Libertador Expands In Peru
Home-grown brand has US$260 million expansion plan with an eye toward further regional growth.
By Jeff Weinstein, Editor in Chief -- Hotels, 10/31/2009 11:00:00 PM
LIMA — As hotel developers find it increasingly difficult to mine opportunities, more eyes are turning to Latin America—South America, more specifically. For years known as a region ripe with potential never quite fully realized, markets in Brazil, Argentina and Chile are increasingly on developers’ radars. Another often overlooked country is Peru, with its historical treasures, yet slow-to-develop leisure market. However, one local player is seizing the moment with plans to open three Starwood-branded hotels over the next 12 months and a long-range plan to expand beyond its national borders.
Libertador Hotels, Resorts & Spas, Lima, is Peru’s largest hotel group led by CEO Jorge Melero, and is in the midst of a US$260 million expansion—the biggest investment in Peru and, perhaps all of South America.
Libertador will open the 120-room Hotel Paracas, a Luxury Collection Resort, and the 128-room Tambo del Inka Luxury Collection Resort & Spa this year, followed by a 301-room Lima Westin scheduled to open as the tallest building in Peru by the middle of 2010. Also on the books is a US$20 million renovation of Libertador’s historic Palacio del Inka Hotel Cusco, which also will be rebranded as a Luxury Collection hotel upon its completion in 2011. The group’s collection of five hotels, owned by The Brescia Group, one of Peru’s primary business conglomerates, are in Arequipa, Cusco, Puno, Lima and Trujillo.
“After we finish the Westin, we want to go overseas—probably in the Andean region around Colombia, as well as Chile and, perhaps, Argentina, where it is tougher to invest,” Melero says. “Our strategic plan for 2010 to 2015 goes beyond Peru’s border, and we want two more hotels with Westin or The Luxury Collection.”
Melero says Libertador has such an affinity for Starwood-branded hotels because The Luxury Collection has important penetration in South America, and Westin plays well with American travelers coming to the region. “The Luxury Collection allows us to keep the identity of places we have and Westin is one of the best brands for corporate people traveling in the region,” Melero says.
Peru’s Potential
Melero is bullish on the growing Peru hotel market. “Economic growth is increasing demand, especially in the corporate market,” he says. “Peru now has around 2 million tourists, which is not a lot compared to Argentina and Brazil. We must grow, and next year the country projects a 25% increase in the number of tourists coming to Peru.”
Not unlike the rest of the world, 2009 has not been the best year for Libertador, which expects RevPAR to drop 20%, according to Melero. However, with the increased inventory and bullish tourist projections, Melero projects 30% RevPAR growth for his company in 2010.
“All of South America at this moment has a lot of potential,” Melero adds. “Peru, Chile, Brazil and Colombia are well prepared to offer the world stability compared to 10 years ago with better security, accommodations and lift… The issue is more how to maintain the interest in the region because we must compete with India, Australia, the United States and the other growing regions in the world.”
For now, he is focused on completing his current projects. The two Luxury Collection properties are being designed by architect Bernardo Fort-Brescia, who is also responsible for the concept of The Four Seasons Dubai, The Viceroy Santa Monica and Canyon Ranch Miami Beach, among others. The Westin in Lima is being designed by Tony Chi.
Direct comments to:jweinstein@reedbusiness.com
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