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Bogota business rebound attracts hotels
Hotel News Now
08.09.2010 
By Shawn A. Turner



BOGOTA—An influx of hotel rooms is not a prospect many hoteliers would envy. But the additional supply is being cheered in Colombia’s capitol city as it reflects a return of vibrancy.

Mario Leite, GM of the Sofitel Bogota, understands the sour reputation his city has garnered during the years as a result of drug activity, violent crime and other such activities. There were 252 murders in the city during the first two months of the year, a 5.4% increase over the comparable period in 2009, according to a story in colombiareports.com.

“Our main challenge is to change public opinion about the destination,” Leite said.


Return of business

It appears business sentiment, at least, is beginning to change.

Jose Bayona, GM of the Embassy Suites Bogota, said Venezuelan businesses are, ironically, increasingly moving to Bogota and Colombia because of political instability in Venezuela.

And hotels have sprouted up as well. Marriott International this year opened a J.W. Marriott property in the city and last October opened the Bogota Marriott Hotel. The two properties represent 503 rooms.

There are more rooms to come, said Bayona, who also is president of the Bogota hotel association. He foresees 3,000 additional rooms being added in the market during the next three years for a total of 141,000 rooms.

June 2010 occupancy in Bogota increased by 2.2% to 58.7%; average daily rate was up 20.5% to US$145.19; and revenue per available room jumped 23.1% to US$85.24, according to data from STR Global.

There are four projects in the pipeline in Bogota representing 737 rooms, according to STR Global.


Corporate business stability

The public perception of Bogota and Colombia has improved of late, and that is helping drive people to the market, said Konstanze Auernheimer, director of marketing and analysis for STR Global. Still, she acknowledged it is “not the most stable market.”

“It’s not the type of destination you think of as a holiday destination,” she said.

Indeed, hoteliers in the city report approximately 80% of their business comes from corporate travel. Still, hoteliers in the city will take visitors however they can get them, said Rodolfo Amaya, Hilton Worldwide’s regional director of brand performance support.

“The outlook is positive,” he said. “There is a lot of foreign investment—a lot of new companies.” The new companies making their way to Bogota include telecom, technology and natural gas companies.


The Leisure Situation

 While leisure business is low, Leite has noticed a bit of an uptick lately. Weekend occupancy is at 42%, up from 16% two years ago at his 102-room hotel. Sofitel Bogota’s profits have increased by 7.5% year-over-year, though Leite did not identify a specific figure.

Bayona also noticed an increase in tourism, particularly from the United States. His 96-room Embassy Suites property has seen occupancy increase to 60% from 57% during the period from January through the end of July.

Overall tourism from the U.S. is up 10%, Bayona said.

“We are one of the only true U.S. allies,” Amaya said in reference to political troubles that, for once, are affecting other nations in South America.

The forecast increase in supply is likely to only affect hotels that are poorly managed, Leite said.

“Perhaps we may lose some business, or lose some clients,” he said. “But when it comes to quality, we are fully confident that the hotels that suffer the most are those that never cared about quality.”

Similarly, Amaya and Bayona brushed off questions about supply. Amaya said the development is overdue.

“We haven’t had new investment in 10 years,” he said.

Leite did caution that hoteliers will have to carefully manage their properties and keep guest satisfaction at a high level as supply increases.

“In the addition of new inventory and rooms, we must be ready to be quite quick and quite fast in our strategy,” he said. “Otherwise, you lose ground. That’s natural.”



Source: Hotel News Now (08.09.2010)


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