Hotels in Brazil expected to invest US$1.87B in new projects in 2025

BRAZIL – Brazil’s hotel industry is gearing up for a major expansion in 2025, with investments in new greenfield projects projected to reach R$10.6 billion (US$1.87bn).

According to the 19th edition of the Panorama of Brazilian Hospitality—a report by the Brazilian Forum of Hotel Operators (FOHB) in partnership with consultancy HotelInvest—these funds will support the launch of 152 new hotels, adding approximately 23,000 lodging units nationwide.

This new wave of development is being driven by a robust rebound in both domestic and international tourism, as well as growth in Brazil’s events sector.

Most of the new properties are expected to fall within the mid-scale, upscale, and luxury categories—segments known for their higher profitability margins.

The Panorama study sampled 187 hotels operated by FOHB-affiliated brands, with 29 hotel chains contributing data on their development pipelines.

Notably, 61% of respondents said they expect to sign more contracts in 2025 than they did in 2024, signalling growing optimism across the sector.

The 2025 outlook is significantly more bullish than projections made at the start of 2024, when just 141 projects and R$8.4 billion (US$1.48bn) in investment were anticipated.

In reality, 137 new hotels opened last year, adding 22,000 rooms to Brazil’s lodging inventory. Currently, an estimated 10,600 hotels operate nationwide, according to JLL’s Hospitality in Numbers report based on FOHB data.

However, the growth potential may be even greater. “I think 152 hotels is a modest figure,” said Cristiano Vasques, managing partner at HotelInvest.

But he also cautioned that persistent bottlenecks continue to limit hotel construction, including high interest rates, expensive development costs, and limited access to financing.

“The high cost of capital remains a major deterrent,” Vasques noted.

The FOHB report highlights these constraints. High interest rates and construction costs were cited by 27% and 24% of respondents, respectively, as the top obstacles to development.

Access to credit is another concern: 39% of projects rely on a mix of equity and financing, while only 26% are funded solely by the developer’s own capital.

Despite these challenges, the fundamentals remain strong. In 2024, the industry recorded an 8% year-over-year increase in RevPAR (Revenue per Available Room), while the national average occupancy rate rose to 62%, up from 61% in 2023. Average daily rates also climbed 6% year-on-year.

“Hotels are seeing that, at peak times, demand is outpacing supply, giving them confidence to raise prices above inflation,” Vasques explained.

FOHB president Orlando de Souza echoed this sentiment, but emphasized the need for improved financing mechanisms.

“Operating margins in the hotel sector are typically narrow,” he said, “so financial viability is key to unlocking further growth.”

He added, “Brazil’s hotel supply remains small compared to more mature markets like the U.S. and Europe. With the right support, there’s ample room to grow.”

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