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Latin America Report

'Tropicalized' Space: U.S. Extended Stay Hotels Make A Push Into Latin America

Courtesy Homewood Suites
A model of a Homewood Suites extended-stay bedroom for Latin America.

These days, if you’re a South Florida business executive like Liane Ventura, chances are you log more business travel time in Latin America and the Caribbean than you do in the United States.

Over the past decade – as Latin America experienced one of the biggest economic booms in its history – the region was more than just Miami-Dade County’s largest foreign trading partner. It became a world where U.S. businesspeople found themselves parachuting in to make one deal, only to find themselves needing to stay longer to make one or two more – and then, what the heck, invite the spouse down to see Machu Picchu for a couple extra days.

“Peru, Chile, Uruguay, Colombia – we think we’re going for two days and it turns into two weeks,” says Ventura, senior vice president for international business at the Greater Miami Chamber of Commerce.

RELATED: How Miami Is Filling The High-Tech Void In Latin America

So Ventura and other hemispheric road warriors feel as if they just received an overdue upgrade award. U.S. hotel chains like Hilton’s Homewood Suites and Marriott’s Residence Inns have recently announced they’re making a push into Latin America with extended-stay properties – hotels where guests usually stay a week or longer. With amenities like kitchens and ample work spaces, extended-stay suites feel more like small apartments than hotel rooms.

Memphis-based Homewood Suites just signed deals to build properties in the Dominican Republic and Mexico, which are slated to open next year. By the end of the decade, the company plans to have more than 30 hotels throughout the region, including Brazil.

Maryland-based Residence Inn already has three hotels in Latin America – in Costa Rica, Panama and São Paulo, Brazil – with six more in the pipeline.

On a recent morning, Homewood’s global brand chief Bill Duncan gave a tour of a prototype Latin American suite set up near Miami International Airport.

There is tremendous demand in Latin America for this. I just took a tour of Lima, Peru, with about 10 other people. Every single one of them had been there for at least two weeks. – Bill Duncan

“Definitely more art,” Duncan told visitors. “Definitely a little bit more color, brighter colors. This can also be what we call tropicalized.”

“There is tremendous demand [in Latin America] for this,” Duncan told me. “It’s just been underserved. I was just in Lima, Peru. Took a tour around the city with about 10 other people. Every single one of those people had been there for at least two weeks.”

Latin American hotel companies have shied away from building extended-stay properties, largely because they require more space than standard hotels. But research does show extended-stay demand is strong for travelers from inside as well as outside Latin America.

“Latin American companies shouldn’t have been resisting this,” says Ventura. “You’ve got a full kitchen, they deliver groceries, you have a dining area. Some Latin American hotels, a breakfast can cost you anywhere from $26 to $56.”

Extended stay – from room rates to dining and parking – is generally more affordable than standard hotel stays. With more leg room.

That’s why it’s grown so popular in this country. Studies show half of all U.S. business travelers have used an extended-stay hotel in the past year, including three-quarters of millennials.

“A third of all business travel room nights, about a quarter of leisure nights, are part of an extended stay,” says Diane Mayer, Residence Inn’s global brand manager. “The demand for our product far outstrips the supply.”

OLYMPIC-SIZE BOOM – AND BUST

One new Residence Inn will open in June in Rio de Janeiro, Brazil, the site of the 2016 Summer Olympics. That hotel may fill up quickly – largely because standard Rio hotels are so expensive, as soccer World Cup fans found out two years ago.

“There are officials and media and TV production and all kinds of people who actually go there quite in advance of the actual events,” Mayer notes.

But Brazil also raises an important question for these hotel investments – each of which can run in the tens of millions of dollars.

Credit Residence Inn by Marriott
A full-service kitchen in a Residence Inn suite in San Jose, Costa Rica.

The fact that U.S. business travelers spend so much time in Latin America today does reflect the region's recent and remarkable boom.

“The region has experienced strong growth, increased industrialization,” says Ted Middleton, Hilton’s senior vice president for development in Latin America. “So we’ve had a record year as far as the number of properties we’ve put in the pipeline there.”

Still, Latin America’s boom has gone bust. Brazil is in a deep recession, and the region as a whole expects no economic growth this year. That could make these hotel ventures challenging.

Even so, Homewood’s Duncan insists their affordability positions them well for that new economic reality.

“This is a marathon, not a sprint for us,” he says. “We’re very committed and focused on helping create this segment. So we’re going to work through the peaks and valleys over time.”

In other words, they’re in Latin America for the extended stay.

Tim Padgett is the Americas Editor for WLRN, covering Latin America, the Caribbean and their key relationship with South Florida. Contact Tim at <a label="tpadgett@wlrnnews.org" class="rte2-style-brightspot-core-link-LinkRichTextElement" href="mailto:tpadgett@wlrnnews.org" target="_blank" link-data="{&quot;cms.site.owner&quot;:{&quot;_ref&quot;:&quot;0000016e-ccea-ddc2-a56e-edfe78d10000&quot;,&quot;_type&quot;:&quot;ae3387cc-b875-31b7-b82d-63fd8d758c20&quot;},&quot;cms.content.publishDate&quot;:1678402495379,&quot;cms.content.publishUser&quot;:{&quot;_ref&quot;:&quot;00000182-9031-d06e-ab9f-bebd44c50000&quot;,&quot;_type&quot;:&quot;6aa69ae1-35be-30dc-87e9-410da9e1cdcc&quot;},&quot;cms.content.updateDate&quot;:1678402495379,&quot;cms.content.updateUser&quot;:{&quot;_ref&quot;:&quot;00000182-9031-d06e-ab9f-bebd44c50000&quot;,&quot;_type&quot;:&quot;6aa69ae1-35be-30dc-87e9-410da9e1cdcc&quot;},&quot;cms.directory.paths&quot;:[],&quot;anchorable.showAnchor&quot;:false,&quot;link&quot;:{&quot;attributes&quot;:[],&quot;cms.directory.paths&quot;:[],&quot;linkText&quot;:&quot;tpadgett@wlrnnews.org&quot;,&quot;target&quot;:&quot;NEW&quot;,&quot;attachSourceUrl&quot;:false,&quot;url&quot;:&quot;mailto:tpadgett@wlrnnews.org&quot;,&quot;_id&quot;:&quot;00000186-c895-df0f-a1bf-fe9f90180001&quot;,&quot;_type&quot;:&quot;ff658216-e70f-39d0-b660-bdfe57a5599a&quot;},&quot;_id&quot;:&quot;00000186-c895-df0f-a1bf-fe9f90180000&quot;,&quot;_type&quot;:&quot;809caec9-30e2-3666-8b71-b32ddbffc288&quot;}">tpadgett@wlrnnews.org</a>