Reprinted from HotelNewsNow
Leisure-driven resort destinations are best poised to rebound from the ongoing pandemic downturn, sources said.
GLOBAL REPORT—When looking at the investment opportunities in Latin America right now, owners seem to be tilting to more leisure-driven resort markets since the onset of the pandemic.
Speaking during the “Casa de capital—equity” session during the CHRIS+HOLA Connect online conference, Fernando Rocha, chief development officer for Fibra Inn, a Mexico-based real estate investment trust, said those markets seem like the most favorable based on the “analysis and data we have seen in the several months since this (pandemic) started.”
“Everything points to resorts and leisure-driven destinations on a faster recovery route,” he said. “Whether it’s a beach or other type of resort destination or some places where there’s not only business but strong leisure—I’m thinking of cities in Mexico such as Puebla, that have that mix—are places to look at.”
Much like in the U.S., he said he favors cities with drive-to demand, or in the absence of that short-haul flights. And he noted any possible deal must be underscored by something about the property that can be improved.
“I would say as investors that any acquisition targets are property that have some added value or possibilities, like renovations or repositioning strategies,” he said.
Rocha believes a leisure rebound is inevitable in the current environment.
“I think it’s happening,” he said. “I think after whatever degree of lockdown each of us lived through, there is a natural need to get outside, interact, travel maybe, and start slowly moving out and trying to change the dynamic we’ve seen for the last several months.”
Oriol Gimenez, managing partner of CPG Hospitality, said it’s important not to write off the region amid the current challenged environment.
His company remains a level of optimism for Mexico in particular, due to the “the secular trends that the country has with respect to tourism,” he said.
“We think COVID is just a hiccup in what the country has to offer in terms of size, quality and service levels,” he said.
A full bounce back likely won’t be seen for Mexico and other Latin American countries until the U.S. rebounds, since it’s the source of so much demand, and when there’s a broader return of international travel, he noted.
“We’ve been spending a lot of time trying to understand airlift and how it’s going to come back,” he said.
Daniel Lara, CEO of Caribe Hospitality, agreed, stating that it’s one of the “basic premises” of operating in the region that it is unstable.
“Crises are all over the place,” he said. “One year here and another year over here. Crises like hurricanes, earthquakes, riots are kind of usual in the region. And development takes time.”
Lara noted this is a “good time to rethink different things” and assess the opportunities in a company’s pipeline, but it’s important to not stand still.
“Although there is a crisis right now, there are going to be opportunities in the future, and you better start working now,” he said.
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