The Caribbean and Latin American (CALA) region remained a top destination for travelers in 2024, with visitation increasing by 5% to 10%. In response, hotel companies are actively developing in CALA, while regional owners and operators are innovating to meet the evolving demands of today's travelers.

To provide valuable insights, CBRE has gathered leaders from major hotel companies with a strong presence in the Caribbean and Latin America to share their thoughts on current trends and future growth in these vibrant destinations.

2024 In Review

As we reflect on 2024, it's clear that the Caribbean and Latin American (CALA) region has continued to thrive as a premier destination for travelers. Most of the executives agree that this year has been positive, with increased visitation driving stronger revenues and profits. However, the pace of growth has moderated compared to the exceptional increases seen in 2022 and 2023.

Camilo Bolanos summed up Hyatt’s 2024 performance as ‘impressive’. Our resort portfolio in the region has done extremely well, although we have leveled from the 2022 and 2023 highs in the cycle. Francesc Colell from Palladium shared a similar experience. From my point of view, 2024 has been a good year for the hospitality industry, and we continue to see very positive growth rates. However, the political situations in some countries, wars, and the U.S. presidential election has caused a slowdown in pickup for Q4 2024 and Q1 2025.

Other executives also pointed to challenges that emerged in the latter half of 2024. Conor Lawler from Sandals observed a decline in leisure travel as post-COVID demand normalized, compounded by high interest rates, and reduced discretionary spending. Dean Sullivan from Playa noted the impact of the U.S. State Department’s travel warning for Jamaica but praised the resilience of their properties in Mexico and the Dominican Republic.

Mauricio Elizondo from Posadas highlighted the strength of the Mexican Peso as a concern, leading to lower-than-expected room rates in U.S. dollars and higher expenses due to local payrolls. Despite these challenges, these key industry participants continue to expand in the region underscoring the strength in long-term demand patterns.

Hilton's Pablo Maturana expressed optimism, citing the addition of more than 50 new hotels to their CALA portfolio and expansion into new markets like Antigua and Barbuda, Bonaire, Paraguay, Turks and Caicos Islands, and St. Vincent & the Grenadines.

The Outlook for 2025

As we look ahead to 2025, budgeted RevPAR growth rates among our roundtable participants range from 5% to 8%, with variations by geography and property type.

Dean Sullivan from Playa Hotels & Resorts expressed optimism for the Dominican Republic, citing a strong foundation in MICE (Meetings, Incentives, Conferences, and Exhibitions) and group business. Additional flight capacity to the Dominican Republic during the early part of 2025 should also provide a tailwind. In the Yucatan, I think that Cancun proper will likely perform better than Playa del Carmen, but demand levels for both will remain strong.

Hilton's Pablo Maturana also foresees robust group performance driving growth in 2025. Additionally, business travel continues to rebound thanks to greater mobility. We expect our solid performance to continue in 2025.

Conor Lawler from Sandals anticipates consistent growth throughout the Caribbean, though he notes, Growth in some islands will be muted by 2024 hurricane activity and security warning alerts.

Guest Preferences

A key theme among our roundtable participants is the evolving nature of guest preferences. Francesc Colell from Palladium noted, The customer is increasingly more demanding and offering them good service with personalized experiences is highly valued. Conor Lawler from Sandals added, Guests are looking more and more for authentic local experiences and not just the status quo. They want to experience the differences in the different locations in terms of taste and feel.

Hilton's annual Trends Report highlighted that in 2024, guests sought to 'recharge' and are looking to 'maximize' their travel in 2025 with high-impact adventures and experiences. To meet these needs, Hilton is introducing new boutique and lifestyle brands to the region, including Tapestry Collection by Hilton, Tru by Hilton, Spark by Hilton, Motto by Hilton, and Curio Collection by Hilton. In addition to unique experiences, other guest preferences rating high were extended time for leisure travel (aka Slow Travel), digital room keys, and pet-friendly accommodations, said Pablo Maturana.

Mauricio Elizondo from Posadas emphasized the enduring appeal of all-inclusive properties in the CALA region. All-inclusive hotels continue to offer a solid value proposition, combined with certainty of services, experiences, and price. Posadas is currently opening a new family all-inclusive property in the Dominican Republic.

At Playa, shifts in guest preferences have led to enhancements in their all-inclusive offerings. Historically, all-inclusive resorts were known for their expansive buffets with an emphasis on quantity, not quality. Over the years we have been instrumental in reversing this trend, elevating the standard with innovative concepts, a la carte dining, and superior food and service, said Fernando Mulet.

Revenues and Expenses

CALA hotel operators, like their global counterparts, face challenges in boosting revenue and controlling costs. Our roundtable participants shared their strategies to tackle these issues:

Revenue Growth

  • Conor Lawler, Sandals: By consistently striving to offer more than customers expect, our aim is to always deliver great value for money and create memorable experiences to enhance customer loyalty and have guests return again and again.
  • Camilo Bolanos, Hyatt: Focus on direct sales. Revenue managers should optimize inventory with an emphasis on group-generated food and beverage.
  • Mauricio Elizondo, Posadas: Offer ancillaries and upgrades at the property level that enhance the guest experience. Also, generate a solid group base.
  • Dean Sullivan, Playa: Diversify business channels, enhance guest experiences, expand your market reach, and leverage unique offerings.

Expense Control

  • Conor Lawler, Sandals: Back to the basics in terms of workforce planning, contract reviews, and day-to-day cost control of inventory and assets.
  • Camilo Bolanos, Hyatt: Where applicable, establish shared services and cluster groups to spread overhead to multiple properties.
  • Mauricio Elizondo, Posadas: Staffing efficiencies are needed as costs have been hard to control due to inflation.
  • Dean Sullivan, Playa: Eliminate redundancies, implement strict budgeting and monitoring of expenses, utilize technology, and form strategic partnerships with your vendors.

Challenges and Opportunities

As we navigate the latter part of 2024, CALA hoteliers are acutely aware of the current challenges and yet they remain optimistic about the future.

Conor Lawler, Sandals: Lawler highlighted the impact the resolution of the U.S. Presidential election could have on travel. As with every election year, we saw a natural slowdown in activity that preceded the U.S. election. However, we fully anticipate things to pick up again as we approach the inauguration, especially as the Fed continues to lower interest rates.

Mauricio Elizondo, Posadas: Economic and political uncertainty have been concerns. Elizondo noted, 2024 has been a year of many factors involving deals in the region. Elections in Mexico, the Dominican Republic, and the United States delayed some decisions. Banks are taking longer to analyze deals. Money is harder to secure as rates are still high compared to other years.

Camilo Bolanos, Hyatt: Bolanos echoed the comments of Elizondo and Lawler, commenting that, The main challenge we see is tied to new construction and escalating development costs, as well as rising interest rates.

Pablo Maturana, Hilton: Intraregional travel and shifting travel patterns were noted as catalysts for future growth by Maturana, stating that, We are optimistic about the future of our industry based on the expansion of the middle class in the CALA region, the continued desire to combine business and leisure travel, the increasing mobility across generations, and the passion for travel and unique experiences.

Dean Sullivan, Playa: On the risks side, Sullivan highlighted weather-related events and contingency planning, The frequency of weather events such as the hurricanes near our Cancun properties underscores the need for robust contingency planning to not only ensure immediate guest safety but also operational resilience that affords quick recovery during such disruptions. From a growth perspective, Sullivan added that Playa’s growth will be driven by investing in property enhancements, strengthening strategic opportunities for sales, implementing technology for revenue growth and expense control, and working collaboratively with industry peers and government officials.

Francesc Colell, Palladium: Colell was balanced and reminded us that for every challenge, there is also opportunity. Guests expect more personalized and tech-enabled experiences. In response, we are investing in luxury and boutique properties that offer high-end experiences. This opens up new opportunities. We are also investing in eco-friendly solutions that will not only attract environmentally conscious travelers but reduce long-term costs as well."

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world's largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

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