US hospitality group Host Hotels & Resorts Inc plans to sell its three hotels in Rio de Janeiro and exit the Brazil market, three people familiar with the matter have said, as it unloads weaker assets and focuses on its core North American operations.
The company has 93 hotels worldwide and a total enterprise value of $17 billion, according to its website.
Host emerged from a spinoff of Marriott Corp years ago. In 1993, the Marriott Corp split into two publicly held companies, investing the lodging real estate in HostMarriott, later renamed to Host Hotels. Over the years it acquired hotels from other brands such as Hilton, Ibis and Novotel.
Host entered the Brazilian market in 2010 when it paid $47.5 million in cash for a 245-room JW Marriott Hotel on Copacabana Beach.
Host later invested an additional $67 million in the development of a 256-room Ibis and a 149-room Novotel, both inaugurated in 2014 and operated by France's Accor SA, near Olympic venues in the city's southern reaches.
Finding A Buyer
"It may be difficult to find a buyer willing to pay what they have invested," said one of the sources, who asked not to be named because the talks are private.
Host's annual reports highlighted opportunities in Brazil beginning in 2012, citing both the Olympics and soccer's World Cup in 2014, which the country hosted. However, the hopeful tone evaporated in the 2017 report, which flagged "economic and over-supply issues in Brazil."
The crisis facing some hoteliers is a buying opportunity for others.
"It would make sense for Accor to consider buying the hotels from Host depending on the price agreed, especially to convert the one in Copacabana [to one of Accor's brands]", said a source close to the French company.
Accor has recently invested in Latin America, agreeing last year to pay around $105 million for the management company behind Chile's Atton Hoteles and spending about $50 million in 2017 to run 26 of Brazil Investment Group's hotels.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
