Marriott to double hotels in Latin America

AFTER being battered by the pandemic like few regions in the world, Latin America finally has some tailwinds at its back.

Soaring commodity prices are bolstering exports for many countries while the push by multinationals to shorten and fortify their supply chains is prompting many of them to consider building new factories in the region. There are plenty of risks still: unemployment remains high, poverty has surged, populations are demanding political change across the region and the Federal Reserve is draining cash from the global economy.

At Bloomberg’s inaugural New Economy Gateway Latin America event in Panama City, just a short ride from the century-old canal that transformed global trade, speakers are debating the post-pandemic growth outlook as well as the preparation work needed to confront the next public health crisis, the transition to green energy and the case for cryptocurrencies in the region, among other topics.

The president for Marriott International, Craig Smith, said the company aims to double the number of its hotels in Latin America within 3 to 4 years. With 300 hotels already in the region, Smith said plans are underway for at least another 100.

“We’re really bullish on the region,” Smith said.

He added that demand for travel in Latin America has not been impacted by the surge in inflation rocking the global economy.

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It’s “affecting us more on building costs”, Smith said. “It hasn’t affected people travelling.”

Marcelo Claure, the influential venture capital investor best known for turning around Sprint and preparing WeWork for its public listing during his time as chief operating officer for SoftBank International Corp, said he is a “huge believer” in Latin America.

Claure said he looks beyond “temporary” company valuations as the current risk environment leads to a tighter funding environment for startups, and that startups will have to focus on faster, more profitable growth. He expects investor attention to remain in the region, even as funding slows in the next two years.

“The next 5 to 10 years will be some of the most exciting,” he said in an interview. “We won’t go back to the “dark ages” before 2018 where investment in LatAm was US$1 billion, compared to US$10 billion for India. We’ll be at least the same as India or as South-east Asia.”

Claure, who took the helm at his family office Grupo Claure since leaving SoftBank in late January, said he is closely following companies involved in the “3 revolutions” of our time: artificial intelligence, electric vehicles and blockchain.

The global shipping bottlenecks rattling industries and consumers in the pandemic era were plain to see for the politicians, economists and investors gathering for the event in Panama.

Separately, Notarc Management Group, a Latin America-focused investment firm, announced on the sidelines of the event that it is partnering with a unit of Mediterranean Shipping Company to take over construction of the US$1.4 billion Panama Canal Container Port.

Current down cycle and tighter liquidity in startup space in Latin America is temporary, Sumita Pandit, chief operating officer of dLocal said. 

“Cycles are good, it helps you go through these ups and downs to actually strengthen your business model,” Pandit said. “There will be some companies that will not survive the capital constraint that will probably come in the next few quarters but I’m absolutely certain that the cycle will turn and we will again see the abundant availability of capital.”

Latin America’s technology industry is still missing more female-led companies and founders, according to Mate Pencz, founder and co-CEO of Loft. 

UN High Commissioner for Human Rights Michelle Bachelet, speaking in an interview with Bloomberg’s Stephanie Flanders, threw her support behind Chile’s draft constitution, saying she would like to see it approved in September’s national referendum even as polls show growing rejection of the document among her fellow nationals.

“It’s offering a new social contract,” the former Chilean president said.

More broadly, she voiced concern about the short-term outlook for Latin America as policymakers battle the global wave of inflation sparked by the post-pandemic recovery and Russia’s invasion of Ukraine.

A panel discussed where Latin America’s geopolitical allegiances should lie and whether nearshoring is really happening amid supply chain disruptions.

“Latin America should be as promiscuous as it can be to play every side for whatever it can,” Marko Papic, partner at Clocktower Group said. “Multipolarity is a great opportunity.”

Inter-American Development Bank head Mauricio Claver-Carone said the US remains the most reliable partner as the biggest foreign direct investor and the realignment of supply chains at the moment represents the biggest opportunity of a lifetime.

“The US has very few free trade agreements but the ones we have are in Latin America,” Shannon O’Neil, vice-president of the Council on Foreign Relations, said. “So companies here have preferred access to the largest economy in the world.”

Michael Bloomberg, founder of Bloomberg LP, said in a video message to kick off the event that Latin America has a “critical role” in helping confront some of the world’s biggest problems.

Latin America is an economic engine, fertile ground for entrepreneurship, is a global tradeway and is a critical part of our natural defense against climate change given its biodiversity. BLOOMBERG