BULLISH: Alvaro Diago, president of InterContinental in Latin America, is bullish on the chain's outlook thanks to strong growth at properties like the Real InterContinental Costa Rica (above). (Photos: InterContinental)
Central America and Venezuela - along with growing franchises - help boost InterContinental's Latin America revenues.
BY JOACHIM BAMRUD
UK-based InterContinental Hotels Group PLC (IHG), the world's largest hotel operator by number of rooms, is growing strongly in Latin America and is expected to continue doing so in the future as well, company officials and independent experts say.
"I’m extremely satisfied with the first half results," says Alvaro Diago, president of InterContinental Hotels Group Latin America. "Our hotels overall have had an increase in occupancy, and rate."
IHG does not break down Latin America in its financial results, but Diago reveals that the chain's revenue per available room (RevPar) has gone up 29 percent in comparison to same period last year. "We’ve seen the biggest increase in history," he says.
That growth has been spurred by a combination of factors, including a dramatic increase in passenger flows into Latin America and intra-regionally, strong business at the hotels in Central America and Venezuela and growing local economies, according to Diago.
Another key factor is the growth in franchising, says Embree C. "Chuck" Bedsole, managing director of the hospitality and leisure group at Alvarez & Marsal Real Estate Advisory Services. "The company has attained [rapid growth] via a strong franchising program," he says. "This program has allowed [it] to increase their presence in the region without devoting large amounts of capital expenditures in the development of new hotels."
Of IHG's 61 properties in Latin America, 45 are franchised, according to Diago. "Franchising is now the market reality and the new business model," he says. "Therefore, it has dramatically increased. Most of our...
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