From instability in Nicaragua to the leisure allure of Costa Rica, Central America offers a wealth of opportunities and challenges, according to experts speaking at the recent Hotel Opportunities Latin America conference.
MIAMI—There are various opportunities across Central America, according to a panel of experts who spoke during the “Opportunities in Central America” session at Hotel Opportunities Latin America conference.
Here are some highlights from that session.
1. It’s a ’complex group of countries’
Like any group of countries, the investment prospects vary from country to country and market to market, but Central America is unique in how tightly compressed the region is.
Raul Calvet, CEO of Calvet & Associates, said there are a lot of interesting things happening all at once.
“Central America is seen as a region, but it’s a complex group of countries,” he said. “You can hop from one to another in 30 minutes but change to a completely different world.”
While worry grows about Nicaragua, interest remains strong in Costa Rica and Panama and is growing in Costa Rica, he said.
“Investment from Colombia has grown 54%,” he said. “It’s a tremendous force to consider.”
He noted Colombia already carries a high level of sophistication in hotel operations, including a culture of established third-party managers and “local groups participating in our industry.”
2. Hoteliers value stability in Costa Rica, Panama
Panelists said Costa Rica and Panama are still viewed as the safest bets in the region, with Costa Rica enjoying continued strength for leisure travel and Panama viewed as the growing epicenter for business investment in the region.
Paul Adan, VP of development on Marriott International’s Caribbean and Latin American team, said he’s glad to see a positive shift in hotel fundamentals in Panama.
“We have great expectations (for Panama) in the medium-to-long term,” he said.
Calvet noted Panama has been bolstered by investment in sectors like financial technology.
Costa Rica, meanwhile, is benefiting from a “very stable political system,” according to Marta Molina Seal, principal for CPG Hospitality. She said her company is considering deals all around the region, but it feels more comfortable there because it’s comfortable with the laws and structure in the country.
3. Hope remains for Nicaragua
Calvet said recent instability in Nicaragua is definitely a challenge, but hope remains the dust will settle soon and the country will remain a favorable destination for investment.
He noted the country still has a strong labor market and strong incentives to invest.
4. Brands are hugely impactful in terms of confidence
David Fuentes, director of Latin America for RCI, said one of the biggest drivers of confidence for investors and guests in both a market and a specific property is the participation of big brands.
“I know without a big brand involved in a project, there won’t be good visibility in the market,” he said.
Fuentes noted this is true not just of hotel properties but for vacation rentals.
5. There’s an opening for homesharing platforms
Adan mentioned how Marriott is currently undergoing a homesharing pilot in London, and he believes that model could eventually migrate to regions like Central America.
Apple Leisure Group VP of Development Federico Moreno-Nickerson agreed, saying the hotel industry has an opportunity to expand the type of properties it incorporates across the globe.
“I think there’s a great opportunity,” he said. “Different parts of Central America are in different stages of development.”
He said ultimately homesharing platforms will become more normalized in the hotel industry, similar to how hoteliers are more accustomed to working with online travel agencies, noting that companies like Airbnb are “here to stay.”