BY MARK CHESNUT

BOGOTA
-- As Colombia continues to build on its growing reputation for economic stability and improved safety, the nation’s capital has become a hot spot for hotel investment.

The recent debut of several international brands in Bogota — including JW Marriott, Ibis and Sonesta — is the most telling indicator of how companies are banking on Bogota’s potential to fill guest rooms.

And the growth spurt is far from over. This year, some 578 internationally branded rooms will come online. In July, Hilton will return after a 20-year absence with the 245-room Hilton Bogota, the same month that Holiday Inn will unveil its 191-room property near the El Dorado airport, followed by Starwood’s 142-room Aloft Bogota Airport.

“Bogota is a good market,” says Frank Orenstein, chairman of U.S.-based Hospitality Investors Group, which in February announced a joint venture with Ospinas & Co., a Colombian real estate firm, to finance, develop and operate new hotels in multiple destinations across Colombia. According to Orenstein, Bogota is “not quite internationalized yet, but it’s getting there."

“I would say that the lack of a lot of major international brands is an opportunity,” he adds. “There has been a lot of local development, where local operators are managing under local domestic names. But if you have to look at where you could excel, it’s in creating something more international, and using the same staff, but marketing and promoting it abroad — that is really the key.”

That’s not to say that Colombian brands aren’t growing as well. Last year, real estate developer AR entered the hotel segment with the AR Hotel Salitre, in Bogota’s Ciudad Salitre suburb. The company plans to expand the brand to include up to five hotels within five years.

Another new entrant into the hotel scene is Metro Hotels, a Bogota-based company founded in 2009 that is equally owned by a group of young entrepreneurs and the Robleo Soto family, which has a long history in the hospitality industry. The new company is putting its money behind internationally branded properties, starting with its $22-million Holiday Inn Bogota, due to open this year. “We need to be cautious in choosing brands, projects and sites, because there may come a time in two years that there is a lot of supply,” says Felipe Galeano, the company’s manager. “I think the moment will arrive in perhaps the next two or three years that the supply will become greater than the demand. We need to be prepared and not develop hotels like crazy.”

Still, most industry insiders interviewed for this article — who, granted, have their money and reputation riding on the success of their hotel projects — remain optimistic about future growth potential. The expansion of El Dorado international airport, Latin America’s largest cargo airport and third-largest passenger airport, is expected to bring more traffic through Bogota. The pending (albeit delayed) U.S. free trade agreement shouldn’t hurt, either, according to Orenstein, who mentions other factors that contribute to the allure of hotel investment in Bogota — including reasonable construction costs, relatively high room rates and flexible zoning conditions that are “pretty responsive, if you have a company like Ospinas that knows how to talk to the zoning authorities.”

Bogota may also be benefiting from less-than-favorable investment conditions in nearby destinations, according to Luis Perillo, who in April will leave his post as regional director of sales and marketing for the Caribbean and Latin America at Hilton Worldwide to become general manager of the Hilton Bogota, owned by Bogota-based Sociedad Operadora 72 Gran Hotel, S.A., and located in the upscale Rosales district. “A lot of countries that have headquarters in the Andean region have moved to Bogota,” he said. “I know some companies that had headquarters in Caracas have moved to Bogota. Bogota has benefited from degrees of interest that Venezuela and Caracas have had, as well as from the safety improvements that have happened [in Colombia].” Indeed, the flagship Hilton brand was among the companies to leave neighboring Venezuela, after the government’s forcible acquisition of its properties in Caracas and Margarita Island.

Perillo said that the confidence level in Bogota, meanwhile, is palpable. “Every time I go there, I feel more optimistic about the future,” he says. “You can sense it when you talk with the local people, and people that are visiting from abroad. It is a melting pot that is still getting to its optimum position.”