Hotels From Around The Globe Are Bulking Up In Brazil
<B>Hotels From Around The Globe Are Bulking Up In Brazil</B>
By Bruce Serlen & Kellie K. Speed
Recognizing how much the economy of Brazil has rebounded in the past year, a slew of major hotel chains recently announced plans to open new properties there. Most of the new development will be based around Sao Paulo, which has seen particularly strong growth recently as an international trading center.
Sol Melia Hotels, for example, plans to open 22 new business hotels there by the end of 2001. "Following devaluation of the currency 13 months ago, the Brazilian economy struggled, but has now come back so strongly that we see tremendous opportunity there," said Emanuel Schreibmaier, vice president of sales and marketing of the Americas for Spain-based Sol Melia.
Brazil's gross domestic product grew 3.1 percent in the fourth quarter of 1999, compared with the prior year, outperforming analysts' expectations. Foreign direct investment totaled $30 billion for the year, again beating forecasts.
"Sao Paulo especially is seeing an influx of international travelers from the United States, Europe and elsewhere in Latin America--many representing multinational companies," Schreibmaier said. "We project 50 percent of the new hotels' business travelers will come from outside Brazil with the other 50 percent being Brazilian."
The 22 hotels that Sol Melia will manage for the state-owned company, Infraero, cover a range of property types and will fly different Melia flags. Categories include: deluxe (Gran Melia), full-service (Melia Hotel), midprice (Melia Confort) and budget (Sol Inn).
At the deluxe category, Gran Melia Hotels will feature executive club floors and fully equipped business centers. The largest property opening this year, however, is the 308-room Melia Confort Nova Faria Lima, which will be part of Sao Paulo's new International Trade Center complex.
"While the levels of service will vary, all the Melia brands will share a common mission: to provide an environment that allows business travelers to do their jobs efficiently and effectively," said Schreibmaier. "For the international business traveler especially, a service orientation is taken as a given, so this is what we expect to deliver." Elsewhere in Brazil, Sol Melia is developing hotels in Rio de Janeiro and Brasilia, seat of the federal government.
According to Schreibmaier, the pace of development has accelerated in the country to make up for the slowdown that occurred at the time of the currency devaluation--and in anticipation of the economy remaining robust.
"For corporate travel buyers, we'll negotiate on a worldwide basis for all of a company's needs or negotiate local rates for a particular property or properties in Brazil, where there is volume need," he said. Sol Melia also will work with travel management companies to develop and promote corporate rates.
Of the business travel market in Brazil, Jason Hartford Smith of the Brazilian Consulate in New York, said, "a growing demand for consistent quality three-star hotels particularly is evident."
Traditionally underserved by low- to midprice accommodations with acceptable infrastructure, average daily rates among this hotel class in Brazil's major cities were estimated to be $120, with general occupancies of 42 percent--despite last year's devaluation. Successful privatizations and long-term infrastructure investments, coupled with strong business convention growth in cities like Sao Paulo, are contributing to this modicum of demand.
And growing to meet this demand is the Porto Sauipe Tourist Park, which is in development as a contemporary, large-scale resort of nearly 300 new hotels with guest room capacity for 10,000 people. The Porto Sauipe project will include Accor Hotels of France, which has constructed 77 hotels in Brazil since 1995 and intends to double that number over the next five years.
In addition to Accor and Sol Melia expanding their brands in Brazil, Bass Hotels & Resorts is slated for 50 more Brazilian hotels. And beginning with the single acquisition of the formerly Japanese-owned Cesar Park Hotels and Resorts in May 1998, Mexican Grupo Posadas now is expected to grow by six to eight hotels per year, representing a significant influence of the Mexican chain in South America. Other hotel investors include Hong Kong-based Renaissance Hotel Group, Portugal's Pestana and even Choice, Hyatt and Marriott hotels of the United States.
Along with the Porto Sauipe Tourist Park, a project called Costa do Sauipe Resort--costing more than $100 million--is in the works. The resort will host top international hotel chains, constructing four- and five-star properties by the Linha Verde, the new highway connecting Salvador to the North coast.
The first resort destination project of its kind in South America, Costa do Sauipe will introduce six new theme inns, and Marriott International will open the 256-room Costa do Sauipe Marriott Resort & Spa and the 237-room Costa do Sauipe Renaissance Resort. Marriott currently has two properties in Brazil: the 452-room Renaissance Sao Paulo Hotel and the 230-room Rio de Janeiro, which is under construction and slated to open later this year.
"We are truly excited by this opportunity to grow our presence in Brazil and to participate in the early stages of this ambitious resort project," said Ed Fuller, president and managing director of Marriott's international lodging. "Bahia is emerging as an important international destination. We look forward to working with the local authorities to encourage conference managers to discover the beauty and hospitality of this region."
In its first phase, the resort project will comprise five hotels with 1,500 guest rooms, a town center with restaurants, a shopping center, golf course, tennis courts and equestrian center. Marriott's Costa do Sauipe property will feature a specialty restaurant, a casual dining facility and entertainment lounge.
Other amenities for the corporate traveler will include a business center, gift shop, retail shops, an outdoor swimming pool, spa and fitness center. The conference center will offer a large ballroom, one junior ballroom and conference rooms as well as a board room for smaller meetings.
Marriott's second hotel going up in the resort--the Costa do Sauipe Renaissance Resort--will provide a pub and pool bar, a grill for dining and entertainment, game room, sundries shop, fitness center and outdoor swimming pool. Its conference facilities are much smaller than its sister property, providing just a junior ballroom and smaller conference rooms.