hotel broker in Brazil

The Future is Fractional For Brazil's Hotel Sector in 2018 and Beyond

20161021164809729602000000-o.jpg

The concept of fractional ownership started off in the US to to commercialize luxury vacation homes whereby a group of clients could divide maintenance costs,taxes,security etc and use the same property for a given time period per year. Overtime this business model was extended to selling condominium apartments,theme park properties and units in beachfront resorts with hotel facilities.

The model is simple and readily applicable to any tourist related real estate development.

For the developer it is much easier to sell fractionally to raise the necessary capital to execute a project ( if off-plan ) or generate funds from fractional sales as an alternative strategy to sell a hotel asset ( if already built ) For the buyer, you acquire equity ownership in a piece of property that you legally own and receive all the benefits of the investment (including potential for appreciation of your asset ) at a fraction of the price.

This real estate segment is primarily touristic driven with demand for resort hotels and vacation homes in the sun. Brazil has an abundance of beautiful locations for such developments and fractional ownership has seen accelerated growth over the past 5 years despite traditional real estate markets suffering heavily throughout Brazil’s recession.

Some Information on Fractional Ownership Projects in Brazil

- 80 projects in 2018 , 54 in 2017 (48% increase) against only 2 in 2013

- 14 states and 39 cities throughout Brazil.

- New developments in 21 cities this year

- 336,000 fractional sales this year with a gross sales volume of R$16.3 Billion 

- 70% of the sales were in the R$20-50,000 price bracket with apartment units comprising  of  86% of the market share.

- A standard apartment will have 2 bedrooms with 50-65m2 and offer distinctive leisure facilities for vacationing.(theme park,golf course,water sports etc)

- Higher end house sales with prices above 90,000 per fraction accounted for 67% of the market share.

- Caldas Novas (the famous spa resort in Goias ) is the leading destination with 20 projects selling fractionally.

- Gramado (in Rio Grande do Sul ) is another trendsetter with 1500 apartments set to be launched in the coming years.

The fractional ownership model for vacation homes in Brazil is on the rise. The  benefits are undoubted for both developers/hotel owners and second home buyers. 

It is a force to be reckoned with and foreign hotel investors should take note of the huge potential opportunities to acquire prime land/hotel assets and launch into the fractional orbit.

Mike is a Hotel Broker in North-East Brazil with a large portfolio of resort hotels for sale in Brazil. https://www.brazilbeachhouse.com/hotels-1

Please contact him if you have any queries about hotel investment and / or fractional ownership sales in Brazil.

Resources for this article ;

http://adit.com.br/wp-content/uploads/2018/07/Cenario_do_Desenvolvimento_de_Multipropriedades_no_Brasil_2018.pdf

http://www.revistahoteis.com.br/multipropriedade-modelo-de-investimento-que-alavanca-a-hotelaria-nacional/

http://newtimeadmkt.com.br/

Brazilian Hotel Performance. North-East Brazil Way On Top in 2018

map hotel cities of brazil for book.jpg

The Brazilian Hotel Sector showed definite signs of recovery in the first 2 months of 2018 and it is the North-East of Brazil ( most notably Fortaleza, Salvador and Recife ) where improvement is most pronounced judging by the 3 main hotel performance metrics ( according to the FOHB study on Hotel Performance in Brazil )

Occupancy Rate for Brazilian Hotels in January & February 2018

The North-East collectively posted a 70% Occupancy rate,up from 64%in 2017 way out performing the other regions of the country where the average as a whole was 54%. The top 3 cities in brazil all resided in the sun drenched North-East with Fortaleza coming top at 80%,and  Recife and Salvador each posting 72%. Rio De Janeiro in contrast posted an O.C rate of 59% in the first 2 months of this year.

Average Daily Rate for Brazilian Hotels in January & February 2018

Of the 14 state capitals featured in the study only 3 cities posted increases in ADR from 2017 to 2018, 2 of which were Recife and Fortaleza.The average rate in Recife was R$212 (up 6.5%) and Fortaleza R$223 (up 0.2%) Campinas and Manaus posted the biggest falls in ADR (17% + 8.8% respectively)

Rev Par for Brazilian Hotels in January & February 2018

The 3 big cities of North-East Brazil again came up trumps in revenue per room figures with Salvador posting an increase of 17.9%,Fortaleza 12.4% and Recife 12.9%. Fortaleza far outstripped any other city in the country with a RevPar of R$180 per room in the first 2 months of this year.

Downtown Fortaleza

Downtown Fortaleza

The North-East of Brazil is likely to continue its upward trajectory in the hotel sector as the Brazilian economy improves. It remains the favourite destination for sun and beach vacations for its huge domestic population (200 million Brazilians) with all year round sunshine,warm weather and sensational beaches.There is also a significant and growing number of south american visitors from especially Argentina and Chile and more direct,charter flights from Europe and North America.

For more information on Hotel Investment Opportunities in Fortaleza/ 

 https://www.brazilbeachhouse.com/blog/2017/7/26/brazil-hotel-investment-in-fortaleza-ceara-in-201718-video-presentation

To see the latest hotels for sale in Brazil in April 2018/ 

https://www.brazilbeachhouse.com/hotels-1

5 small beachfront hotels for sale in North-East Brazil/ 

https://www.brazilbeachhouse.com/blog/2017/9/15/5-profitable-beachfront-hotels-for-sale-in-north-east-brazil-in-september-2017

Mike is a Hotel Broker in Brazil and offers Hotel Investment Opportunities through the country including in the key cities featured in this article,Fortaleza,Recife and Salvador.