Mexico, Brazil, and the Dominican Republic are setting records in hotel construction, driving the tourism infrastructure boom in Latin America and the Caribbean. Together, these countries account for over 62% of all hotel projects in the region, reflecting a growing demand for accommodations spurred by government-backed infrastructure investments and an influx of international and domestic tourists.

The hotel development pipeline in Latin America has surged in recent months, with the total number of projects reaching 715, comprising over 112,500 rooms. This marks an 18% increase in the number of projects and an 11% rise in total rooms year-over-year. In Q1 2025, hotel developers across the region accelerated their efforts, with 287 projects under construction, accounting for 49,570 rooms—a 15% increase in the number of projects and a 5% rise in room volume compared to the previous year.

Mexico Leading the Charge

Mexico has emerged as the leader in Latin American hotel construction, with 254 active projects and over 39,000 rooms in the pipeline, setting a new record. This explosive growth is primarily driven by the rising popularity of its tourist destinations, both domestically and internationally. Cities like Mexico City and Riviera Maya are seeing significant development, contributing hundreds of rooms to the overall supply. Mexico City, in particular, is witnessing a boom in urban hospitality, with 26 projects and over 3,000 rooms under construction.

Brazil’s Growth Spurt

Brazil continues to expand its hospitality footprint as it remains a top destination for both domestic and international travelers. With 112 projects totaling over 15,000 rooms, Brazil is showing no signs of slowing down. Popular cities like Rio de Janeiro and São Paulo are key drivers of this growth, as developers focus on high-demand urban areas.

Dominican Republic’s Surge in Hotel Construction

The Dominican Republic has also seen an impressive rise in hotel development, with 78 projects and more than 18,000 rooms currently under construction. The country’s reputation as a prime beach tourism destination has fueled demand for additional accommodations, particularly in tourist-heavy areas like Punta Cana and Santo Domingo. The Dominican Republic has made substantial strides in increasing its room count, positioning itself as one of the top hotel construction hubs in the Caribbean.

Upscale and Luxury Segments See Strong Demand

Across the region, the upscale and luxury segments dominate hotel construction. The upscale market boasts 139 active projects and 20,122 rooms, while the luxury segment has reached an all-time high with 135 projects and 26,440 rooms under development. In addition, the midscale and upper-upscale segments remain strong, with substantial projects under construction to meet the growing demand for high-quality accommodations. This trend highlights the region's desire for premium hotel options as tourism continues to thrive.

Urban Growth Driving the Expansion

Several urban centers in Latin America are at the forefront of this hotel construction boom. Mexico City is the undisputed leader, but other cities such as Lima, Peru, and Santo Domingo are quickly gaining traction. In these urban markets, a diverse array of hotel types are under development, from luxury resorts to budget-friendly options, to meet the demand of travelers from all walks of life.

Brand Conversions and Renovations Fueling Growth

Brand conversions and renovations have also played a significant role in the expansion of the hotel sector. In Q1 2025, there were 137 projects underway in this category, adding over 26,000 rooms to the market. Additionally, 58 new project announcements added nearly 9,400 rooms to the pipeline, signaling a robust and continuing interest in the region's hotel market.

Outlook for 2025 and Beyond

With 8 new hotel openings in Q1 2025, the region’s growth shows no signs of slowing down. By the end of the year, 89 new hotels, totaling nearly 15,000 rooms, are expected to open, with projections for 2026 pointing to even more impressive figures. The hotel construction sector in Latin America is expected to remain robust, fueled by a combination of demand, investor confidence, and the region's growing status as a prime tourism destination.

Looking to the Future

This surge in hotel construction positions Latin America as one of the fastest-growing hospitality markets in the world. With increased air connectivity, supportive government policies, and a growing demand for both domestic and international tourism, the region is well on its way to becoming a global hospitality powerhouse. As the hotel construction pipeline continues to expand, Mexico, Brazil, and the Dominican Republic will remain central to Latin America's tourism boom through 2025 and beyond.

Originally reported by TTW.