US billionaire George Soros has reportedly agreed to invest $300 million in building as many as 5,000 new hotel rooms across South America. Soros’ investment indicates that Latin American economies are not going to crumble; they are the future regions of growth.
According to Wall Street Journal, Soros has partnered with Argentina’s Fen Hotels for this investment. Currently operating 35 hotels across Latin America, Fen is planning to build new hotels in Chile, Ecuador and Peru over the next three years.
The Argentine firm told the Journal it sees better potential for its growth in South American countries, with the exception of Brazil, the most populous country in the region: “Brazil is too expensive to develop there. But if it turns around, the other countries will follow.”
Hungarian-born Soros is one of the big bulls on the Wall Street.
According to data compiled by STR Global, the occupancy rate is declining in most of South American countries, including Argentina, Peru, Ecuador and Brazil. The same firm says there are 425 hotels totaling 67,007 rooms are under construction across South and Central America.
Two years ago, Jones Lang LaSalle predicted that the Latin American hotel industry would increase its room supply by 65 percent over the next 10 years. In its report, LaSalle said that many countries in the region were still at the initial stage of their transformation toward services-oriented economies.
Analysts believe that the growing service sector industry is generating demand for hotels. In the past few years, several US hospitality companies, including Hilton, Intercontinental, Starwood Hotel & Resorts and Best Western, have expanded in Latin America, particularly in South America. Last year, Hyatt announced plans to develop as many as 10 hotels in Latin America.