibilities may include a new Hilton, and a hotel at the Santiago International Airport.