New Construction Surges In Latin America And The Caribbean – Forbes

Latin America And The Caribbean have become prime real estate markets for developers seeking to capitalize on the exciting growth of these destinations. For example, at the close of Q1 2024 Latin America’s hotel construction pipeline marked a whopping 11% increase, signaling a surge in hospitality development in the region. With a high supply of new hotel openings anticipated for 2025, hoteliers in the region can capitalize on demand from North American travelers.

Under CEO Sloan Dean’s leadership, Remington Hospitality has quickly grown its presence within the Latin America and Caribbean markets over the past year. Recognizing the heightened importance of community in the CALA region, the hotel management company recently opened an office in Miami to leverage local partnerships and foster authenticity.

Dean recently offered insights into these burgeoning markets.

What has been the impetus behind the construction surge in both Latin America and the Caribbean?

The construction surge in Latin America and the Caribbean is largely driven by an increase in lifestyle, wellness and experiential travel, particularly among higher-spend customers. These travelers seek value-conscious experiences that offer true luxury and extensive amenities, and this demand shows no signs of slowing down. Additionally, the region’s construction surge has been positively influenced by the rebound of the travel market following the significant impact of COVID-19. Trends have been moving consistently in a positive direction, signaling a strong recovery.

The primary customers fueling this surge are Americans and Canadians, who benefit from the ease of access provided by direct flights to the region. From the hotel owners’ perspective, Latin America and the Caribbean need best-in-class hotel management companies, and we see an opportunity to enter that market and offer those services.

Furthermore, specific locations like the Dominican Republic are seeing heightened activity due to their appeal to both tourists and a large number of Dominican expatriates living in the U.S. These expatriates frequently travel back to the Dominican Republic for extended stays, contributing to the sustained demand for new construction projects.

What prompted Remington Hospitality to move into these markets?

Remington Hospitality’s decision to move into these markets was driven by several strategic factors. Firstly, the potential for significant revenue growth was a major attraction. The hospitality market in these regions, particularly in the Caribbean, is dominated by branded hotels, with 80-90% being either owner-managed or brand-managed. This leaves very little room for third-party management companies, creating a substantial gap in the market.

Recognizing this gap, we saw an opportunity to provide an alternative option for hotel owners. By entering these markets, we can offer a new solution for hotel owners who are either unwilling or unable to manage their properties themselves, or who do not want to enter into long-term agreements, typically ranging from 20 to 30 years, with major brands.

We’ve strategically positioned ourselves to capture a portion of the market comprising dozens of owners seeking flexible and professional management solutions. This move not only fills a significant void in the market but aligns with our broader goal to explore expansion in areas where customers want our business.

Within the next four to five years, CALA will become Remington Hospitality’s highest growth area on a percentage basis. We’ve entered markets in Costa Rica, the Dominican Republic and Puerto Rico, and anticipate expanding our presence as owners seek sophisticated third-party management options.

Describe what luxury development looks like in these regions.

Luxury developments in the Caribbean and Central America differ from those in the U.S. because these properties focus heavily on all-inclusive experiences. In CALA, all-inclusive resorts are a major component of luxury offerings. Understanding this, they have intentionally recruited professionals with experience in all-inclusive hospitality, recognizing its paramount importance for the success of many luxury resorts in these areas.

In contrast, luxury developments in the U.S. often emphasize exclusive, customizable experiences and high-end amenities without necessarily focusing on the all-inclusive model. The approach in CALA, with its emphasis on comprehensive packages that include lodging, dining and activities, caters to a different market segment looking for a seamless, hassle-free vacation experience. Wellness and health-oriented amenities are also popular. There is a growing trend towards soft-branded hotels that offer personalized services and a more intimate guest experience.

Describe your leadership approach to providing third-party management services.

I’m highly dedicated to authenticity and diversity, prioritizing bringing different perspectives and ideas to the table. I am also focused on giving back to local communities and creating opportunities to support Remington’s associates. Renowned for delivering unforgettable experiences, including locally authentic bar and food offerings, wellness packages, eco-tourism and exceptional guest services in the U.S., our team is committed to bringing these guiding principles to our services in the CALA region.

To enter the CALA market, we developed a highly tailored approach to resonate with the local community, as well as the financial and development landscape. Our Head of Task Force Sales is from Puerto Rico, helping us understand the cultural nuances we might not be as familiar with primarily operating in the U.S. so far.

We are also highly relationship-oriented, recognizing that community is a core value of business in the region and focusing on collaborating with local partners. U.S. business models tend to be highly transactional in nature, and we want to ensure that we do it right. We recently opened an office in Miami to develop local partnerships and foster authentic connections. Four of our senior leaders are originally from the CALA region, speak fluent Spanish and possess a unique understanding of the region. This is a key element toward delivering memorable beverage and food experiences for our guests and creating profitable revenue streams for our owners.