Select-Service Hotels to Launch in South America

While markets like the US market are already experiencing the third or fourth waves of this ever-growing segment, South America is gearing up to receive the first wave, which will no doubt tap into the latest product standards developments adapted to the uses, customs, and realities of our marketplaces.

Spanish version

Courtyard by Marriott Guayaquil

Select-service is a segment comprising properties once known as limited-service and which, as a result of their revamped and more sophisticated guest facilities, are currently called select-service, and rightly so, standing between the limited-service and full-service hotels. Courtyard by Marriott, Holiday Inn, Hilton Garden Inn, Hyatt Place, Four Points by Sheraton, AC by Marriott, Aloft (Starwood), Fairfield Inn (Marriott) are some of the top brands in this segment that are actively working to replicate the development boom they had in the US, where despite some market ups and downs they have been able to showcase the appealing features of this business segment to a wide range of investors.

South America and particularly Brazil, Peru, Colombia, Chile, Uruguay, and Argentina, with their own characteristics and possibilities, offer huge opportunities in their cities counting as primary, secondary, and even tertiary markets. Today, the segment in the region is basically catered for by local or regional hotels, and very often underserved, not only due to the type of services provided by the properties and their features but also due to  the scarce supply
vis-à-vis current demand.

Just as was the case in the United States, these properties are likely to be adversely affected by the arrival of this new product. These hotels built 30, 40, and 50 years ago will find it hard or even almost impossible to adjust to safety and other standards without which it would be unthinkable to compete against any of the brands currently setting the trend in the select-service segment.

Hilton Garden Inn Santiago

Many developers and investors have made a note of the advantages of this segment that provides benefits both for them and for their guests. Today’s travelers are money-conscious, either on their own accord or due to the decision of the company on whose behalf they travel. While seeking the comfort of a full-service property, they are not willing or able to pay such rates. Investors, on the other hand, find manifold benefits; lower costs than those involved in building a full-service property (between 70 and 100 thousand dollars per room depending on the market, with very short construction deadlines), lower operating costs, and very good ROI. Furthermore, several of these select-service properties can be obtained in different markets for the cost of a full-service property, which certainly enables risk diversification.

It is no doubt a typical win-win ratio. This product has a very high cost efficiency ratio, and the end product is very attractive to consumers. A great deal!

Holiday Inn Express Bogotá

The segment’s signature brands, Courtyard, Hilton Garden Inn, have rightly recycled their products, and have added services and areas greatly appreciated by their customers, which in turn has led their competitors to define new products in order to seize the opportunity.  Such is the case of Aloft, Hyatt Place or AC by Marriott, without forgetting the refreshments of Four Points and Holiday Inn, among others. No one wants to be left out of this segment that will surely be welcomed by the South American markets.

Select-service properties have between 100 and 200 guestrooms, providing efficiency and comfort, spacious rooms with large beds and a sizeable work area, flat panel HDTV and mp3 dock station. These are some of the amenities and services available, which are typical of full-service hotels while keeping costs under control.

Restaurants in these hotels usually offer a limited menu that is not always available during any time and day of the week. Also, a gym with all the amenities required by today’s travellers, a cool and trendy lobby with an atmosphere designed to draw guests to socialize, and free hotel-wide wireless internet access.

Novotel Buenos Aires

Accor, which we have not yet mentioned, is however a clear player in the regional market, especially due to its huge expansion in Brazil. Its well-known Ibis product has set the trend and has not remained outside the process of improvement and up-grades needed to adapt to the demands of today’s travelers in a segment where they no longer want to be limited but to be more and more select.

It is certainly the right time for the select-service properties, and it seems that developers and investors are beginning to understand that South America is ready to join the expansion of a segment quite willing to offer satisfactions that nowadays are not so easily found in the world’s traditional markets.

Way to go!

 

 

April 16 th, 2012

South America E-News – April 2012 – South America E-News – April 2012 – hvsargentina.com/hvs-news/abril/agr-letter-eng/HVS-E-News-Abril-editorial-eng.html