Interview with Salo Smaletz, Vice-President, Development for Latin America, InterContinental Hotels Group
InterContinental Hotels Group continues to grow in Latin America. The company opened 6,000 new rooms in the third quarter, the highest number of rooms in seven years, while Revenue per Available Room (RevPAR) in the region grew 6 percent in the third quarter this year.
The figures clearly show that Latin America is and will continue to be a strong market for the industry. But, facing the new decade, new trends and guest preferences are coming.
In this interview, on the sidelines of the 2019 SAHIC Conference in Quito, Ecuador, Salo Smaletz (left), Vice-President, Development for Latin America, InterContinental Hotels Group, shares his view on the trends in the Latin American market, and which countries to keep an eye on.
What trends are you seeing in the Latin American market?
Sustainability is a topic that is increasingly on the minds of our owners, guests and shareholders.
We know that sustainability is important to our corporate clients. Every year, more travel buyers ask for information about the environmental footprint of our hotels, so that they can make more sustainable choices in their travel procurement. In 2018, almost 60 percent of our business accounts asked for this information, such as carbon footprint and waste diversion rates, using the Global Business Travel Association (GBTA) corporate responsibility module.
As a business operating in more than 100 countries, we have an opportunity to make a real difference through our day-to-day operations. These changes not only help protect the environment and improve our reputation with guests and communities, but also have a positive impact on the bottom line for our owners.
For example, our online sustainability program, IHG Green Engage™ system, enables our hotels to manage and report their use of energy, carbon, water and waste – minimizing their overall utility costs and environmental impact. In 2018, IHG hotels and offices using IHG Green Engage sustainability platform avoided costs of $67 million.
Other major global initiatives include the removal of single-use plastic straws by the end of 2019. The new brand standard represents an average of 50 million straws removed from IHG’s hotel estate each year. Additionally, in July, IHG became the first global hotel company to commit all brands to removing bathroom miniatures in favor of bulk-size amenities – committing to complete this transition across our global estate of almost 843,000 guest rooms by the end of 2021. With an average of 200 million bathroom miniatures in use across our hotel estate each year, we expect to see a significant reduction in plastic waste.
Which countries currently stand out to you?
Peru continues to be a strong market with excellent opportunities.
In September, we announced construction of new InterContinental and Hotel Indigo properties in Lima, Peru. This marks the debut of both the InterContinental® Hotels & Resorts and Hotel Indigo® brands in the country, and the Hotel Indigo Lima Miraflores is the brand’s first property in South America. Both properties are expected to open in Q1 2022 and will be owned by Vistamar Inmobiliaria and managed by IHG.
Last February, IHG opened the Holiday Inn Express San Isidro Lima, a newly built 175-room property in the heart of the capital city with close proximity to shopping, restaurants, business districts and cultural centers.
IHG also opened a new Holiday Inn® in Piura, Peru in May. The 118-room property is the first for the brand in Piura, which is the business hub of Peru’s northern region.
Before the end of this year, IHG will open the Holiday Inn Lima Miraflores. The hotel will be the company’s fifth property in Peru.
Are there any emerging countries in the region that you are looking at?
Our development strategy is rooted in the pursuit of quantity with quality, to continue to secure the longevity and strength of our hotels and the relationships we have forged throughout the years.
We are always looking at developing new relationships with owning companies, as well as making our relationships with existing ownerships stronger where we can develop multiple-brand relationships with one owner. With the addition of the new brands to IHG’s portfolio, we can now offer even more options to our owners.
In our LAC region, we have a number of multiple-property relationships with owning companies, a model we seek to expand.
Right now, we are excited to return to Costa Rica to bring a new Six Senses resort to Papagayo. This will be the first Six Senses resort in Central America, which is fitting for a brand that is dedicated to sustainability. The hotel is scheduled to open in 2021.
We are also excited to have announced a new Kimpton in Roatan, Honduras to open early 2021. This project will be a complete reimagining of the existing Grand Roatán Resort and mark the first internationally branded hospitality offering on the island. Kimpton Roatan is the third resort for the brand in the Caribbean, joining the Kimpton Seafire Resort + Spa in Grand Cayman, which opened in November 2016, and the Kimpton Kawana Bay Resort in Grenada, which plans to open in late 2020.
How do you see the current Mexican and Brazilian markets?
Mexico continues to experience growth and provides a great infrastructure for hotel development. Currently IHG has 150 hotels and 23,455 rooms in the country.
Brazil is a country in which IHG has had a presence for decades with the opening of its first InterContinental in Belem, Brazil in 1946. The World Cup and the Olympics presented worldwide attention to the country, but it also created an oversupply in some of the markets. In spite of Brazil’s economic and political challenges, it is still considered a strong global economy, and the largest in South America.
In the last quarter of 2018, we opened the Holiday Inn Express Farroupilha in Rio Grande do Sul. We also have plans to open in 2020 the Holiday Inn Express Belem Brazil.
Furthermore, IHG looks forward to continuing steady growth in the country in secondary and tertiary markets.