In light of the recent global challenges that have significantly impacted the hospitality industry, it is now more important than ever for industry professionals to fully understand the reality of developing hotel properties in international contexts, particularly in Peru. For owners, developers, investors, and managers involved in hotel development and investment, the operating environment has shifted considerably, and as we enter 2023, it is crucial to consider how to respond to the latest challenges.
Despite the challenges, there are also opportunities to be found in the Peruvian hospitality industry. Here are six potential opportunities for hotel development projects in Peru:
- Capitalize on High-Growth Markets for Hotel Investment in Peru Despite the fluctuations in the hospitality industry, many markets in Peru have almost fully recovered or even surpassed pre-pandemic levels. With international travel on the rise, there are numerous emerging and opportunistic destinations that present attractive opportunities for hotel investment. The luxury sector in particular has experienced significant growth in the past year, and investors are also showing interest in mixed-use properties, long-stay options, and leisure resorts, particularly those at the upper end of the market. By focusing on high-growth markets, hotel investors in Peru can position themselves for success in the years ahead.
- Utilize Data-Informed Decision Making for Hotel Investment in Peru In today’s world, data is critical to making informed decisions in hotel investment. Forward-thinking data is particularly valuable in forecasting future trends, especially in a time of uncertainty. Accurate trading forecasts are crucial for operational reasons and managing asset strategies. Private equity investors and real estate investment trusts are seeking more detailed predictions to better understand the risk-reward options that align with their investment strategies. By embracing data-informed decision making, hotel investors in Peru can gain a competitive advantage in the market.
- Adapt to Shifting Investment Strategies As the hospitality industry continues to evolve, investment strategies are also shifting. In Peru, there are three notable trends to consider. Firstly, resort locations and secondary leisure markets are gaining popularity among investors. Secondly, due to lower staffing requirements, higher margins, and proven resilience, there is an increased appetite for extended stay options. Finally, hotel operators are diversifying their income streams with concepts such as co-working, retail, gyms, spas, and wellness, which is proving to be attractive to investors looking for reduced risk through diversification. As an investor in the Peruvian hospitality market, it’s important to be aware of these trends and adapt your investment strategy accordingly.
- Consider all deal structuring options The current economic climate has made funding a challenge. However, there are various deal structuring options available to investors in the Peruvian market. These options include franchising with white label management, flexible contract terms, and exploring dual-brand solutions. With the expansion of third-party operators, there is a push towards more flexibility in contractual arrangements between operators and owners in both leases and hotel management agreements (HMAs). Investors and lenders are becoming more astute and realizing that increased flexibility, such as shorter operating terms, can support them in unlocking value upon exit. It is essential for investors to explore all options and find the best deal structure that fits their investment strategies.
- Prioritize Environmental, Social, and Governance (ESG) requirements in hotel investment Investors are increasingly recognizing the importance of high ESG standards, not just for ethical reasons but also for their financial impact. ESG criteria are now a critical part of an investor’s due diligence process and will be closely reviewed before making a decision. This trend is not limited to international hotel brands and operators; individual property owners and operators must also prioritize ESG considerations to remain competitive. Investing in sustainable practices such as reducing energy consumption, minimizing waste, and promoting social responsibility can yield significant long-term benefits for both the environment and the bottom line. By demonstrating a commitment to ESG standards, hotel investors can attract a wider range of investors who prioritize socially responsible investing.
- Invest in upskilling yourself and your workforce In a challenging market, investing in upskilling can help you stay ahead of the competition. The hospitality industry in Peru offers opportunities for growth, especially in fields such as international hotel development and asset management, real estate investment and financing. Roles in these fields require knowledge in areas such as business and financial analytics, mergers and acquisitions, portfolio valuations and private equity. Training and development in these areas can provide an edge in making informed decisions and identifying opportunities for growth. As the industry continues to evolve, upskilling yourself and your workforce can be a key to success.
If you are an investor considering purchasing a hotel in Peru, look no further than F2F CUSCO. As experts in hotel sales, we can guide you through the entire process, from identifying potential properties to negotiating the best deal for you. With years of experience in the Peruvian market, F2F CUSCO has an extensive network and in-depth knowledge of the local industry, allowing them to provide you with personalized recommendations and insights. Whether you’re looking for a boutique hotel in the heart of Cusco or a beachfront resort in Máncora, we can help you find the perfect investment opportunity.
Contact us today and take the first step towards realizing your hotel investment goals in Peru.
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Enrique L. Gonzalez
+51 951 066 165
CEO F2F CUSCO