Choice Hotels' Strategic Expansion into Latin America: A High-Conviction Play in Upscale Hospitality

In the ever-evolving global hospitality landscape, Choice Hotels International has positioned itself as a formidable player by targeting high-growth markets with strategic precision. Its recent foray into Latin America, particularly in the upscale and extended-stay segments, represents a calculated bet on a region experiencing robust tourism recovery, economic diversification, and shifting consumer preferences. For long-term investors, this expansion offers a compelling case study in leveraging macroeconomic tailwinds while navigating regional complexities.

Market Dynamics: A Region on the Rise

Latin America’s hospitality sector is undergoing a transformation driven by three key factors: tourism rebound, remote work trends, and middle-class expansion. According to a report by CBRE, the region’s hotel room rates surged 12.9% year-over-year in 2024, outpacing global averages [3]. This growth is fueled by countries like Mexico and Colombia, which saw international tourist arrivals rise by 7.2% and 6 million visitors in 2024, respectively [5]. Meanwhile, the rise of remote work and extended stays has amplified demand for flexible, long-term accommodations—a niche where Choice’s portfolio of 22 brands, including Radisson and Ascend Collection, excels [3].

The global extended-stay hotel market, projected to grow at a 7.4% CAGR to $41.9 billion by 2033, further validates Choice’s focus on this segment [4]. In Latin America, where business travel and medical tourism are expanding, the company’s ability to offer affordable yet premium stays aligns with a growing consumer class prioritizing value and comfort [4].

Strategic Execution: Building a Diversified Footprint

Choice’s expansion strategy in Latin America is anchored in brand diversification, strategic partnerships, and localized offerings. As of 2025, the company operates 180 hotels in the region, representing over 25,000 rooms, with a pipeline of 38 new properties slated for 2023–2025 [3]. Notable openings include the Radisson Blu in Argentina’s Bariloche and the V Grand Hotel in Medellin, Colombia, which emphasize wellness and cultural immersion—key differentiators in a competitive market [3].

The acquisition of Radisson Hotels Americas in 2022 has been a catalyst, enabling Choice to leverage high brand recognition while expanding its upscale portfolio. This move has already yielded results: the company’s extended-stay segment grew by over 20% in five years, and its international development pipeline added 11,000 rooms since 2025 [3]. By renewing its master franchise agreement with Atlantica Hospitality International in Brazil for 20 additional years, Choice has secured a long-term foothold in a market with nearly 70 hotels and 10,000 rooms [3].

Risks and Mitigants: Navigating a Complex Landscape

While the opportunities are substantial, Choice’s Latin American venture is not without challenges. Economic volatility, particularly in Argentina and Brazil, poses risks from inflation and currency fluctuations. A PwC analysis notes that U.S. lodging RevPAR growth is expected to decelerate to 0.8% in 2025, a trend that could ripple into international markets [1]. Additionally, competition from short-term rentals in urban hubs like Bogotá and Santiago has eroded occupancy rates, with Colombia’s tourist rental supply growing 80% in two years compared to 8% for hotels [5].

Labor costs also remain a pressure point. In the Americas, labor expenses per available room rose 12.3% in 2023, outpacing TRevPAR growth and squeezing margins [2]. However, Choice’s emphasis on operational efficiency—including DEI initiatives and wage adjustments to retain talent—mitigates these risks. Furthermore, the company’s focus on off-peak travel and value-conscious bookings taps into shifting consumer behavior, reducing reliance on volatile leisure markets [3].

Conclusion: A High-Conviction Play

Choice Hotels’ Latin American expansion is a masterclass in aligning strategic assets with market trends. By capitalizing on the region’s tourism rebound, extended-stay demand, and brand equity, the company is well-positioned to capture market share in a sector projected to grow significantly. While macroeconomic headwinds and competition exist, Choice’s diversified portfolio, localized strategies, and operational agility provide a buffer against volatility. For investors, this represents a high-conviction opportunity to participate in a global hospitality leader’s bold regional push.

Source:
[1] US Hospitality Directions: May 2025 [https://www.pwc.com/us/en/industries/consumer-markets/hospitality-leisure/us-hospitality-directions.html]
[2] Global report shows revenue hot spots in 2023 [https://www.hotelinvestmenttoday.com/Forecasts/Global-report-shows-revenue-hot-spots-in-2023]
[3] Choice Hotels Internationals global portfolio reaches new heights driven by upscale and upper-upscale growth internationally [https://www.prnewswire.com/news-releases/choice-hotels-internationals-global-portfolio-reaches-new-heights-driven-by-upscale-and-upper-upscale-growth-internationally-302472023.html]
[4] Extended Stay Hotel Market Size & Growth Report, 2033 [https://www.marketdataforecast.com/market-reports/extended-stay-hotel-market]
[5] 2025 Global Hotel Outlook [https://www.cbre.com/insights/reports/2025-global-hotel-outlook]