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GLOBAL HOTEL
NETWORK (SM) REPORT
Curitiba,
Brazil's Hospitality Market |
This week's GLOBAL
HOTEL NETWORK (SM) REPORT provides a look at "Curitiba,
Brazil's Hospitality Market" and is sponsored by the V Annual
International Hotel and Resort Investment Seminar (Sao Paulo).
Michael Asmussen, president, Asmussen &
Associados (Cotia, São Paulo), and Michael Schnürle, Consultant,
Asmussen & Associados (Cotia, São Paulo), report:
Introduction to Curitiba
Curitiba is - with 1,5 mil inhabitants - the third largest state
capital in Brazil. Thanks to its organization and infrastructure,
it is considered one of the best life quality cities in the world. The
7% annual growth of the local Industry Park exceeds the national average
by almost 75%.
Lodging Supply Trends
According to our research, Curitiba had 32 hotel establishments
comprising 2.900 rooms in 1989. Another 37 hotels, totaling 3.150 rooms,
were added to the local supply between 1990 and May 2001 totaling 6.050
rooms in 69 hotels. Room supply is expected to reach at least 7.550
rooms in 81 hotels in 2003.
Two properties account for the current supply in the top price tier with
a total of 300 rooms. Another one will add 170 rooms in the near future.
It appears that the lodging market in Curitiba is hardly ready for
five-star hotels yet.
The current upscale price tier supply adds up to 6 hotels, 700 rooms and
should almost double in the next three years, totaling 10 establishments
with 1.270 rooms.
The midscale and economy price tiers hold most of the pre-‘89
establishments - and almost 80% of the market - a fair part of those
being run down properties, hardly competitive in the new market
standards. 7 establishments comprising 770 rooms will be added to the
existing 54 establishments and 4.600 rooms in the next three years,
totaling 61 hotels with 5.370 rooms.
The supply in the budget price tier totals 7 establishments comprising
470 rooms. No addition to supply is planned.
It is interesting to observe that half of the current room supply in
Curitiba is independently operated. 30% is operated and branded by local
chains and the remaining 20% by international brands such as Sheraton
Four Points, Ibis, Holiday Inn and Courtyard by Marriott. The
proposed hotels in the Curitiba market are all chain affiliated - 40% to
national and 60% to international chains and brands.
Lodging Demand
Lodging demand in Curitiba is divided in three basic segments: 60%
commercial, 30% meetings and conventions, and 10% leisure. The summer
months December, January and February hold the lowest occupancies,
around 50%.
Curitiba’s lodging demand has been showing a consistent 5% annual
growth. Nevertheless, occupancies have been falling from above 65% in
1998, to below 55% in 2000. The recent supply addition is largely
responsible for this. A natural resettlement in the price tiers - some
old establishments closing their doors and few renovations, downward
repositioning, very significant advances in productivity and an entirely
new approach to sales and marketing - is expected in the next two years.
Occupancies are likely to continue low during this time. Recently
installed industry heavyweights such as Renault, Audi/Volkswagen, Tritec
Motors and Kraft should contribute to the constantly growing demand and
guarantee a healthy 70% marketwide occupancy by 2005.
Between 1995 and 2001 ADR’s evolved from R$ 88,00 to R$ 140,00
reflecting an actual loss in purchasing power due to the period’s
inflation.
Funding
Where is the money coming from? Whilst the overwhelming majority of
funding for the 1,500 new rooms is staked by small individual equity
investors, in the upper end of the market, corporate equity is the rule.
Probably more than 80% of the total investment that fuels the massive
midmarket supply expansion comes from small private individual
investors, in the popular Brazilian flat model - hotels are sold to
individual investors, one room at a time, under a condominium structure
(there’s actually one owner and a separate deed for each room) that is
then operated by a major brand. The remaining funding comes from a mix
of developers’ equity and some minor proportion of local financing
(mostly BNDES, the National Bank for Economic and Social Development).
GHN WEB SITE RECOMMENDATION
Embratur
www.embratur.gov.br
GHN SPONSOR MESSAGE ```````````````````````````````````````````````
Make plans now to attend the V
Annual International Hotel and Resort
Investment Seminar -- The Most Important Hospitality Industry Investment
Seminar in South America, to be held October 14, 15, 16, 2001 at the
Hotel Transamerica, Sao Paulo. For information, please contact: mailto:bsh@bshinternational.com
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The GLOBAL HOTEL NETWORK (SM) REPORT is a regular feature
of the weekly globalhotelnetwork.com e-Newsletter -- http://www.globalhotelnetwork.com/public/ghn.e_newsletter.html
read by hospitality & travel industry executives worldwide.
Mid Year Subscription Rates are now being offered for these regions:
*ASIA PACIFIC
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For information, please contact Robert Harp at mailto:harp@globalhotelnetwork.com
Copyright (c) 2001 Global Hospitality Resources, Inc., San Diego, CA USA
www.globalhotelnetwork.com
All rights reserved. Reprinted with permission.
CONTACT INFORMATION
Global Hospitality Resources, Inc.
www.globalhotelnetwork.com
13444 Pantera Road,
San Diego, California, 92130 USA
Telephone: 858-793-3366 Fax: 858-793-3367
E-mail: ghr@globalhotelnetwork.com
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