Brazilian hotel sector outlook 2015

Jones Lang LaSalle (JLL) has released its latest Lodging Industry in Numbers, Brazil 2015 annual publication, which surveys 460 Brazilian hotels, providing the audience with an excellent insight into Brazilian hospitality market changes during 2014.

Despite a fair share of challenges that the Brazilian economy is facing, the nation’s hospitality market has reported another year of positive results. Year-on-year data reveals that for the tenth year in a row, Brazil’s urban and condo hotels posted positive RevPAR (Revenue per Available Room) growth of 1.4% for 2014.

Although the rate of growth was lower in 2014 than levels seen in previous years, tempered by the slow economic growth, the 2014 FIFA World Cup had a positive impact on the country’s hotel markets and the growth rate remained positive.

Occupancy levels averaged 64.9% in 2014, a decrease of 1.5% compared to the previous year. However, the decrease is still minor and hotels remain on good occupancy levels (65%), showing a stable occupancy rate since 2012 (figure 1).

Average daily rates, on the other hand, increased 2.9% compared to 2013 levels; however, somewhat below the inflation for the same period (5.9%). Although the economic issues have becoming more apparent, Brazil’s hotel industry has been maintaining very solid results thus far. And with the coming 2016 Summer Olympic games, the hotel industry will no doubt be boosted by the additional influx of international and domestic tourists arriving on Brazilian shores.

In terms of hotel supply, in 2014, there was a 3.1% increase in the number of rooms across the country, boosting the supply in Brazil. Key hotel markets such as Belo Horisonte and Rio de Janeiro experienced an even greater supply increase than the national average.

The rise in branded hotel rooms, of both national and international hotels, was even more significant, growing by 7.9% in 2014. This is highly positive news for the Brazilian hotel market, where the existing hotel stock, although relatively large, is in need of upgrading to higher quality branded hotels.

Meanwhile, JLL reported some highly positive results for resorts. In contrast to urban hotels, resorts saw continued improvement in performance fundamentals, a trend which began in 2013. The segment has benefited from depreciation of the Real since 2013, as it has become a less expensive choice for international tourists. Furthermore, many Brazilians opted to holiday domestically instead of travelling abroad, boosting domestic tourism, as the depreciation of Real made holidays abroad more expensive. As a result, in 2014 revenue in the resort segment increased by 33.4% and gross operating profit grew by 2.8% compared to the previous year.

Another positive piece of news for the hotel sector is that in 2014 Brazil saw the highest level of investment transaction volume in the country’s history. The three major investment transactions all involved private equity funds: the Quantum Fund acquired Atlantica Hotels, one of Brazil´s major management companies (with George Soros as one of the main investors); the GTIS Fund bought a majority of Brazil Hospitality Group’s shares, including its hotel assets, and took the company private; and the HSI Fund invested in two projects through a platform called 2.0 Hotéis. The first deal includes the ongoing development of 20 hotels under its own Zii brand in several cities throughout the country. The second is the acquisition of Arco Hotels, which spans 12 hotels in the state of São Paulo.

These recent transactions not only demonstrate that Brazil continues to attract institutional capital given the right investment opportunities, but are also a testimony to the growth potential in the country’s hospitality industry. Looking ahead, JLL forecasts that the expected spark to the country’s economic recovery, and the staging of the Olympic Games in Rio de Janeiro, will bring greater prospects for hotel performance in 2016.

In terms of top hotel brands ranking in Brazil, once again, Jones Lang LaSalle ranked Accor at the very top for 2015, a position maintained by the global group over the last several years. Accor in Brazil has currently 36,636 hotel rooms under management across 219 hotels, which is persuasively the largest number of hotels and rooms in the country. Thanks to the demand for good quality hotel brands and the top ranking of Accor in the country, Ritz-G5 is proud to present its two hotel development projects, which will both be managed by Accor upon opening. Namely, the four-star hotels: Mercure Natal and Piramide Natal.

Mercure Natal is a contemporary 252-suite, 4-star hotel located in the upmarket district of Ponte Negra. The hotel is currently under construction with the opening planned for 2017. This development occupies the last available plot on the prestigious Via Costeira and will offer excellent amenities including a business centre, private swimming pool, 24-hour concierge and an underground parking. Residents of this hotel will enjoy stunning direct views towards the Atlantic Ocean and a Brazilian landmark, the Morro do Careca (Bald Man’s Hill).

Sitting directly on the doorstep of the Atlantic Ocean just behind Parque das Dunas, the Piramide Natal hotel is perfectly located for discovering the surrounding areas and central Natal, via Via Costeira.  This 4 star hotel has 315 guestrooms, a water park, five swimming pools and a swim-up bar, a rooftop terrace, a fitness centre and spa tub, two restaurants, 24hr concierge and a business centre with a capacity for 2,500 seats. Piramide Natal hotel is currently under refurbishment (following Ritz-G5 acquisition in 2014) and is set to open its doors in January 2016.

For more information on how to invest in our hotel projects, please contact the team on +44 207 183 7565 or visit

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